John Robert Blakey, United States District Judge
Plaintiff Uncommon, LLC sued Defendant Spigen, Inc. for using the trademarked term Capsule in the names of its cell phone cases, the same product that Plaintiff sells under the Capsule mark. Plaintiff brings claims for trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. §§ 1114, 1125(a), and unfair competition under Illinois common law. [1]. Defendant asserts counterclaims seeking cancellation of Plaintiffs Capsule mark for genericness and descriptiveness. [47]. Before this Court are Plaintiffs motion to strike Defendants expert report [104]; Defendants motion to strike Plaintiffs expert report [107]; Plaintiffs motion to strike an affidavit from Defendants nontestifying expert [177]; Defendants motion to withdraw answers to Plaintiffs requests for admission [180]; and the parties cross-motions for summary judgment [123, 147].
As explained below, this Court denies the parties motions to strike; partially grants and partially denies Defendants motion to withdraw answers; and partially grants and partially denies the parties motions for summary judgment.
I. Background
A. Disputed Facts
The facts in this section come primarily from Defendants Local Rule 56.1 statement of facts [124] and Plaintiffs Local Rule 56.1 statement of facts [149].
The parties disagree over many of the circumstances of this case and each filed extensive responses to the others statement of facts, [152, 157], and statement of additional facts, [169, 171]. Simply denying a fact that has evidentiary support does not transform it into a disputed issue of fact sufficient to survive a motion for summary judgment. Roberts v. Advocate Health Care , 119 F.Supp.3d 852, 854 (N.D. Ill. 2015). Denials must cite specific evidentiary materials justifying the denial or be disregarded. Malec v. Sanford , 191 F.R.D. 581, 584 (N.D. Ill. 2000). Further, responses to the opposing partys statement of facts are not the place for purely argumentative details, id. , or legal conclusions, Cady v. Sheahan , 467 F.3d 1057, 1060 (7th Cir. 2006). District courts may disregard any improper denials. See id. ; Ammons v. Aramark Unif. Servs. , 368 F.3d 809, 817 (7th Cir. 2004).
Plaintiff argues in its reply brief on its motion for summary judgment that many of Defendants responses to Plaintiffs statement of facts should be disregarded. [168] at 7. But Plaintiff waived this argument by failing to raise it before the reply brief. See, e.g. , Padula v. Leimbach , 656 F.3d 595, 605 (7th Cir. 2011). Even so, this Court retains discretion to enforce Local Rule 56.1. See Ammons , 368 F.3d at 817. To the extent that Defendants responses fail to cite specific evidence in the record, this Court will disregard them and deem Plaintiffs statement of fact to be admitted. See Malec , 191 F.R.D. at 583-84.
The majority of responses that Plaintiff challenges sufficiently conform to Local Rule 56.1 to remain in the record. In most responses Defendant admits the statement in part and disputes the remainder either by citing to the record or re-citing the portion of the record relied upon by Plaintiff. In some responses, Defendant limited its reply because it objected to the form of Plaintiffs statement as containing improper legal argument or as unsupported by the evidence. This Court considers this to be the case with respect to Defendants responses to paragraphs 1-3, 5, 7-10, 15, 16-18, 20, 21, 26, 29-37, and 39-42, and declines to strike those responses. In a few instances, however, Defendant failed to cite to any record evidence: this is true of its responses to paragraphs 6, 14, 23, 25, 28, and 38 of Plaintiffs statement of facts. This Court disregards those denials and considers Plaintiffs corresponding statements admitted. Malec , 191 F.R.D. at 583-84.
B. This Case
The parties make and sell cell phone cases. PSOF ¶¶ 5, 6. Plaintiff sells a number of case models that consumers can customize with their own images, as well as ready-made varieties available with mass-produced designs or licensed artwork. DSOF ¶ 42; R. DSOF ¶ 40.
In September 2012, Plaintiff applied to register the name Capsule as a trademark for one of its lines of cases. PSOF ¶ 4. The Capsule mark issued in May 2013 as Trademark Registration No. 4,338,254, for cases specifically adapted for protection and storage of consumer electronics, namely, cellular phones and mobile media players. Id. ; [149-3]. The marks registration lists its first use and in commerce dates as December 16, 2009. [149-3]. Its registration date is May 21, 2013. Id. Plaintiff sold its first Capsule case in July 2010, and has continuously sold cell phone cases with the mark since that date. DSOF ¶ 32; PSOF ¶ 5.
When Plaintiff registered its mark, it appears that another company, Vatra, Inc., had registered Capsule as a trademark for bags and cases for holding or carrying cell phones, cameras, glasses, and other accessories. [124-8] at 6. Vatra, however, never followed up on its initial registration by providing a certificate of continued use or excusable non-use, which must be submitted to the U.S. Patent and Trademark Office (USPTO) between the fifth and sixth year after registration to maintain a valid trademark. See id. at 5. In any event, the USPTO cancelled Vatras Capsule mark in February 2015 for lack of that certificate, id. at 3, and it did not flag Vatras mark as a potential source of confusion when Plaintiff applied for its Capsule mark, DSOF ¶ 13; [149-3].
There are, however, additional third-party suppliers that sell cases whose names contain the term Capsule, including Accez, iPhone TPU, Jammylizard, Catalyst, and others. See [124-10]. Plaintiffs own exhibit of online search results for capsule, submitted with its Complaint, shows that case producers (other than the parties here) use the term. [1-6]; [124-9] at 8. Such third-party use of Capsule, even in relation to cell phone cases, did not affect Plaintiffs registration of its mark with the USPTO.
