Moroccanoil, Inc. v. Marc Anthony Cosmetics, Inc.

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Central District of California
• Citation: 57 F.Supp.3d 1203
• Decision Date: 16 September 2014
• Docket Number: Case No. CV 13–2747 DMG AGRx.
• Parties: MOROCCANOIL, INC., Plaintiff, v. MARC ANTHONY COSMETICS, INC., Defendant.

57 F.Supp.3d 1203

MOROCCANOIL, INC., Plaintiff
v.
MARC ANTHONY COSMETICS, INC., Defendant.

Case No. CV 13–2747 DMG AGRx.

United States District Court, C.D. California.

Signed Sept. 16, 2014.

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Amy Elizabeth Burke, Mark D. Kremer, Gal Gressel, Zachary T. Page, Conkle Kremer and Engel PLC, Santa Monica, CA, for Plaintiff.

Gary Alan Hecker, Joseph Chase Covello, Jubine David Bagher–Sadighi, James M. Slominski, Hecker Law Group, Los Angeles, CA, Frank M. Weyer, Techcoastlaw, Hollywood, CA, for Defendant.

ORDER RE MOTIONS FOR SUMMARY JUDGMENT AND SUMMARY ADJUDICATION OF ISSUES [DOC. 211, 215, 219, 224, 227, 229, 233.]

DOLLY M. GEE, District Judge.

This matter is before the Court on the parties' motions for summary judgment or summary adjudication of issues. [Doc. 211, 215, 219, 224, 227, 229, 233.] The Court held a hearing on the motions on September 12, 2014. The Court has duly considered the arguments and evidence presented in support of and in opposition to the motions. For the reasons discussed below, Marc Anthony's motions for summary judgment are DENIED. The Court GRANTS Moroccanoil's motions for summary adjudication of affirmative defense nos. two, four, and five, and DENIES the motion as to affirmative defense no. three.

I.

PROCEDURAL BACKGROUND

On April 19, 2013, Plaintiff Moroccanoil, Inc. filed a complaint against Defendant Marc Anthony Cosmetics, Inc., asserting claims for: (1) federal trademark infringement pursuant to 15 U.S.C. § 1114 ; (2) federal trademark infringement and unfair competition in violation of 15 U.S.C. § 1125(a) ; (3) common law trademark infringement and unfair competition; and (4) statutory unfair competition and false advertising under Bus. & Prof.Code §§ 17200 and 17500. [Doc. # 1.] On March 28, 2014, Marc Anthony filed a Motion for Judgment on the Pleadings. [Doc. # 60.] The Court denied the Motion. [Doc. # 172.]

On June 4, 2014, Marc Anthony filed three motions for summary judgment. [Doc. 211, 215, 219.] That same day, Moroccanoil filed four motions for summary adjudication of affirmative defense nos. two, three, four, and five. [Doc. 224, 227, 229, 233.] On August 22, 2014, both parties' filed oppositions. [Doc. 255, 260.] On August 29, 2014, each party filed a reply. [Doc. 264, 267.]

II.

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FACTUAL BACKGROUND¹

A. Moroccanoil's Objections to Marc Anthony's Evidence of Previous Third Party Settlement

Marc Anthony offers evidence that Moroccanoil entered into a previous third party settlement. Moroccanoil correctly objects that this evidence is inadmissible under Federal Rule of Evidence 408 “either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction.” See Hudspeth v. C.I.R., 914 F.2d 1207, 1213 (9th Cir.1990) (“Rule 408 does apply to situations where the party seeking to introduce evidence of a compromise was not involved in the original compromise.”); see also Playboy Enterprises, Inc. v. Chuckleberry Pub., Inc., 687 F.2d 563, 568–69 (2d Cir.1982) (affirming district court's refusal to consider evidence under Fed.R.Evid. 408 that one party consented to third-parties continued use of similar product and “conceded in a settlement agreement in another lawsuit” that products were not confusingly similar, as evidence “undermining plaintiff's claim that source confusion exists” in present case); Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., Case No. 07–03752, 2008 WL 4614660, *6 (N.D.Cal. Oct. 16, 2008) (sustaining objections to evidence of settlements between plaintiff and third-party in trademark suit).

In its Reply, Marc Anthony argues that there is nothing in Rule 408 that bars evidence of the presence of third parties in the marketplace and that this evidence is probative as to the strength and weakness of Moroccanoil's asserted mark. (Marc Anthony Reply at 16–17.) A similar argument was rejected by the Northern District of California in Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., 2008 WL 4614660, *6.

