Koninkijke Philips Elecs. N.V. v. Hunt Control Sys., Inc.

• Decision Date: 29 June 2016
• Docket Number: Civil Action No. 11-3684 (SRC)(CLW)
• Parties: KONINKIJKE PHILIPS ELECTRONICS N.V., Plaintiff/Counterclaim Defendant, v. HUNT CONTROL SYSTEMS, INC., AN ASSUMED TRADE NAME FOR CARIBE CORPORATION, Defendant/Counterclaim Plaintiff.
• Court: U.S. District Court — District of New Jersey

KONINKIJKE PHILIPS ELECTRONICS N.V., Plaintiff/Counterclaim Defendant, v. HUNT CONTROL SYSTEMS, INC.,AN ASSUMED TRADE NAME FOR CARIBE CORPORATION, Defendant/Counterclaim Plaintiff.

Civil Action No. 11-3684 (SRC)(CLW)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

June 29, 2016

NOT FOR PUBLICATION

OPINION

CHESLER,

District Judge

This matter comes before the Court upon four motions: (1) the motion for summary judgment filed by Plaintiff/Counterclaim Defendant Koninkijke Philips Electronics N.V. ("Philips") [Docket Entry 189]; (2) the motion for summary judgment filed by Defendant/Counterclaim Plaintiff Hunt Control Systems, Inc. ("Hunt") [Docket Entry 179]; (3) Hunt's motion to exclude the expert report and testimony of Michael Barone ("Barone") [Docket Entry 183]; and (4) Hunt's motion to exclude the expert report and testimony of Alex Simonson ("Simonson") [Docket Entry 186]. All motions have been opposed. The Court has considered the papers filed by the parties and proceeds to rule on the motions without oral argument, pursuant to Federal Rule of Civil Procedure 78. For the reasons discussed below, the Court will deny both of Hunt's motions to exclude expert reports and testimony. The Court will deny Hunt's summary judgment motion, and the Court will grant in part and deny in part Philips's summary judgment motion.

I. BACKGROUND

This action is a trademark dispute between Hunt, the owner of the "Simplicity" trademark for goods related to its lighting business, and Philips, who seeks to register the trademark "sense and simplicity" with the United States Patent and Trademark Office ("PTO") for goods related to its lighting business.

a. THE PARTIES

Philips is a Dutch company, with its United States lighting headquarters located in New Jersey. (Philips Statement of Material Facts, Docket Entry 190-1, at ¶ 1 [hereinafter PSMF]; Hunt Responsive Statement of Material Facts, Docket Entry 200, at ¶ 1 [hereinafter HRSMF].) Philips has produced a wide variety of products throughout its history, including two main types of lighting products in the United States until 2008: lamps and ballasts. (PSMF at ¶¶ 2, 4; HRSMF at ¶¶ 2, 4.) Philips's Advance business unit has been owned by Philips since 1959; it manufactures ballasts and LED drivers, but does not sell lighting controls. (PSMF, at ¶¶ 11-12; HRSMF at ¶¶ 11-12.) Philips sells 60 percent of its ballasts and 80 percent of its LED drivers and modules to the Original Equipment Manufacturer ("OEM") channel. (PSMF, at ¶ 13; HRSMF at ¶ 13.) Philips's sales of dimming controls, which account for less than 1 percent of Philips's U.S. lighting sales, go through professional (not individual consumer) channels. (PSMF, at ¶¶ 14-15, 45; HRSMF at ¶¶ 14-15, 45.)