Around 2010, Defendant also began selling cell phone cases with the name Capsule. PSOF ¶ 6. These cases sometimes, but not always, used capsule with other modifiers; for example, Defendants products include Air Capsule, Capsule Solid, and Capsule Capella. Id. ¶¶ 6, 9; DSOF ¶¶ 53, 54. By November 2014, Defendant had submitted registration applications to the USPTO to trademark these Capsule family product names. PSOF ¶¶ 6, 12. At least one of these marks-Capsule Capella-was approved and registered with the USPTO in May 2017. [124-4] at 4; CAPSULE CAPELLA, Registration No. 5,297,564. Although the Capsule Capella mark was originally rejected by the USPTO for likelihood of confusion, the objection was withdrawn upon review. [124-4] at 6. The registration for Capsule Capella includes the disclaimer that Defendant makes no claim to the exclusive right to use Capsule apart from its appearance in the mark as shown. CAPSULE CAPELLA, Registration No. 5,297,564. Defendants Rugged Capsule mark was also initially rejected, both for likelihood of confusion and because the USPTO determined that the mark was merely descriptive of an attribute of the Defendants case. [124-6] at 16-17. Defendant still sells its Capsule family cases, on its website and through online retailers such as Amazon and eBay. PSOF ¶ 11.
Defendant also claims that it sold a Capsule cell phone accessory in June 2009, predating Plaintiffs first use of the Capsule mark. See R. DSOF ¶ 22; [124-11]. This product was the SGP Metal Advance Light, which came in a variety of styles, including Capsule Nickel and Capsule Gold. See PSOF ¶ 25; [124-11]. The SGP Metal Advance, however, was a cell phone skin, a decorative sticker for the front of a phone. PSOF ¶¶ 26-28; [150-5]. It was not a cell phone case. In any event, this use of capsule merely described one of the designs in which the sticker was available-specifically, the option to have the sticker in a gold or nickel color with a pattern of repeating medicine capsules. See [124-11, 149-26]. Thus, capsule as Defendant used it in 2009 described a decorative pattern by naming the objects in the pattern, and was not a product identifier. It has little relevance here.
Thus, the disputed products consist of Plaintiffs Capsule cell phone cases and Defendants Capsule family cases. Both parties sell their Capsule cases online, through their websites and online retailers. PSOF ¶ 14; [1-6]; [124-28]; [124-34]. Both have a national market. PSOF ¶¶ 13, 14. Both parties use the trademarked term alone and in conjunction with the word case. [149-11]; [149-19]; [124-12]; [124-28]; R. DSOF ¶ 20; DSAF ¶ 4. Defendant, as noted, also uses the term with other descriptors, and has trademarked at least one of the resulting phrases. See [124-4]; DSAF ¶ 6. The Capsule marks for which Defendant has sought or is seeking registration have first-use dates no earlier than February 2015. DSAF ¶ 6. Defendant briefly ceased selling its Capsule family cases during the pendency of this litigation but has resumed its sales. PSOF ¶ 38.
Although both parties currently sell Capsule cases, Plaintiff does not sell its Capsule models for iPhones after the 5/5s generation, with the exception of the iPhone SE. PSOF ¶ 5; R. DSOF ¶¶ 43, 44. The trademarked Capsule models are limited to cases for the iPhone 5/5s, iPhone SE, iPhone 4/4s, and the fourth generation iPod Touch. R. DSOF ¶ 43. Plaintiffs cases for these goods can be customized by consumers or bought with ready-made prints. Id. Plaintiff did not produce Capsule cases for later generations because it was more difficult to print customized designs-generally supplied by consumers-on the cases that fit those generations. R. DSOF ¶ 44. Defendants challenged cases, by contrast, are not customizable, and appear to be sold primarily in solid colors. DSOF ¶ 50; see also [149-19] (Capsule products on Defendants website). Also, Defendant sells Capsule family cases for phones other than the iPhone, such as the Samsung Galaxy, see [149-19], while Plaintiffs Capsule models only fit iPhones, see PSOF ¶ 5; R. DSOF ¶¶ 43, 44; [124-2, 124-12, 124-23]. Plaintiff admits that it has no evidence of actual confusion between its Capsule cases and Defendants cases. R. DSOF ¶ 52.
In December 2015, Plaintiff sued Defendant for federal trademark infringement under 15 U.S.C. § 1114(a) ; unfair competition and false designation of origin under 15 U.S.C. § 1125(a) ; and Illinois common law unfair competition. [1]. Defendant asserted a counterclaim and numerous affirmative defenses. [31, 47]. Defendant later voluntarily dismissed Counts I and VI of its counterclaim, and this Court dismissed Counts II and V. [54, 61]. Thus, Defendants remaining counterclaims are Counts III and IV, seeking cancellation of Plaintiffs mark for genericness and descriptiveness, respectively. [47].
