Innovation Ventures, LLC v. NVE, Inc.

• Decision Date: 27 February 2015
• Docket Number: Case No. 08–11867.
• Citation: 90 F.Supp.3d 703
• Parties: INNOVATION VENTURES, LLC d/b/a Living Essentials, Plaintiff/Counter–Defendant, v. NVE, INC., Defendant/Counter–Plaintiff.
• Court: U.S. District Court — Eastern District of Michigan

90 F.Supp.3d 703

INNOVATION VENTURES, LLC d/b/a Living Essentials, Plaintiff/Counter–Defendant

v.NVE, INC., Defendant/Counter–Plaintiff.

Case No. 08–11867.

United States District Court, E.D. Michigan, Southern Division.

Signed Feb. 27, 2015.

Brian C. Doughty, Chanille Carswell, Marc Lorelli, Mark A. Cantor, Phyllis G. Morey, Thomas W. Cunningham, Brooks Kushman, Southfield, MI, for Plaintiff/Counter–Defendant.

Anthony J. Davis, Nicoll, Davis, & Spinella, Paramus, NJ, Douglas P. Lalone, Rader, Fishman, Emily J. Tait, Leigh C. Taggart, Honigman Miller Schwartz and

Cohn LLP, Bloomfield Hills, MI, for Defendant/Counter–Plaintiff.

ORDER RESOLVING MOTIONS IN LIMINE

TERRENCE G. BERG, District Judge.

This is a trademark infringement case, brought by Plaintiff Innovations Ventures, LLC d/b/a Living Essentials (“Plaintiff”) against Defendant NVE, Inc. (“Defendant”). Plaintiff makes and distributes a 2–ounce energy shot called “5–Hour ENERGY,” and asserts that Defendant's competing energy shot—called “Stacker 2® 6–Hour POWER”—infringes its common law trademark rights. In a counterclaim, Defendant asserts that Plaintiff violated the Lanham Act by issuing false advertising against Plaintiff. Defendant's counterclaim is that, after Plaintiff obtained a preliminary injunction in a previous case¹ against the manufacturer of a different “6–Hour” energy shot, Plaintiff issued a “Legal Notice” to retailers that appeared to claim that Defendant's “6 Hour POWER” energy shot had been recalled when, in fact, it had not been. This case is set for a jury trial on March 16, 2015. There are numerous motions in limine pending. The Court heard oral argument on several of these motions on December 10, 2014. The Court's rulings are set forth below.

A. Objections to Magistrate Judge Whalen's Order Concerning Plaintiff's “Supplemental” Expert Reports (Dkts. 304, 324)

Both parties object to an order entered by Magistrate Judge Whalen on October 5, 2014 (Dkt. 302). In the order, Magistrate Judge Whalen denied Defendant's motion to strike (Dkt. 284) a second expert report submitted by Plaintiff's expert witness Dr. Dan Sarel (the “New Sarel Report”), but granted Defendant's motion to strike a report submitted by Plaintiff's expert witness Dr. E. Deborah Jay. Defendant objects (Dkt. 304) to allowing the New Sarel Report; Plaintiff objects (Dkt. 324) to the striking of Dr. Jay's report. To bring this dispute into focus, the Court provides the following procedural history.

Plaintiff filed this case seven years ago, on May 1, 2008 (Dkt. 1). Pursuant to a stipulated scheduling order (Dkt. 57), burden of proof expert reports were due on or before August 1, 2009. Plaintiff timely served five expert reports, including one prepared by Dr. Sarel (the “Original Sarel Report”) and another prepared by Dr. Howard Marylander. Plaintiff did not, at that time, produce a report by Dr. Jay. On September 15, 2010, Judge Lawrence P. Zatkoff² granted cross motions for summary judgment, and dismissed this case in its entirety.

On September 13, 2012, the Sixth Circuit reversed, in part, and remanded the case for further proceedings only on Plaintiff's trademark infringement claim and on Defendant's false advertising counterclaim. See Innovation Ventures, LLC v. N.V.E., Inc., 694 F.3d 723 (6th Cir.2012). After remand, on January 9, 2014, Judge Zatkoff entered another stipulated scheduling order (Dkt. 281), setting a “supplemental expert report” deadline of April 30, 2014, a deadline for “rebuttal expert reports” of May 28, 2013, and a date to complete expert depositions by June 30, 2014. Prior to the deadline for submission of “supplemental expert reports,” Plaintiff served a follow-up report from Dr. Sarel (again, his second, the first being timely submitted during the initial discovery period) and a report from Dr. Jay (her first in this case). Defendant contends that these two reports do not qualify as “supplemental reports” under Fed.R.Civ.P. 26(e), and therefore should be stricken as untimely. Plaintiff argues that these two reports are in fact “supplemental reports” that were timely filed under the terms of the January 9, 2014 scheduling order.