Hunt, a self-described leader in the lighting industry based in Fort Collins, Colorado, is a manufacturer of architectural dimming systems. (PSMF at ¶¶ 20-22; HRSMF at ¶¶ 20-22.) Hunt is solely owned by its President, Alan J. Glaser ("Glaser"). (PSMF at ¶ 20; HRSMF at ¶20.) Hunt sells lighting controls, such as LED controllers and dimming systems, among other goods. (PSMF at ¶ 30; HRSMF at ¶¶ 30.) Hunt has used the "Simplicity" mark, sometimes alongside its housemark, for over 22 years. (PSMF at ¶¶ 25, 28; HRSMF at ¶¶ 25, 28.) Hunt asserts that its products are well-known in the lighting industry. (PSMF at ¶ 25; HRSMF at ¶ 25.) Hunt sells products through electrical distributors and sales representatives to a wide range of consumers. (PSMF at ¶¶ 36-37; HRSMF at ¶¶ 36-37.) More than 90 percent of Hunt's dimming systems are used in commercial applications, and Hunt's sales to individual consumers may be less than 5 percent of its overall sales, since Hunt does not sell dimming panels at retail. (PSMF at ¶¶ 45-47; HRSMF at ¶¶ 45-47.)

b. HUNT'S &QUOTSIMPLICITY&QUOT TRADEMARK

Hunt filed an application with the PTO to register "Simplicity" as a trademark for industrial and commercial lighting control panels on June 8, 2004. (PSMF at ¶ 50; HRSMF at ¶ 50.) The PTO issued Registration No. 3254393 to Hunt for "Simplicity" on June 26, 2007. (PSMF at ¶¶ 50-52; HRSMF at ¶¶ 50-52.) Hunt began using the mark on its wallbox dimmers in 2007, and launched its "Simplicity" LED controller wallbox dimmer product in 2008. (PSMF at ¶¶ 55-56; HRSMF at ¶¶ 55-56.) Hunt alleges that it sources SIMPLICITY LIGHTING SOLUTIONS lamps and bulbs, and that it has sold light bulbs featuring the mark "Simplicity." (PSMF at ¶¶ 57-58; HRSMF at ¶¶ 57-58.) Hunt also operates the website www.simplicitylightingsolutions.com, which functions as a link to online lighting retailer Top Bulb. (PSMF at ¶¶ 60-61; HRSMF at ¶¶ 60-61.) This website had generated only 13 orders as of October 2013 (and no orders since 2010), with three of the 13 orders actually for Philips light bulbs. (PSMF at ¶ 67; HRSMF at ¶ 67.) Hunt has promoted the compatibility of its productswith Philips products, and Philips has worked with Hunt to ensure that Hunt's dimmers are compatible with Philips's ADVANCE ballasts. (PSMF at ¶¶ 69-70; HRSMF at ¶¶ 69-70.)

c. PHILIPS'S &QUOTSENSE AND SIMPLICITY&QUOT TAGLINE

Philips has used three different global taglines since 1995: "Let's make things better," from 1995 to September 2004; "sense and simplicity," from September 2004 to November 2013¹; and "innovation + you," from November 2013 to the present. (PSMF at ¶¶ 3, 72; HRSMF at ¶¶ 3, 72.) Philips selected the "sense and simplicity" tagline at the global level in its Netherlands headquarters. (PSMF at ¶ 72; HRSMF at ¶ 72.) Before the final decision to adopt this tagline was made, on March 26, 2004 Philips commissioned a United States-focused trademark search that did not reveal Hunt's use of its "Simplicity" trademark. (PSMF at ¶¶ 72-74; HRSMF at ¶¶ 72-74.) At this time, Hunt had not applied to register "Simplicity" as a trademark with the PTO or with any state trademark office. (PSMF at ¶ 74; HRSMF at ¶ 74.)

Philips holds an international trademark registration for "sense and simplicity," with a priority date of May 27, 2004. (Hunt Statement of Material Facts, Docket Entry 181, at ¶ 1-2 [hereinafter HSMF]; Philips Responsive Statement of Material Facts, Docket Entry 197-1, at ¶¶ 1-2 [hereinafter PRSMF]; PSMF at ¶ 75; HRSMF at ¶ 75.) Philips filed a request for extension of its international registration to the United States, under the Madrid Protocol treaty, on September 3, 2004. (HSMF at ¶¶ 1-2; PRSMF at ¶¶ 1-2; PSMF at ¶ 76; HRSMF at ¶ 76.)² Philips launched its "sense and simplicity" campaign worldwide in September 2004, and began using this tagline for a wide variety of products and services at that time. (PSMF at ¶ 77;HRSMF at ¶ 77.) Philips typically used the tagline in conjunction with its Philips housemark. (PSMF at ¶¶ 78-79; HRSMF at ¶ 78-79.) Philips's brand usage guidelines prohibited the use of the tagline on products and packaging. (PSMF at ¶ 80; HRSMF at ¶ 80.) The tagline typically appeared at the bottom corner of sales literature and technical sheets, as well as on Philips's website. (PSMF at ¶¶ 81-82; HRSMF at ¶¶ 81-82.)