The parties engaged in extensive discovery in the course of this litigation, and each consulted experts. In December 2016, Defendant disclosed its experts to Plaintiff. [183-2, 183-5]. It listed Doug Bania as an expert who may be called to testify regarding the lack of consumer confusion as to the parties marks; whether Plaintiffs mark is descriptive and has acquired distinctiveness; and damages calculations. [183-5]. Defendant noted that Bania would provide a formal report. Id. Defendants designation of experts also listed Kirk Martensen as a non-testifying expert who will conduct a consumer survey to provide evidence of consumer perspectives on the Capsule mark and the parties. Id. Defendant noted Martensens association with Goldmarks-his survey firm-and said that although no formal report was forthcoming, Martensen might be called to testify on the methodology of the survey if needed. Id. Upon Plaintiffs request, Defendant provided a two-page summary of Martensens credentials that same month. [157-18, 157-20]. Defendant sent Plaintiff a copy of the survey report, including information about its methodology and findings, with Defendants expert disclosures. See [124-19] at 3-5, 15-24; [180-1] ¶ 2. Although Plaintiff never sought to depose Martensen, it asked Bania about Martensen and his methodology in a January 2017 deposition. [180-1] ¶ 9; [180-6]. In response, Bania admitted that he is not a survey expert but said that he accepted the reliability of the survey report, in part because it aligned with his own research. See [183-6] at 2.
In January 2017, this Court extended the initial expert discovery cut-off from February 2017 to March 14, 2017. [102]. On March 13, after Plaintiffs expert rebuttal report had been submitted and a day before the close of expert discovery, Bania submitted a Supplemental Expert Report. [104-3]. Ultimately, this Court again extended expert discovery until June 1, 2017. [114].
The parties cross-filed for summary judgment in June 2017. [123, 147]. Defendant included Banias expert report and Martensens consumer survey as exhibits in support of its motion. [124-9, 124-19]. In response, Plaintiff challenged the admissibility of the consumer survey. See R. DSOF ¶ 28; [158] at 8. As a result, Defendant submitted a sworn declaration from Martensen in support of the consumer survey with its responses to Plaintiffs statement of additional facts. [171-8]. The affidavit described the work that Martensen and his firm Goldmarks conducted to produce the survey, and attested to the truth and validity of the consumer survey report previously disclosed to Plaintiff and submitted with Defendants motion for summary judgment. Id.
II. Legal Standard
Under Federal Rule of Civil Procedure 12(f), courts may strike a partys insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. Accordingly, courts grant motions to strike only in rare circumstances; they are generally disfavored for their dilatory effect and frequent use as a vehicle to make arguments beyond the page limits of the merits briefs. See Custom Vehicles, Inc. v. Forest River, Inc. , 464 F.3d 725, 726-27 (7th Cir. 2006). A motion to strike should succeed when it removes unnecessary clutter from the case, and thus expedites rather than delays resolution on the merits. Heller Fin., Inc. v. Midwhey Powder Co., Inc. , 883 F.2d 1286, 1294 (7th Cir. 1989).
A motion for summary judgment can be granted only when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A genuine dispute of material fact exists where the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The party seeking summary judgment has the burden of establishing that there is no genuine dispute as to any material fact. See Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The motion will be granted only if, viewing the record in the light most favorable to the nonmoving party, no jury could reasonably find in the nonmoving partys favor. McDonald v. Hardy , 821 F.3d 882, 888 (7th Cir. 2016). The mere existence of a factual dispute, however, does not bar summary judgment unless the disputed fact is outcome determinative under governing law. Howland v. Kilquist , 833 F.2d 639, 642 (7th Cir. 1987). Summary judgment is also appropriate if the nonmoving party fails to establish an essential element for which it bears the burden of proof at trial. Massey v. Johnson , 457 F.3d 711, 716 (7th Cir. 2006).
III. Analysis
A. Evidentiary Disputes
Both parties bring numerous evidentiary challenges. These include Plaintiffs motion to strike Defendants expert report [104]; Defendants motion to strike Plaintiffs expert report [107]; Plaintiffs motion to strike Kirk Martensens affidavit [177]; and Defendants motion to withdraw four answers to Plaintiffs requests for admission [180]. Plaintiff also includes several related evidentiary arguments in its summary judgment briefing (and to the extent those arguments overlap with the listed motions, this Court addresses them with the related motion). This Court also addresses two of Plaintiffs arguments separately: Plaintiffs objections to Defendants consumer survey, [158] at 8, and to the affidavits submitted by defense counsel and one of Defendants employees, id. at 12-14.
Because parties may rely only on admissible evidence at summary judgment, Lewis v. CITGO Petroleum Corp. , 561 F.3d 698, 704 (7th Cir. 2009), this Court considers the evidentiary disputes before turning to the merits of the case.
1. Motions to Strike the Expert Reports
Both parties move to strike their opponents expert report and exclude the experts opinions. Plaintiff moves to strike Doug Banias supplemental expert report as untimely and improper, and to exclude his full report and testimony because he does not address issues in dispute and because he is not a qualified expert. [104] at 4, 6. Defendant seeks to exclude Chad Porters report and opinions because they are unreliable and conclusory. [107] at 3, 6, 8. Defendants motion is denied as moot, as explained below. This Court considers Plaintiffs motion next.
The admissibility of expert testimony is governed by Federal Rule of Evidence (FRE) 702 and the Supreme Courts decision in Daubert v. Merrell Dow Pharm., Inc. , 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Expert testimony is admissible under FRE 702 if technical or specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue. Essentially, district courts act as gatekeepers and must ensure that expert testimony is not only relevant, but reliable. Kumho Tire Co. v. Carmichael , 526 U.S. 137, 147, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999) (internal quotation marks omitted). Relevant factors in this determination include testing, peer review, error rates, and acceptance by the relevant expert community. See Daubert , 509 U.S. at 593-94, 113 S.Ct. 2786. The reliability inquiry is flexible, however, and not all of these factors will apply in every case. See Kumho , 526 U.S. at 141, 119 S.Ct. 1167.