The standard of review set forth in Rule 72(a) governs this non-dispositive matter. See Fed.R.Civ.P. 72(a). Pursuant to that rule, “[t]he district judge in the case must consider timely objections and modify or set aside any part of the [Magistrate Judge's] order that is clearly erroneous or is contrary to law.” Id. Similarly, under 28 U.S.C. § 636(b)(1)(A), a Magistrate Judge's orders shall not be disturbed unless “found to be clearly erroneous or contrary to law.” See United States v. Curtis, 237 F.3d 598, 603 (6th Cir.2001). The “clearly erroneous” standard requires the Court to affirm the Magistrate Judge's decision unless, after reviewing the entirety of the evidence, it “is left with the definite and firm conviction that a mistake has been committed.” See Sandles v. U.S. Marshal's Serv., 2007 WL 4374077 *1 (E.D.Mich.2007) (citing United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948) ).

Having carefully reviewed the parties' briefs in support of their objections and the relevant authorities, the Court finds that Magistrate Judge Whalen's order is not “clearly erroneous or contrary to law,” therefore, both parties' objections are OVERRULED. As to the New Sarel Report, Magistrate Judge Whalen correctly found that this report was “substantially responsive” to the criticisms leveled against the Original Sarel Report by Defendant's expert witness, Dr. Jacoby. As such, the New Sarel Report “serves as a response to an opposing expert's pointing out gaps in [Sarel's] chain of reasoning.” Eiben v. Gorilla Ladder Co., 2013 WL 1721677 *6 (E.D.Mich. Apr. 22, 2013) ; citing Miller v. Pfizer, Inc., 356 F.3d 1326, 1332 (10th Cir.2004). If Defendant wished to have Dr. Jacoby respond to the New Sarel Report, it could have done so during the time set aside for “rebuttal expert reports” in the stipulated scheduling order (Dkt. 281).

Regarding the Jay report, Magistrate Judge Whalen correctly ruled that this report did not qualify as a “supplemental” expert report. Unlike Dr. Sarel, Dr. Jay did not previously file an expert report. Plaintiff argued that Jay's report is supplemental to that of one of its other experts, Howard Marylander, whom Defendant's expert—Dr. Jacoby—roundly criticized. Magistrate Judge Whalen found it significant that with Dr. Jay, Plaintiff seeks to supplement the report of his previously disclosed expert, Mr. Marylander, with that of an entirely different expert. Citing Gilbane Bldg. Co. v. Downers Grove Community High School District No. 99, 2005 WL 838679 (N.D.Ill.2005), Magistrate Judge Whalen correctly struck the Jay report, since it was “grossly untimely,” not substantially justified and prejudicial to Defendant. See Noffsinger v. The Valspar Corp., 2011 WL 9795, *3 (N.D.Ill.2011) (citing Gilbane, and stating, “A new expert, especially one who conducts new tests and writes a new report, is not ‘supplementation” ’); In re Enron Corporation Securities, Derivative & “Erisa” Litigation, 2007 WL 5023541, 8–11 (S.D.Tex.2007) (finding subsequent report prepared by a different expert was not a proper supplemental report). These conclusions are fully supported by the applicable law concerning supplemental expert reports, and the parties' objections simply do not demonstrate that Magistrate Judge Whalen's order is clearly erroneous and contrary to law. Thus, Plaintiff will be permitted to use the New Sarel Report at trial, but the Jay report is excluded.

B. Plaintiff's Motion in Limine to Exclude Evidence of USPTO Proceedings (Dkt. 307)

Plaintiff moves to exclude evidence of its prior proceedings in the United States Patent and Trademark Office (USPTO), in which Plaintiff's asserted trademark was refused registration. Plaintiff's proceedings before the USPTO began when Plaintiff filed a federal “intent-to-use” trademark application for the trademark “5–Hour ENERGY” on June 14, 2004 (U.S. Reg. No. 3003077). On January 20, 2005, the USPTO refused registration of the “5–Hour ENERGY” trademark on the Principal Register on the grounds that the mark was merely descriptive.

On July 19, 2005, Plaintiff amended its trademark application and requested registration on the Supplemental Register. On September 27, 2005, the “5–Hour ENERGY” trademark was registered on the Supplemental Register. On July 15, 2008, Plaintiff filed another trademark application for “5–Hour ENERGY” with the USPTO (U.S. Reg. No. 4004225). The USPTO also refused registration of the second trademark application on the grounds that the mark was merely descriptive, in an office action dated October 29, 2008.

In briefing and argument on appeal to the Sixth Circuit, the parties again raised the issue of whether the “5–Hour ENERGY” mark was a protectable trademark. The Sixth Circuit sided with Plaintiff, holding:

The line between merely descriptive and suggestive marks is admittedly hazy and can be difficult to discern. However, we disagree with [Defendant's] contention that the mark is not distinctive and thus not protectable. The “5–Hour ENERGY” mark is “suggestive.” We decline [Defendant's] request to affirm on an alternate ground. Because the “5–Hour ENERGY” mark is suggestive and thus protectable, we next consider whether a triable issue of likelihood of confusion exists.

Innovation Ventures, LLC v. N.V.E., Inc., 694 F.3d 723, 730 (6th Cir.2012) (emphasis added, internal citations omitted). In its motion seeking to exclude the introduction of evidence concerning the prior USPTO proceedings, Plaintiff argues that such “evidence is contrary to the law of the case as clearly stated in the mandate from the Sixth Circuit and would only confuse the jury about an issue that has already been decided” (Dkt. 307 at 2–3). Defendant responds that evidence concerning the USPTO proceedings is probative of the relative strength or weakness of Pl...