Uncommon, LLC v. Spigen, Inc.
| Decision Date | 11 June 2019 |
| Docket Number | No. 18-1917,18-1917 |
| Citation | 926 F.3d 409 |
| Parties | UNCOMMON, LLC, Plaintiff-Appellant, v. SPIGEN, INC., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Edward L. Bishop, Benjamin Adam Campbell, Attorneys, BISHOP DIEHL & LEE, LTD, Schaumburg, IL, for Plaintiff-Appellant.
Heedong Chae, Karen Y. Kim, Attorneys, LUCEM PC, Los Angeles, CA, Karl W. Roth, Attorney, ROTH LAW GROUP LLC, Chicago, IL, for Defendant-Appellee.
Before Sykes, Scudder, and St. Eve, Circuit Judges.
The word "capsule" can describe many things—a pharmaceutical pill, a space pod, or a short synopsis, for example. What about a cellphone case?
The U.S. Patent and Trademark Office has given conflicting answers. It has, on a few occasions, found that "capsule" was "merely descriptive" of cellphone cases, a finding that precludes the mark from registration on the Principal Register. Yet the Office has also found otherwise and allowed one manufacturer—Uncommon, LLC—to register "capsule."
Rival case manufacturers still use the term, though. Uncommon sued one of those manufacturers, Spigen, Inc., for trademark infringement and unfair competition. In discovery, Spigen produced a survey to prove that consumers did not associate "capsule" with Uncommon's cases, and it disclosed the person who conducted the survey as a "non-testifying expert." That was a problem: without foundational expert testimony to explain the survey's methodology, it was inadmissible. But when the litigation reached summary judgment, the district court excused Spigen's error. It then granted Spigen summary judgment on the merits.
We affirm. Spigen's disclosure was inaccurate, but calling it harmless, as the district court did, was reasonable. With the survey, there was no genuine issue of material fact as to the mark's invalid registration. Nor was there an issue of fact regarding the unlikelihood of consumer confusion. Summary judgment was therefore appropriate.
Uncommon and Spigen are manufacturers and retail sellers of cellphone cases. Starting in December 2009, Uncommon began marketing a line of cases it called "CAPSULE." Its first sale came in July 2010, and Uncommon applied to register the mark with the Patent Office in September 2012. In May 2013, the Patent Office issued Trademark Registration No. 4,338,254. The registration protected "capsule" for "cases specifically adapted for protection and storage of consumer electronics, namely, cellular phones and mobile media players."
That registration was not the first or last time the Patent Office would address the mark "capsule" for cellphone cases. In July 2008, the Office had issued a "capsule" registration to Vatra, Inc., which had claimed to first use the term in September 2007. (The Office later canceled Vatra's trademark in February 2015, after Vatra failed to certify its continued use.) Capsule Case Corp. likewise attempted to register "CAPSULE CASE" in 2017, though the record does not say what came of that application.
Spigen joined the "capsule" ranks relatively early, in 2010. It sold its first "capsule"-branded case in June of that year, when, all agree, Spigen was unaware of Uncommon's trademark. Spigen then grew the brand into a line: the "Capsule-family" cases. The family includes the "Capsule Capella," the "Rugged Capsule," the "Capsule Ultra Rugged," the "Capsule Solid," and the "Air Capsule" cases.
Spigen applied to register the family of marks between 2014 and 2016. It was able to register three of those marks, "Capsule Capella," "Capsule Solid," and "Air Capsule." But for both "Capsule Solid" and "Capsule Capella" the Office decided that the marks were descriptive, at least in part. "Capsule Solid" was therefore put on the Supplemental (as opposed to Principal) Register, and the Office required the "Capsule" in "Capsule Capella" to be disclaimed by Spigen as descriptive and nonexclusive. The Office initially declined to register the other two marks, "Rugged Capsule" and "Capsuled Ultra Rugged," concluding that both were descriptive and likely to be confused with Uncommon's mark. These two registration applications have been suspended pending this litigation.
Uncommon's and Spigen's "capsule" cases have more in common than the name. Both sell their cases online, through their own websites and online retailers, like Amazon and eBay; both have a national market; both use the "capsule" name alone and in conjunction with other descriptors; and both use dark-colored, sans-serif font for the mark on their packaging. But there are differences too. Uncommon's cases can be customized with personal images, or they come "ready-made" with colorful designs or artwork. Spigen's cases cannot be customized and are generally solid in color. Uncommon, moreover, does not generally make cases for iPhones after the 5/5s generation (as far as this record is concerned); Spigen does—and, unlike Uncommon, it makes cases for Samsung cellphones as well. The two companies' packaging is also different, as shown by the record examples below.