Tellingly, Marc Anthony's motions for summary judgment on the trademark and trade dress claims do not even address the “strength” of the mark factor—the first factor in the Ninth Circuit's eight-factor analysis for trademark infringement. KP Permanent Make–Up, Inc. v. Lasting Impression I, Inc., 408 F.3d 596, 608–09 (9th Cir.2005). Instead its motions address only two of the eight factors: similarities in the marks and marketing channels used. Marc Anthony's third motion, which argues that the trademark Moroccanoil should be found invalid on the basis that the term “Moroccanoil” has become generic, does not make any arguments supported by evidence of the third party settlement. (See MSJ Re Invalidity of U.S. Trademark Registration [Doc. # 275].)

In any event, the settlement agreement is not the most probative evidence of the abundance of similar products on the market. Moroccanoil's objection is sustained.

B. Marc Anthony's Objections to Dr. Ingrid Martin's Customer Surveys and Moroccanoil's Objections to the Expert Report of Joel H. Steckel, Ph.D.

Marc Anthony objects to the methodology used in conducting Dr. Ingrid Martin's customer surveys. (Pl's Exhs. 236, 237 [Doc. 260–11, 260–13].) “In trademark cases, surveys are to be admitted as long as they are conducted according to

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accepted principles and are relevant.” Wendt v. Host Int'l, Inc., 125 F.3d 806, 814 (9th Cir.1997). “Challenges to survey methodology go to the weight given the survey, not its admissibility.” Id.

Marc Anthony asserts that the surveys are inadmissible because: (1) Dr. Martin only used photographs that do not accurately reflect, the relative colors and sizes of the parties' products (compare Exh. # 237 at pg. 6 [Doc. # 260–13], with [Doc. 212–15, 212–21, 212–30] ); (2) Dr. Martin did not present samples of products from the full universe of products containing argan oil—i.e., third parties' products; and (3) Dr. Martin did not present any images of the products as they actually appear in the marketplace. (Marc Anthony's Objections to Plaintiff's Evidence Submitted in Opposition [Doc. # 266].) In addition, Marc Anthony objects that Dr. Martin did not eliminate possible guesses, failed to account for “noise” levels in her survey report, has never performed a trademark survey before, and has never used this methodology before. (Marc Anthony's Supplemental Objections [Doc. # 271].)

In THOIP v. Walt Disney Co., 690 F.Supp.2d 218 (S.D.N.Y.2010), upon which Marc Anthony primarily relies, the party objecting to the customer survey submitted expert testimony and academic literature discussing its flaws. Id. at 235–241. Marc Anthony's only such evidence here is in the Expert Report of Joel H. Steckel, Ph.D., dated August 19, 2014, and submitted as Exhibit 352 to Marc Anthony's Reply. [Doc. # 264–4.]

Moroccanoil objects to the Steckel Report on the grounds that it was submitted for the first time in Marc Anthony's Reply (Moroccanoil Objection [Doc. 283] ) and is unsworn. The Court SUSTAINS the objection on both grounds.² See Provenz v. Miller, 102 F.3d 1478, 1483 (9th Cir.1996) (“Where new evidence is presented in a reply to a motion for summary judgment, the district court should not consider the new evidence without giving the [non-]movant an opportunity to respond.”); Shuffle Master, Inc. v. MP Games LLC, 553 F.Supp.2d 1202, 1210 (D.Nev.2008) (“[It] is well established, that an unsworn expert report is inadmissible”) (collecting cases); see also Ridgel v. United States, SACV 12–0071 JGB MLG, 2013 WL 2237884 (C.D.Cal. May 21, 2013) (“Courts in the Ninth Circuit ‘have routinely held that unsworn expert reports are inadmissible.’ ”) (collecting cases).

C. Moroccanoil

Moroccanoil has three federally registered trademarks.³ Moroccanoil's trademark

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registrations claim the orange “M” and the colors orange, white, and blue as source-indicative properties. (Moroccanoil's Reply to Marc Anthony's Statement of Issues in Opposition to Moroccanoil's Motions for Summary Judgment (“Moroccanoil's Reply Statement—Fair Use”) ¶¶ 3–5 [Doc. # 267–1].) In addition, the word mark “Moroccanoil” was registered on August 5, 2008 with the PTO, for use with “hair conditioners, namely curl creams, hydrating styling creams, intense moisturizing masques [sic], and styling and finishing oils.” (Moroccanoil's Reply Statement—Genericness ¶ 2.)

In January of 2007, Moroccanoil was selling only one product, an oil treatment called the “Moroccanoil Oil Treatment.” (Moroccanoil's Opposition to Marc Anthony's Facts in Support of its Trade Dress Motion ¶ 5 [Doc. # 260–1].) Since then, Moroccanoil has expanded to produce a variety of hair care products containing argan oil, which include shampoo, conditioner, mousse, hairspray, and oil treatment. (Page Decl. ¶¶ 14, 41, Exhs. 26, 171, 235 [Docs. 260–2, 260–10].)

Moroccanoil sells its products...