Philips used the "sense and simplicity" tagline at lighting industry trade shows, including Lightfair. (PSMF at ¶ 83; HRSMF at ¶ 83.) Philips also used the tagline, along with the "Philips" housemark, on marketing materials and specification sheets in the United States. (PSMF at ¶ 18; HRSMF at ¶ 18.) In addition, Philips hosted an invitation-only "Simplicity Event" in 2006 to show future products, had a five member "Simplicity Advisory Board" to provide advice on healthcare, lifestyle, and technology issues, and used the term "simplicity" descriptively in print advertisements. (PSMF at ¶¶ 84-86; HRSMF at ¶¶ 84-86.)

Philips spent millions of dollars in the United States on its advertising program, the "Simplicity Brand Campaign," beginning in 2004. (PSMF at ¶¶ 88-89; HRSMF at ¶¶ 88-89.) Philips conducted market research from 2005 to 2006 that revealed that only 1 to 2 percent of consumers who had seen Philips's advertising knew the full tagline. (PSMF at ¶¶ 90; HRSMF at ¶¶ 90.)

Glaser first learned of Philips's "sense and simplicity" tagline in 2005, but did not do further research into the tagline at that time. (PSMF at ¶¶ 38; HRSMF at ¶¶ 38.) Hunt became aware that Philips was using "sense and simplicity" in connection with lighting at the Light Fair show in 2006. (Hunt Supplemental Statement of Facts, Docket Entry 201, at ¶ 168 [hereinafter HSSF]; Philips Response to Hunt Supplemental Statement of Facts, Docket Entry 207-1, at ¶ 168 [hereinafter PRHSSF].)

In 2008 and 2009, Philips acquired several lighting companies, including Genlyte (producer of the LIGHTOLIER and STRAND brands), Dynalite, and Teletrol. (PSMF at ¶¶ 6-9; HRSMF at ¶¶ 6-9.) Eventually, Philips replaced Genlyte's trademarks with Philips's housemark on some, but not all, products. (PSMF at ¶¶ 17, 19; HRSMF at ¶¶ 17, 19.)

Philips began to phase out its use of "sense and simplicity" in 2012. (HSMF at ¶ 10; PRSMF at ¶ 10.) Philips issued press releases in November 2013 announcing that it was launching the new corporate tagline "innovation and you" on or around November 8, 2013. (HSMF at ¶¶ 7, 14; PRSMF at ¶¶ 7, 14.)

d. THIRD-PARTY USE OF THE TERM &QUOTSIMPLICITY&QUOT IN TRADEMARKS

Multiple manufacturers of lighting products, including manufacturers of dimming controls, use the word "Simplicity" as part of their mark or tagline. (PSMF at ¶¶ 94-114; HRSMF at ¶¶ 94-114.) The lighting manufacturers EiKo, Legrand, Eaton/Cooper, and Traxon have testified that they have no record of, and are not aware of, any confusion resulting from use of the word "Simplicity" in their advertising and product marking. (PSMF at ¶¶ 95-96, 98-99, 103-04, 106-07; HRSMF at ¶¶ 95-96, 98-99, 103-04, 106-07.)

e. PROCEDURAL POSTURE

In response to Philips's application to extend its international registration for "sense and simplicity" under the Madrid Protocol, Hunt filed Opposition No. 91173417 before the Trademark Trial and Appeal...