Betterbox Communications v. Bb Technologies, 01-2456.

CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)
Citation300 F.3d 325
Docket NumberNo. 01-2456.,01-2456.
PartiesBETTERBOX COMMUNICATIONS LTD v. BB TECHNOLOGIES, INC.; Black Box Corporation, Appellants.
Decision Date13 August 2002
300 F.3d 325
BB TECHNOLOGIES, INC.; Black Box Corporation, Appellants.
No. 01-2456.
United States Court of Appeals, Third Circuit.
Argued: May 7, 2002.
Filed: August 13, 2002.

Page 326


Page 327

Antoinette R. Stone (argued), Ellen E. Farina, Buchanan Ingersoll, P.C., Philadelphia, PA, Michael L. Dever, Bryan H. Opalko, Buchanan Ingersoll, P.C., Pittsburgh, PA, for appellants.

Mark Schonfeld (argued), Hillel I. Parness, Brown Raysman Millstein Felder & Steiner, LLP, New York, NY, for appellee.



ALITO, Circuit Judge.

This is an appeal in a declaratory judgment action commenced by Betterbox Communications, Ltd. ("Betterbox"), against Black Box Corporation ("Black Box") and a wholly owned subsidiary. Betterbox and Black Box sell competing computer-related products through catalog marketing. In 1995, Betterbox, a British company, applied to the United States Patent and Trademark Office ("PTO") for trademark registration based on its intended use of the Betterbox name and box design in the United States. Black Box objected that Betterbox's name and box design infringed on its trademarks. Betterbox then brought this action in federal court seeking a declaration of no infringement, and Black Box counterclaimed for trademark infringement, unfair competition, and trademark dilution. After a trial, the jury returned a verdict for Betterbox, and the District Court entered judgment accordingly on November 16, 2000. In post-trial orders, the District Court denied Black Box's motions for a new trial under Fed.R.Civ.P. 59(a) and for relief from judgment under Fed.R.Civ.P. 60(b). This appeal followed.

On appeal, Black Box argues that the District Court erred in admitting the testimony of Betterbox's expert witness, in admitting evidence of Betterbox's trademark registrations in foreign countries, and in refusing to grant relief from the judgment based on newly discovered evidence. We review these rulings for an abuse of discretion. See In re Cendant Corp. PRIDES Litig., 234 F.3d 166, 170 (3d Cir.2000); Abrams v. Lightolier Inc., 50 F.3d 1204, 1213 (3d Cir.1995). We affirm.


Betterbox and Black Box each sought to introduce the testimony of an expert witness on the following question: whether there was a likelihood that consumers would be confused by the Betterbox and Black Box marks. Each side also filed a pre-trial motion in limine to exclude the other's expert, but the District Court permitted both experts to testify.


Black Box argues that the District Court erred because Betterbox's expert, John Schulte, lacked the qualifications needed by an expert. The admissibility of expert testimony is governed by Federal Rule of Evidence 702, which requires an expert witness to have "specialized knowledge" regarding the area of testimony. "The basis of this specialized knowledge `can be practical experience as well as academic training and credentials,'" and

Page 328

"[w]e have interpreted the specialized knowledge requirement liberally." Waldorf v. Shuta, 142 F.3d 601, 625 (3d Cir. 1998) (citation omitted). However, "`at a minimum, a proffered expert witness ... must possess skill or knowledge greater than the average layman....'" Id. (citation omitted). See also, e.g., Elcock v. Kmart Corp., 233 F.3d 734, 741 (3d Cir. 2000).

In the present case, the District Court did not abuse its discretion in ruling that Schulte's practical experience sufficed under this liberal test. Schulte had worked actively for 20 years in the field of direct marketing and mail-order catalogs. He had extensive experience in "marketing and the use of logos and how they are used in the marketplace as far as advertising." Appendix at 317. As the chairman of the National Mail Order Association, he had consulted with the Association's members on how to market through catalogs, had edited the Association's publication Mail Order Digest, and had reviewed and analyzed about 10,000 catalogs in the previous five years. He had published a variety of articles on direct marketing, had taken courses in graphic design, and had designed corporate logos. Schulte even had about four years' experience as the owner of a business involved in the direct marketing of computer products.