As illustrated, Uncommon's cases generally come in some combination of a blue, grey, white, and/or black package. Spigen's come in a distinctive orange and black package.
Seeing enough similarities, however, Uncommon filed this suit in December 2015, alleging that Spigen's use of "capsule" constituted trademark infringement and unfair competition under federal and state law. See 15 U.S.C. §§ 1114, 1125(a).1 Spigen countersued. It sought, among other things, to cancel Uncommon's registration.
The case entered discovery. Spigen disclosed its experts to Uncommon in December 2016. There were two: Doug Bania, who would testify to the lack of confusion, the descriptiveness of Uncommon's mark, secondary meaning, and damages; and Kirk Martensen, who, according to Spigen's disclosure, was a "non-testifying expert who will conduct a consumer survey" that may be relied upon by Bania. The disclosure added that Martensen may "be called to testify on the methodology of the survey if needed."
Spigen later sent Uncommon a two-page summary of Martensen's credentials. Bania's report, produced shortly after, relied extensively on Martensen's survey, which was attached to the report with its underlying data. In his deposition, Bania admitted that he was not an expert on survey methodology. Uncommon never asked to depose Martensen.
The parties cross-moved for summary judgment in June 2017. Spigen relied on the Martensen survey in its opening. Uncommon responded that the survey could not be considered at summary judgment, primarily because no expert could testify to its methodology. Spigen tried to fill that evidentiary gap in its reply. It submitted a declaration from Martensen explaining the survey's methodology—information which, by and large, had been disclosed in the earlier production of the survey itself. Uncommon moved to strike the declaration as untimely and inadequate. It did not seek leave to file a surreply responding on the merits.
The district court ruled in March 2018. It held that Spigen's failure to disclose Martensen as a testifying expert was harmless under Federal Rule of Civil Procedure 37(c)(1). The court further found that the survey was sufficiently reliable and supported by the declaration. Turning to the merits, the district court disposed of the case on two alternative grounds. First, the court found no issue of material fact as to whether "capsule" was descriptive, per the word's dictionary definitions, and it found no issue as to whether the mark lacked a secondary meaning. The court therefore canceled the registration, which necessarily defeated Uncommon's infringement and unfair-competition claims. Second, the court decided that there was no issue of fact regarding the lack of confusion posed by Spigen's use of "capsule," which also defeated both of Uncommon's claims.
The district court accordingly entered summary judgment in Spigen's favor. Uncommon appeals.
Uncommon submits that the district court erred in three ways: by considering the Martensen declaration; by canceling the mark's registration; and by deciding, alternatively, that there was no likelihood of confusion between Uncommon's cases and Spigen's. Because the Martensen declaration colors the summary-judgment analysis, we start there.
At summary judgment, Spigen relied on a piece of evidence familiar in trademark litigation—a consumer survey. See generally Robert C. Bird and Joel H. Steckel, The Role of Consumer Surveys in Trademark Infringement: Empirical Evidence from the Federal Courts , 14 U. Pa. J. Bus. L. 1013 (2012). Like all summary-judgment evidence, the survey, which Martensen conducted, needed to be admissible (or capable of taking admissible form) for the court to consider it. See, e.g. , Cehovic-Dixneuf v. Wong , 895 F.3d 927, 931 (7th Cir. 2018).
To be admissible, a consumer survey almost always requires expert testimony. This is because conducting a survey entails expertise and the exercise of professional judgment. See Muha v. Encore Receivable Mgmt., Inc. , 558 F.3d 623, 625–26 (7th Cir. 2009) ; Spraying Sys. Co. v. Delavan, Inc. , 975 F.2d 387, 394 (7th Cir. 1992). No survey is "foolproof," and examiners make a range of decisions about sample size, question design, survey format, and statistical analysis—all of which can impact reliability. See Kraft Foods Grp. Brands LLC v. Cracker Barrel Old Country Store, Inc. , 735 F.3d 735, 741–42 (7th Cir. 2013) ; see also 6 McCarthy on Trademarks and Unfair Competition § 32:158 (5th ed. 2019) ("McCarthy on Trademarks"). Expert testimony is therefore necessary to explain the survey's methodology and to attest to its compliance with principles of the profession. See Fed. R. Evid. 702 ; Evory v. RJM Acquisitions Funding L.L.C. , 505 F.3d 769, 776 (7th Cir. 2007).
Because Spigen's survey evidence required expert testimony, Spigen had to comply with Federal Rule of Civil...
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