Swatch, S.A. v. Beehive Wholesale, L.L.C.

• Decision Date: 16 August 2012
• Docket Number: Civil Action No. 1:11–cv–434.
• Citation: 888 F.Supp.2d 738
• Court: U.S. District Court — Eastern District of Virginia
• Parties: SWATCH, S.A., Plaintiff, v. BEEHIVE WHOLESALE, L.L.C, Defendant.

888 F.Supp.2d 738

SWATCH, S.A., Plaintiff,

v.BEEHIVE WHOLESALE, L.L.C, Defendant.

Civil Action No. 1:11–cv–434.

United States District Court,

E.D. Virginia,

Alexandria Division.

Aug. 16, 2012.

Kenneth W. Curtis, Allred, Bacon, Halfhill & Young PC, Fairfax, VA, for Plaintiff.

William Jerome Utermohlen, Oliff & Berridge PLC, Alexandria, VA, for Defendant.

MEMORANDUM OPINION

LIAM O'GRADY, District Judge.

This matter comes before the Court on Defendant Beehive Wholesale, L.L.C.'s (“Beehive”) Motion in Limine Regarding Trademark Trial and Appeal Board (“TTAB” or “Board”) Trial Record (Dkt. No. 20); Beehive's Motion to Strike (Dkt. No. 44); Plaintiff Swatch, S.A.'s (“Swatch”) First Motion to Exclude Evidence (Dkt. No. 48); and adjudication of this TTAB appeal on the merits.

Central to the merits of this dispute is whether Defendant's SWAP mark creates a likelihood of confusion, dilutes Plaintiff's SWATCH marks, or is even registerable as a trademark. This matter began when Plaintiff opposed Defendant's application to register a mark (Opposition No. 91169312) before the TTAB. The TTAB rejected Plaintiff's opposition. Here, Plaintiff seeks to reverse the TTAB's decision and proceed under the Lanham Act, the Trademark Dilution Act, and Virginia unfair competition and trademark law. Specifically, Plaintiff's Amended Complaint includes: Count I—appeal of the TTAB's dismissal of Swatch's opposition to Beehive's mark; Count II—trademark infringement under the Lanham Act, 15 U.S.C. § 1114; Count III—federal unfair competition under the Lanham Act, 15 U.S.C. 1125(a); Count IV—trademark dilution under the Trademark Dilution Act, 15 U.S.C. § 1125(c); Count V—common law unfair competition; and Count VI—trademark infringement under Va.Code § 59.1–92.12.

BACKGROUND

A. The Parties and their marks

Plaintiff Swatch is a manufacturer of watches, clocks, and parts therefor, along with jewelry, books, and magazines for watch collectors. Plaintiff is a Swiss corporation with its principal place of business in Bienne, Switzerland. The Swatch Group (U.S.) Inc. (“Swatch (U.S.)”) is a non-party, wholly owned Swatch subsidiary that acts as the exclusive importer and distributor of Swatch watches in the United States. Patricia Higgins (“Higgins”) is the Swatch brand manager for Swatch (U.S.).

Plaintiff owns U.S. trademark registrations for SWATCH (Reg. Nos. 1356512, 1671076, and 2050210). Reg. No. 1671076 refers to SWATCH (in typed formal) for “watches, clocks and parts thereunder.” Reg. No. 1356512, for “watch faces, ribbon bands, slide pendants, and beaded watch bands” and 2050210, for “books and periodicals” refer to:

IMAGE

Defendant Beehive is in the business of wholesale and retail sales of various goods, including watches, watch faces, ribbon watch bands, slide pendants, and beaded watch bands sold under the SWAP mark. Beehive is a Louisiana limited liability company, with its principal place of business in Ruston, Louisiana. Amy Bernard is the founder of the business now operated by Beehive; she oversees Beehive's product development and design. Brent Bernard serves as Beehive's President, while Michelle Bernard is Beehive's Chief Operating Officer and Jack Rome, Jr. is its Chief Financial Officer.

The SWAP mark at issue in the underlying TTAB litigation was for a stylized “SWAP,” as follows:

IMAGE

In this action, Swatch also points to variants of this mark as additional evidence of infringement. The variants typically add a clock-face within the “S” of the stylized SWAP along with additional language:

IMAGE

The Court refers to any variant with a clock-face within the “S” as the “Clock–Face Variant.”

B. Procedural History

Amy Bernard filed a trademark application for the SWAP mark on July 30, 2004. The application indicated the date of first use was June 1, 2003, for watch faces, ribbon watch bands, gel bands, slide pendants,and beaded watch bands. The trademark application was later assigned to Defendant Beehive. The Trademark office approved Bernard's Application for SWAP and published for a potential opposition on December 6, 2005.