Black Box argues that Schulte's experience with respect to the marketing of computers was insufficient because he had worked in that specific field for only four years and because that experience had preceded the time of the trial by eight years. See Appellant's Br. at 17. This argument is not persuasive. Four years of experience at the helm of a company is substantial, and Black Box has not explained why the passage of eight years between that period and the commencement of the trial diminished Schulte's qualifications. If Schulte had been called to testify as an expert regarding a field of knowledge that had changed greatly during the past few years, Black Box's argument might have force, but Black Box has not called to our attention any such changes regarding the question whether the competing marks in this case created a likelihood of confusion.

Black Box also faults Schulte's experience because it did not concern "the catalog marketing of electronic data communications and computer connectivity products." Id. at 18. As noted, however, Schulte had extensive experience in catalog marketing, as well as four years of experience marketing computer products. Black Box has not pointed out anything that is fundamentally different about the catalog marketing of "data communications and computer connectivity products" as opposed to other computer products. Id. Thus, Schulte's lack of experience in marketing the precise type of computer components sold by these companies does not establish that the District Court abused its discretion in ruling that his qualifications met the standard of Rule 702.

Black Box argues, finally, that Schulte did not have experience in evaluating the so-called Lapp factors that we have found to be useful in determining whether there is a likelihood of confusion between marks. See Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir.1983); A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 210-15 (3d Cir.2000). These factors, however, are not mandatory; they "are meant to be tools, not hurdles." A & H Sportswear, 237 F.3d at 214. Schulte's experience plainly related to a number of the Lapp factors, namely, factors (1), (3), (7), (8), and (9). For all these reasons, we see no basis for disturbing the District

Page 329

Court's determination regarding Schulte's qualifications.


Black Box also argues that Schulte should not have been allowed to testify as an expert because his methodology was deficient. In Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 592-93, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993), the Supreme Court held that under Rule 702 the trial judge must make "a preliminary assessment of whether the reasoning or methodology underlying the [expert's] testimony is scientifically valid." The Court noted factors relating to the reliability of an expert's scientific methodology, including whether the theory or technique "can be (and has been) tested," whether it "has been subjected to peer review and publication," whether the known or potential error rate is acceptable, and whether it is generally accepted within a relevant scientific community. Id. at 593-94. But the Court stressed that "[t]he inquiry envisioned by Rule 702 is ... a flexible one." Id. at 594.

In Kumho Tire Co. v. Carmichael, 526 U.S. 137, 149-50, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999), the Court held that the basic gatekeeping function described in Daubert applies to all expert testimony, not just "scientific" testimony. But the Court added that in cases not involving scientific testimony, "`[t]he factors identified in Daubert may or may not be pertinent in assessing reliability, depending on the nature of the issue, the expert's particular expertise, and the subject of his testimony.'" Id. at 150 (citation omitted). In such cases, the Court said, "the relevant reliability concerns may focus upon personal knowledge or experience." Id. In addition, the Court made it clear that a court of appeals is to apply an abuse-of-discretion standard, not only to a trial court's ultimate decision to admit or exclude expert testimony, but to "the trial court's decision about how to determine reliability." Id. at 152.

In the present case, Schulte's testimony was based on his "personal knowledge or experience," Kumho Tire, 526 U.S. at 150, 119 S.Ct. 1167, rather than a methodology that satisfies the Daubert factors. Schulte testified that he examined the companies's catalogs, that he informally surveyed colleagues, and that he evaluated the catalogs' target market. In his report, he stated that he focused on the following factors: "[t]he perception of the names," "[t]he sophistication of the target audience/market," "[t]he graphic logo design," and "[t]he presence in the market place and the look and feel of the catalogs." Appendix at 86. Although he did not consider all of the factors that we noted in A & H Sportswear, his analysis tracked many of them.

In order to hold that the District Court erred in admitting Schulte's testimony, we would have to conclude that the District Court abused the considerable discretion that it enjoyed to determine the criteria for judging reliability under the particular circumstances present here. We find it unnecessary, however, to decide this question because we are convinced that even if the District Court erred, the error was harmless.

In a civil case, an error is harmless if it is highly probable that it did not affect the complaining party's substantial rights. See McQueeney v. Wilmington Trust Co., 779 F.2d 916, 924, 926 (3d Cir.1985). Under this standard, the admission of Schulte's...

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