In assessing the admissibility of expert opinions, courts do not focus on the ultimate correctness of the experts conclusions, Schultz v. Akzo Nobel Paints, LLC , 721 F.3d 426, 431 (7th Cir. 2013), but solely on principles and methodology, Daubert , 509 U.S. at 595, 113 S.Ct. 2786. The soundness of the factual underpinnings and correctness of the experts conclusions may affect any ultimate determination on the merits, but do not govern admissibility. See Smith v. Ford Motor Co. , 215 F.3d 713, 718-19 (7th Cir. 2000). The expert must explain his or her methodology and cannot simply assert a bottom line. Metavante Corp. v. Emigrant Sav. Bank , 619 F.3d 748, 761 (7th Cir. 2010). Finally, the expert may be qualified by knowledge, skill, experience, training, or education. See Smith , 215 F.3d at 718 (internal quotation marks omitted). District courts have great latitude in determining not only how to measure the reliability of the proposed expert testimony but also whether the testimony is, in fact, reliable. United States v. Pansier , 576 F.3d 726, 737 (7th Cir. 2009).
(i) Banias Supplemental Report
Defendant engaged Bania to provide information and expert opinions on the parties use of the Capsule trademark; the purpose and functionality of trademarks; and potential damages. [124-8] at 3. In addition to his initial expert report from December 2016, [124-8], Bania submitted a Supplemental Expert Report in March 2017, [104-3]. Plaintiff objects to the primary expert report as unreliable and irrelevant, and to the supplemental report for failure to comply with Federal Rule of Civil Procedure (FRCP) 26. This Court addresses the supplemental report first.
Under FRCP 26(e), parties must timely supplement their expert disclosures to remedy an incomplete or incorrect disclosure. See Fed. R. Civ. P. 26(e)(1-2) ; Vill. of Sauk Vill. v. Roadway Express , No. 15-cv-9183, 2017 WL 378424, at *2 (N.D. Ill. Jan. 25, 2017). Supplementary reports cannot offer entirely new expert opinions; rather, they should clarify or expand upon information in the experts original report or information given during the experts deposition. Id. (internal quotation marks omitted); see also Fed. R. Civ. P. 26(e)(2). The supplementary report may be intended in part to rebut an opposing partys expert. Sauk Vill. , 2017 WL 378424, at *2 ; Bone Care Intl, LLC v. Pentech Pharm., Inc. , No. 08-cv-1083, 2010 WL 3894444, at *15 (N.D. Ill. Sept. 30, 2010). If offered in rebuttal, certain new arguments may be made to repel testimony of the opposing partys experts, as long as they do not differ so substantially from the opening report that they introduce entirely new theories or angles. Bone Care , 2010 WL 3894444, at *16. Finally, failure to comply with FRCP 26 may be excused under FRCP 37(c) if that failure is substantially justified or harmless.
For purposes of summary judgment, this Court finds that Banias supplemental report sufficiently adheres to the scope of his initial report and to permissible rebuttal that it need not be stricken. The first half of the supplemental report corrects the scope of Banias previous damages calculations but does not alter his underlying methodology. See [104-3] at 2-4. The second half rebuts Plaintiffs expert, but similarly confines itself to the calculation of damages, focusing on the issue of Spigens costs as they relate to damages. See id. at 5-6. Bania previously addressed Spigens costs in his initial report, [124-8] at 14-15, and here merely applies his analysis to Plaintiffs expert report. Such limited rebuttal does not open up new areas of the case or prejudice Plaintiffs ability to prepare for trial. Cf. Stuhlmacher v. Home Depot USA, Inc. , No. 2:10-cv-467, 2012 WL 5866297, at *3 (N.D. Ind. Nov. 19, 2012). Rather, it supplements Banias original report, partly in response to Plaintiffs expert material. See Sauk Vill. , 2017 WL 378424, at *2.
Even if the supplementary report failed to strictly comply with Rule 26, this Court also finds any such failure harmless and thus excused under Rule 37. Not only was the supplementary report provided to Plaintiff before the initial close of expert discovery (albeit on the last day) [102], this Court then extended the close of expert discovery another two and a half months, [144], largely to give Plaintiff time to address the supplementary report, as stated in open court. Finally, Defendants production of the supplement does not venture into new territory, minimizing any potential prejudice to Plaintiff. See Bone Care , 2010 WL 3894444, at *16. This Court denies Plaintiffs motion to strike Banias supplementary report.
(ii) Banias Initial Report
Plaintiff challenges Banias qualifications and the relevance and reliability of his expert opinion overall, and seeks exclusion of his initial report and testimony at trial. [104] at 6; [148] at 25; [158] at 11. Plaintiff also challenges the reliability and admissibility of the consumer survey on which Bania relied for some of his opinions. See [148] at 14; [158] at 8-10. This Court first considers Plaintiffs primary challenges to Banias report before turning to the consumer survey.
Plaintiffs objections to Banias report rest solely upon a challenge to Banias qualifications and methodology with respect to calculating damages. See [104] at 8-16; [148] at 25. For the reasons explained below, this Court does not reach the question of damages because it finds that Defendant did not infringe on Plaintiffs mark. Plaintiffs motion to strike Banias report is, therefore, denied as moot.