Swatch opposed Mrs. Bernard's application on February 3, 2006. Swatch alleged likelihood of confusion and dilution of its SWATCH mark. On April 14, 2008, Swatch filed an Amended Notice of Opposition to add an assertion that SWAP was descriptive of Beehive's recited goods and therefore unregisterable. Both parties engaged in discovery before the Board, consisting of depositions, interrogatories, document production requests, and requests for admission. Discovery, testimonial, and rebuttal depositions were taken of Beehive's principals and designees of Swatch and third-party Swatch Group (U.S.). The TTAB decided in favor of Beehive on all three issues on February 23, 2011.

PRELIMINARY MOTIONS

The Parties filed four preliminary and evidentiary motions. Each motion is addressed in turn. First, Defendant asks the Court to determine the admissibility of the TTAB trial record (Dkt. No. 20). Beehive asks the Court to find that the TTAB trial record, including the trial depositions of its witnesses, are admissible subject to specific objections made in the course of the TTAB proceeding. See15 U.S.C. § 1071(b)(3) (“In suits brought hereunder, the record in the Patent and Trademark Office shall be admitted on motion of any party.... The testimony and exhibits of the record in the Patent and Trademark Office, when admitted, shall have the same effect as if originally taken and produced in the suit.”). In response, Swatch withdrew its objections with the exception of three specific objections to Defendant's exhibits 36–38. The exhibits in question are Trial Depositions of Beehive's principals. Swatch objects to each deposition for “failure to disclose designations, hearsay and Defendant's naming deponent as a witness,” and maintains the objections contained within each transcript. Pl. Opp'n, Dkt. No. 23 at 1–2. Given the language of § 1071(b)(3), the Court GRANTS Beehive's Motion (Dkt. No. 20) and finds the TTAB Trial Record admissible subject only to Swatch's specific objections contained within the transcripts.

Second, Beehive objects to and moves to strike portions of the evidence offered by Swatch (Dkt. No. 44). Beehive's Motion is GRANTED in PART and DENIED in PART. Beehive objects to the hearsay and lack of foundation for: (1) Swatch's non-accounting records; (2) business records evidence; (3) newspaper article; (4) survey/expert evidence; (5) website printouts; and (6) additional miscellaneous evidence. Subject to a number of exceptions, the Federal Rules prohibit the admission of hearsay, defined as “a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” Fed.R.Evid. 801(c), 802. Plaintiff maintains its news articles, advertisements, and PEX 57 are admissible for whatever they show on their face, rather than the truth of the matter asserted. The Court agrees with regard to Plaintiff's news articles and advertisements, which the Court admits for the purpose of showing that others knew of Plaintiff's brand. See, e.g., Price v. Rochford, 947 F.2d 829, 833 (7th Cir.1991) (examining newspaper articles and finding no hearsay problem because the articles were not offered to prove the plaintiff was in bankruptcy, but that the plaintiff was reported to be in bankruptcy). However, the Court finds PEX 57, a Women's Wear Daily Brand Recognition Survey, inadmissible. Swatch seeks admission and authentication of the survey through Higgins,non-party Swatch (U.S.)'s brand manager. Higgins Decl. ¶¶ 1, 52. But Higgins had nothing to do with the survey. She did not conduct it; she did not write the Women's Wear Daily article about the survey; she is not an expert; and she has no personal knowledge of the survey's methodology other than what appears in the Women's Wear Daily article announcing its results. SeeFed.R.Evid. 702–3, 801(c), 802.¹ Higgins' proffer that the survey is a “true and accurate” version of the article featured in Women's Wear Daily is insufficient to eliminate the evidentiary concerns raised by Beehive and as a result, the survey is in admissible.² Higgins Decl. ¶ 52.

Beehive's additional objections take further issue with the introduction and authentication of various exhibits by Higgins. Higgins began work with Swatch (U.S.) on September 25, 2005, and Beehive maintains “she is incapable of testifying to events at Swatch before September 2005 or the creation of, or events mentioned in, any Swatch documents generated or referring to events before that date.” Def. Mot., Dkt. 45, at 3. Higgins has access to, regularly reviews, and is custodian of a range of Swatch (U.S.)'s business documents including current and historical financial statements. Higgins Decl. ¶ 6. The Court thus finds Higgins competent to authenticate and provide foundation for the disputed documents, and will take Beehive's objections into account as to the weight of the evidence. See Nader v. Blair, 549 F.3d 953, 963 (4th Cir.2008).

Third, Plaintiff moves to exclude a variety of Beehive's trial exhibits and certain designations from Jack Rome's declaration (Dkt. No. 48). Swatch maintains certain exhibits are irrelevant, contain hearsay, lack foundation, or constitute unfair surprise. After a review of the exhibits and the objections thereto, the Court DENIES Swatch's objections. Rather than strike the exhibits and declaration in question, the Court will take Swatch's objections into account when considering their weight.

Fourth, within its opposition brief, Swatch moves to strike Defendant Beehive's Trial Brief as either not filed or in excess of the 50–page limit. Pl. Opp'n at 3–4, Dkt. No. 55. Beehive responds that rather than file a separate trial brief, it incorporated its briefing into its proposed Findings of Fact and Conclusions of Law. The portion of Defendant's “Conclusions of Law,” which is essentially its trial brief is...