Solid 21, Inc. v. Richemont North America, Inc.

Background

Solid 21, Inc. brought a trademark-infringement action against Richemont North America, Inc., Richemont International S.A., and Montblanc-Simplo GmbH concerning Solid 21’s RED GOLD mark. The opinion resolves Solid 21’s motions in limine, which are requests to limit or exclude evidence before trial. Solid 21 sought to exclude testimony and reports from the defendants’ experts, Mark Keegan and Patrick Kennedy.

The court applied Federal Rule of Evidence 702 and the Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals, Inc. Under that standard, the party offering an expert must show that the witness is qualified, that the testimony rests on sufficient facts and reliable methods, that those methods were reliably applied, and that the testimony is relevant and helpful to the jury. The court also noted that evidence is generally excluded on a motion in limine only when it is clearly inadmissible on all potential grounds.

Mark Keegan’s Survey Testimony

The defendants offered Keegan as a survey expert. He designed and conducted a study of 686 current and prospective luxury-watch purchasers. The survey asked respondents to identify the brands they saw in two Richemont advertisements. Four respondents, or 0.6 percent, identified “red gold” as a brand in the first advertisement, and one respondent, or 0.1 percent, did so for the second.

Solid 21 argued that Keegan was unqualified because he lacked a degree related to consumer surveys and that his survey was irrelevant and unreliable. The court rejected those arguments. Although Keegan lacked the identified degree, his resume stated that he had designed and conducted more than 700 consumer research studies involving more than 250,000 respondents over two decades. The court found that experience sufficient to satisfy the threshold for expert admissibility.

The court also found the survey potentially relevant to the defendants’ fair-use defense. Fair use requires showing that the term was used other than as a mark, in a descriptive sense, and in good faith. The court concluded that consumer responses about whether “red gold” was understood as a brand could bear on whether the term was used descriptively. Solid 21’s arguments that the survey was not a genericness survey and did not measure likelihood of confusion did not establish that it was irrelevant to every potential issue.

The court rejected Solid 21’s methodological objections concerning the survey’s income threshold, the possible use of cell phones, the size of the advertisement images, and the failure to filter certain responses. Respondents had to have purchased a luxury watch within the past three years or intended to purchase one within the next two years. The court stated that the alleged flaws might affect the weight given to the survey, but Solid 21 had not shown that they made the evidence inadmissible or irrelevant. The court therefore denied Solid 21’s motion to exclude Keegan’s testimony.

Patrick Kennedy’s Testimony

The defendants offered Kennedy as an expert on allocating profits. His report identified sales associated with advertisements containing potentially infringing uses of “red gold” and applied a 0.6 percent apportionment factor based on Keegan’s survey results.

Apportionment Analysis

The court granted Solid 21’s motion to exclude Kennedy’s reliance on Keegan’s survey for his apportionment analysis. Keegan’s survey measured whether consumers recognized “red gold” as a brand. Kennedy used those results to estimate the effect of the term on consumers’ purchasing decisions and to conclude that only 0.1 percent to 0.6 percent of purchases were connected to the term. The court found a fundamental mismatch between what the survey measured—brand awareness—and how Kennedy used it—consumer motivation and profit apportionment.

The court explained that brand awareness may be relevant to whether a use is infringing, but an apportionment analysis asks whether, assuming infringement, sales or profits were based on something other than the allegedly infringing use. Because Keegan’s findings did not show what motivated consumers to buy the defendants’ products, they could not serve as the basis for Kennedy’s apportionment analysis.

Advertisement Categories and Legal Conclusions

Solid 21 also challenged Kennedy’s opinions about how “red gold” was used in the defendants’ advertisements. The court denied the request to the extent it sought to prevent Kennedy from grouping or categorizing advertisements. The court found that grouping the advertisements could help organize a large amount of material for the jury, even though jurors could examine the advertisements themselves.

The court granted the request to the extent it sought to bar Kennedy from summarizing or explaining the court’s earlier rulings, stating that his categories were based on his reading of those rulings, or offering legal conclusions about which advertisements were potentially infringing. Kennedy was not offered as an expert on fair use and could not tell the jury that his categories represented an application of the court’s prior decisions. He could present damages findings by advertisement category rather than by each individual advertisement, but he could not describe those categories as an application of the court’s earlier rulings.

Disposition

The court denied Solid 21’s motion in limine concerning Mark Keegan. It denied in part and granted in part Solid 21’s motion in limine concerning Patrick Kennedy. The clerk was directed to terminate ECF Nos. 186 and 190.