As noted above, however, Banias opinions extend beyond the issue of damages. His report also addresses the interaction of the parties products in the marketplace. See [124-8] at 3, 13. Among other conclusions, Bania states that: (1) the parties
products are dissimilar; (2) a number of cell phone case suppliers use the term Capsule in the names of their cases; (3) consumers do not identify the Capsule mark with Uncommon; and (4) Defendants use of Capsule likely did not interfere with Plaintiffs business. Id. at 7-12, 13. These opinions relate to Plaintiffs infringement claims and Defendants counterclaim for cancellation of Plaintiffs mark for descriptiveness. Thus, the admissibility of his report remains relevant.
Considering the principles and methodology that Bania used, Daubert , 509 U.S. at 595, 113 S.Ct. 2786, and his knowledge, skill, experience, training, and education, Smith , 215 F.3d at 718 (internal quotation marks omitted), this Court finds Banias expert opinion admissible. Banias qualifications include his professional experience as the founder of a consulting firm specializing in the management, valuation and monetization of intellectual property (IP); over a decade of work in IP management; his certification as a licensing professional in 2011; his membership in various trademark and licensing associations, as well as the American Bar Associations IP Law section; and a decades worth of publications on copyright use, brand valuation, infringement claims, and other IP topics. See [124-9] at 25-30.
The methodology underpinning Banias assessment of the parties products and marks is not terribly complicated, but the questions he was asked to answer do not necessarily call for complexity. Because this case turns primarily on consumer perception of the parties products and marks, Bania conducted a variety of internet searches to examine how the products and marks appear to consumers. Id. at 4-12. Bania then applied his knowledge and expertise to the results of those searches- which he conducted after wiping his internet search history to remove bias-and to Martensens consumer survey report to arrive at his conclusions. Id. at 13, 18. This is a reasonable method for determining consumer perceptions. See Ty, Inc. v. Publns Intl, Ltd. , No. 99-c-5565, 2004 WL 5634301, at *7 (N.D. Ill. Oct. 21, 2004) (finding that an experts reliance upon his experience and relevant studies offered a rational basis for his conclusions on consumer motivations) (citing Sheldon v. Metro-Goldwyn Pictures Corp. , 309 U.S. 390, 408, 60 S.Ct. 681, 84 L.Ed. 825 (1940) ); see also Sands, Taylor & Wood Co. v. Quaker Oats Co. , 978 F.2d 947, 952 n.6 (7th Cir. 1992) (qualified experts opinion on consumer understanding of trademarked term created genuine issue of material fact as to the marks descriptiveness).
For the foregoing reasons, this Court will not strike Banias expert report or exclude his opinions. But to the extent that some of those opinions rely upon the consumer survey, those portions of his report and opinions are only admissible if the survey itself is reliable and admissible, as discussed next.
2. Martensens Declaration
To determine the admissibility of the consumer survey-independently and as support for Banias conclusions-this Court must first determine the admissibility of Martensens declaration. For the reasons explained in this section, the consumer survey cannot be admitted unless it is introduced by the expert who conducted it. Although experts like Bania may generally rely upon studies conducted by other experts in forming their opinions, see Fed. R. Evid. 703, this is not the case when such studies involve discretionary expertise that the testifying expert lacks, see Dura Auto. Sys. of Ind. v. CTS Corp. , 285 F.3d 609, 614 (7th Cir. 2002). As explained below, because Bania admits that he is not a survey expert, and because the consumer survey offered here involves discretion, the survey requires Martensens testimony to be admissible at trial and his sworn support to be considered at summary judgment. Thus, this Court next considers Plaintiffs motion to strike Martensens affidavit. [177].
Defendant submitted Martensens affidavit with its responses to Plaintiffs statement of additional facts; it attests to the validity of the consumer survey conducted by Martensens firm. [171-8]. Plaintiff objects to Martensens declaration on three grounds: (1) Martensen cannot submit a testimonial affidavit because Defendant designated him as a nontestifying expert; (2) if Martensen is a testifying expert, Defendant failed to provide the expert report required by Rule 26 ; and (3) Plaintiff suffered harm from this undisclosed use of Martensens testimony. [177] at 2, 5. Plaintiff therefore seeks to strike Martensens affidavit and bar his opinions and testimony from consideration now and at trial. Id. at 1.
Because this Court finds no basis to exclude Martensens declaration, and because Defendants failure to adhere precisely to the letter of Rule 26 was harmless, the motion to strike Martensens declaration is denied. Since Martensens declaration constitutes the requisite support for the admission of Defendants consumer survey, this Court sets out in detail the reason for this ruling.
Plaintiffs first argues that as a designated nontestifying expert, Martensen cannot offer any testimonial evidence, including a sworn declaration. [177] at 2. Plaintiffs sole support for this exclusionary rule is Dura , 285 F.3d 609. But Dura requires no such thing.
In Dura , the plaintiffs sole named expert admitted in depositions that his analysis relied upon mathematical models that he lacked the expertise to evaluate. Id. at 611-12. The defendants used that admission to challenge the inclusion of the experts testimony, and the plaintiffs responded with affidavits from the employees at the experts firm who created the models, attesting to their validity. Id. at 612. Defendants moved to strike those affidavits as untimely, arguing that the employees constituted new expert witnesses that the plaintiffs failed to disclose before the courts deadline. Id. The district court granted the motion to strike, and, because the original experts testimony lacked sufficient reliability absent those affidavits, the court barred him from testifying as well. Id.
The Seventh Circuit affirmed, holding that the district court did not abuse its discretion in excluding the plaintiffs expert. Id. at 616. The mathematical modeling involved such specialized, discretionary expertise that it could not be summarily relied upon by someone lacking that expertise, and required its own expert support. Id. at 615. In so ruling, the Seventh Circuit did not reject the clear meaning of FRE 703, which allows an expert to base an opinion in part on what a different expert believes on the basis of expert knowledge not possessed by the first expert, without imposing any general requirement that the other expert testify as well. Id. at 613. The Seventh Circuit was concerned, however, with a situation in which the soundness of the underlying expert judgment is in issue, and held that where an underlying study is not cut and dried but involves professional discretion, the person who produced the study must testify to its adequacy, id. at 613-14.
The models at issue in Dura were sufficiently discretionary to require testimony from their creators. Id. Since the employees who wrote them were not previously identified, but were necessary to establish the validity of the study, the district court reasonably treated them as previously undisclosed experts, whose new reports as to their models were untimely.
Id. at 612, 615. Had the mathematical models not required adaptations involving a host of discretionary expert judgments, but instead been a matter of routine, the outcome would have been different. Id. at 615.
Finally, the Seventh Circuit held that the district court reasonably found that the plaintiffs untimely filing of additional expert reports was harmful and unjustified, so their failure to comply with Rule 26s disclosure requirements did not fall into Rule 37s safe harbor for substantially justified or harmless failures to disclose. Id. at 616 ; Fed. R. Civ. P. 37(c)(1). The plaintiffs should have known that the modeling was beyond their original experts expertise; discovery had closed by the time the employees were finally named in the suit; and the withholding of the employees names may have been strategic. Dura , 285 F.3d at 616.
As should be clear from this discussion, Dura affects Banias ability to offer opinions based upon the consumer survey absent supporting testimony from Martensen, who created the survey. Dura does not, however, demand that Martensens declaration be excluded. The Seventh Circuit affirmed the district courts exclusion of the supplementary affidavits because: (1) the district court reasonably treated the newly revealed employees affidavits as untimely experts reports; and (2) the district court reasonably found the late disclosure harmful. Id. at 612-13, 616. Thus, this Court must determine whether Martensens declaration constitutes an expert report, and if so, whether its untimely production was harmful or unjustified.
On the first point, consumer surveys involve sufficiently discretionary expertise that they require the testimonial support of someone with expertise in that field. See Spraying Sys. Co. v. Delavan, Inc. , 975 F.2d 387, 394 (7th Cir. 1992) (discussing potential bias and discretionary choices in conducting consumer surveys); Simon Property Grp. L.P. v. mySimon, Inc. , 104 F.Supp.2d 1033, 1039 (S.D. Ind. 2000) (Consumer survey results must be presented through expert witnesses.). Bania has admitted that he is not a survey expert and has not conducted a lot of surveys. [183-6] at 2. Thus, the survey requires Martensens testimony to support its admission. But the need for Martensens testimony does not necessarily mean that his affidavit constitutes an untimely expert report.
Defendants situation is similar to that of the plaintiffs in Dura in one key respect: both erroneously assumed that their experts could permissibly rely upon anothers expertise, according to the general rule of FRE 703. Here, as in Dura , Defendant should have planned to have the original expert testify, and that expert should have provided a formal report as required by FRCP 26(a)(2)(B). But Defendant never provided such a report and it seems that Martensens affidavit was not intended to be one: in large part it merely restates the summary of findings disclosed to Plaintiff in December 2016. Compare [171-8] ¶¶ 1, 3, 4, 5-8, 10, 11, with [124-19] at 3-5, 15-24. Unlike the affidavits in Dura , Martensens affidavit bolsters previously provided information by including it in a sworn statement rather than merely offering it as an unsworn attachment; it does not significantly expand the record on the surveys methodology. Indeed, Defendant continues to argue that Martensen need not provide an expert report because of his designation as a nontestifying expert. [183] at 2.
In these circumstances, the affidavit does not constitute an expert report. It is, however, a testimonial statement from a witness who was (erroneously) designated a nontestifying expert. Contrary to Plaintiffs contention, there is no rule barring such statements from nontestifying experts. Dura did not address this issue, and the few cases to do so have not held that the statement is barred, but rather that the privilege normally accorded to nontestifying experts under FRCP 26(b)(4)(D) is waived. See Positive Techs., Inc. v. Sony Elecs., Inc. , No. 11-CV-2226 SI (KAW), 2013 WL 1402337, at *2 (N.D. Cal. Apr. 5, 2013) ; W. Res., Inc. v. Union Pac. R.R. Co. , No. 00-2043-CM, 2002 WL 181494, at *8, 10 (D. Kan. Jan. 31, 2002) ; Douglas v. Univ. Hosp. , 150 F.R.D. 165, 168 (E.D. Mo. 1993). Thus, were Martensen properly considered a nontestifying expert, he would have opened himself up to discovery by submitting the affidavit. But the parties do not address the rescission of Martensens privilege; the question they pose is whether any rule bars Martensens affidavit, and this Court finds none.
Instead, the situation is this: Defendant erroneously designated Martensen as a nontestifying expert when, in fact, it needs his testimony to introduce the consumer survey report. Because Martensen must testify, but Defendant never provided an expert report regarding his testimony, Defendant failed to comply with FRCP 26. Thus, the final question is whether Rule 37 excuses that failure.
Rule 37(c)(1) provides that where a party fails to provide information about a witness as required by Rule 26, courts should exclude that information and witness from consideration unless the failure was substantially justified or is harmless. Whether a failure to comply with Rule 26(a) may be excused under Rule 37 is left to the broad discretion of the district court, Dynegy Mktg. & Trade v. Multiut Corp. , 648 F.3d 506, 514 (7th Cir. 2011), which may tailor any sanctions to the omission, see Salgado by Salgado v. Gen. Motors Corp. , 150 F.3d 735, 741 n.6 (7th Cir. 1998). When applying Rule 37, courts consider: (1) the prejudice or surprise to the party against whom the evidence is offered; (2) the ability of the party to cure the prejudice; (3) the likelihood of disruption to the trial; and (4) the bad faith or willfulness involved in not disclosing the evidence at an earlier date. David v. Caterpillar, Inc. , 324 F.3d 851, 857 (7th Cir. 2003).
Here, Defendants failure to provide an expert report was harmless, mainly because Defendant made substantial, timely disclosures about both Martensen and the survey. Defendant included Martensen in its expert disclosure to Plaintiff in December 2016, stating that he would conduct a consumer survey that would inform Banias opinions, and noting that although Martensen was considered a nontestifying expert, he might be called to testify on the methodology of the survey if needed. See [183-5] at 2-3; [183-2]. Although this statement should have signaled to Defendant that Martensen needed to produce an expert report, it still gave Plaintiff clear notice of Martensens potential testimony well before the close of expert discovery, let alone trial. See [114]. Moreover, Defendant included substantial detail about the surveys design and methodology in the findings report disclosed to Plaintiff in December 2016. See [124-19] at 3-5, 15-24. Finally, although Defendant did not provide as detailed a resume for Martensen as for Bania, Defendant gave Plaintiff a two-page summary of his credentials at that time. See [157-18] (indicating receipt by December 7, 2016); [157-20].
In light of these disclosures, this Court finds no likelihood of surprise to Plaintiff as to the nature or substance of Martensens testimony, or of the consumer survey. This minimizes the prejudice to Plaintiff, who, in any event, had ample opportunity to depose Martensen and did not do so. Designating Martensen a nontestifying expert did not shield him from discovery: where a nontestifying experts report forms the basis for an experts opinion, the nontestifying expert may be deposed. See Fed. R. Civ. P. 26(a)(2)(B)(ii), (b)(4)(A) ; Estate of Manship v. United States , 240 F.R.D. 229, 238 (M.D. La. 2006) ; Herman v. Marine Midland Bank , 207 F.R.D. 26, 30-32 (W.D.N.Y. 2002) ; Derrickson v. Circuit City Stores, Inc. , No. DKC 95-3296, 1999 WL 1456538, at *7 (D. Md. Mar. 19, 1999), affd on other grounds sub nom. Johnson et al. v. Circuit City Stores , 203 F.3d 821 (4th Cir. 2000) ; Hartford Fire Ins. Co. v. Pure Air on the Lake Ltd. , 154 F.R.D. 202, 208 (N.D. Ind. 1993) ; Eliasen v. Hamilton , 111 F.R.D. 396, 401 (N.D. Ill. 1986) (discovery into nontestifying experts permissible where the party seeking discovery is unable to obtain equivalent information from other sources). Ample warning and failure to seek additional information supports the application of Rule 37s safe harbor. See David , 324 F.3d at 857.
Finally, this Court cannot conclude that Defendant acted in bad faith given the spectrum of discretionary expertise that Dura and FRE 703 create-on one end, routine studies and surveys may be relied upon by testifying experts; on the other, discretionary surveys must be supported by testimony from their creators. Dura , 285 F.3d at 615. Defendant misread the spectrum, but still provided sufficient information so that no tactic of surprise could have affected the outcome of the case. Sherrod v. Lingle , 223 F.3d 605, 613 (7th Cir. 2000).
Under such circumstances, Defendants failure to strictly comply with Rule 26(a)s expert report requirement as to Martensen was harmless. Moreover, submitting Martensens affidavit did not harm Plaintiff because the affidavit primarily restated information that Defendant had previously disclosed. This Court declines to strike Martensens affidavit, or exclude his statements and testimony.
Because Martensens affidavit and testimony are admissible, this Court will also admit the consumer survey Martensen produced, provided it is sufficiently reliable and complies with the principles of professional survey research. Evory v. RJM Acquisitions Funding LLC , 505 F.3d 769, 776 (7th Cir. 2007).
3. The Consumer Survey
Plaintiff seeks to exclude the consumer survey that Martensen produced and Bania relied upon because no expert has opined regarding the methodology employed. [148] at 14. As discussed above, however, the survey findings disclosed to Plaintiff in December 2016 contained significant information on the methodology of the survey. [124-19]. Martensens affidavit, which this Court has admitted, provides sworn support for that information. [171-8]. No categorical bar prevents admitting the consumer survey under these circumstances, nor does Plaintiff point to any. Rather, the admissibility of the survey turns on its reliability, which this Court will now consider.
The Seventh Circuit has said that for a consumer survey to be admissible, it must comply with the principles of professional survey research, Evory , 505 F.3d at 776, and should not rely upon leading or suggestive questions, Muha v. Encore Receivable Mgmt., Inc. , 558 F.3d 623, 625-26 (7th Cir. 2009). A reliable survey must replicate market conditions and remain free of bias. Spraying Sys. , 975 F.2d at 396. Courts in this district have supplemented those general principles by considering factors drawn from cases cited with approval by the Seventh Circuit, including: whether (1) the universe was properly defined, (2) a representative sample of that universe was selected, (3) the questions to be asked of interviewees were framed in a clear, precise and nonleading manner, (4) sound interview procedures were followed by competent interviewers who had no knowledge of the litigation or the purpose for which the survey was conducted, (5) the data gathered was accurately reported, (6) the data was analyzed in accordance with accepted statistical principles and (7) the objectivity of the entire process was ensured. Dyson, Inc. v. Bissell Homecare, Inc. , 951 F.Supp.2d 1009, 1017 (N.D. Ill. 2013). Courts rarely exclude consumer surveys from evidence, since most shortcomings go to the proper weight of the survey rather than admissibility. AHP Subsidiary Holding Co. v. Stuart Hale, Co. , 1 F.3d 611, 618 (7th Cir. 1993).
(i) The Universe and Sampled Population
Selecting the right universe of respondents significantly affects the probative value of a consumer survey. See Spraying Sys. , 975 F.2d at 394 n.5. An erroneous or undefined universe diminishes the surveys reliability. Competitive Edge, Inc. v. Staples, Inc. , 763 F.Supp.2d 997, 1008 (N.D. Ill. 2010). Once the universe is defined, a sample population must be selected that accurately represents the universe. Id.
Here, the survey report identifies its universe as consumers of cell phones and cell phone cases who do not work for a cell phone or cell phone accessory business, or a marketing agency, research or media company. [124-19] at 3. This is a relevant universe to this case, which turns on the perceptions of consumers of cell phone cases. The report notes that the sample was selected by Precision Sample, LLC, a leading provider of respondents for consumer surveys. Id. While this does not give the Court much information to independently evaluate the sampling, the use of a qualified third-party sampler could increase the impartiality of the survey. Moreover, in the context of the consumer universe for this case, any random sampling of cell phone case consumers is likely to be as reliable as any other, since cell phone cases have a broad, national market that crosses most demographic boundaries. Cf. Competitive Edge , 763 F.Supp.2d at 1008 (considering only college students in consumer survey of calculator consumers was underinclusive); see also Bobak Sausage Co. v. A & J Seven Bridges, Inc. , No. 07-C-4718, 2010 WL 1687883, at *6 (N.D. Ill. Apr. 26, 2010) (questions narrowing respondents to likely consumers helped create an appropriate universe). The universe of respondents is therefore sufficiently reliable.
(ii) The Questions
The next factor asks whether the questions given to survey respondents were clear, precise, and nonleading. Dyson , 951 F.Supp.2d at 1017. The questions used in this survey satisfied these conditions. See [124-19] at 15-23. The phrasing is unambiguous, see, e.g. , id. at 16 (Can you recall the brand name of the case of your primary cell phone?), and the questions allow consumers a range of response options where appropriate, rather than forcing yes or no answers, see id. at 18; Competitive Edge , 763 F.Supp.2d at 1008-09. Nor are the questions biased or leading: the survey randomized answers in multiple choice questions and did not unduly emphasize either partys brand name, mark, or product. See [124-19] at 19-20; cf. Bobak Sausage , 2010 WL 1687883, at *6 (survey improperly suggested answers by emphasizing certain choices).
Finally, the questions are reasonably designed to identify consumer perceptions of the term Capsule in relation to cell phone cases, which is relevant to the strength and protectability of Plaintiffs mark, as discussed below. The fact that the survey does not appear to have included images of the products somewhat weakens its value, given the relevance of the marks appearance to consumer confusion, but does not seriously undermine it since the Capsule mark has no particular visual content. Rather, both parties merely use similar, sans-serif fonts. See [149-11]; [149-18]; [149-19]; [124-12]. And, since the survey provides evidence as to whether Capsule achieved a secondary meaning with consumers-which requires that consumers identify the trademark as the name of the product, Packman v. Chi. Tribune Co. , 267 F.3d 628, 639 (7th Cir. 2001) -presenting Capsule with minimal context is a valuable measure of its stature in the market.
Thus, the questions are sufficiently reliable to support admission of the survey. See McGraw-Edison Co. v. Walt Disney Prods. , 787 F.2d 1163, 1172 (7th Cir. 1986) (The manner of presentation to the interviewee goes to the weight to be accorded to the survey results rather than providing a reason to ignore the survey evidence altogether.).
(iii) Interview Procedures
This factor addresses whether the interviewers followed professionally sound procedures so as to minimize the potential for procedural bias. See Dyson , 951 F.Supp.2d at 1017. This Court has little information on this point, other than the fact that Goldmarks conducted the survey online through the third-party platform SurveyMonkey, [124-19] at 4, and complied with the general principles of professional survey research, per Martensens sworn statement, [171-8] ¶ 5. Despite the meagerness of the record on this point, it is difficult to see how an online survey suffers the risk of bias presented by human interviewers, which is what this factor seeks to identify. Here, this Court will not exclude the survey for lack of further information when the available information offers no reason to doubt the surveys impartiality. See Bobak Sausage , 2010 WL 1687883, at *8 (admitting consumer survey even though sparse record raised some doubts as to its design).
(iv) Accurate and Objective Data
The record shows the same flaws in this factor as in the previous one. Little information exists about the surveys method of calculating and reporting data, other than that the information collected through SurveyMonkey was converted into percentages, see [124-19] at 4, 6-13, and was accurately gathered and reported, according to Martensen, [171-8] at 6. Again, however, the format and approach of the survey is relatively simple and this Court has no reason to doubt the effectiveness of this no-frills approach, which does not appear to have required sophisticated algorithms or data coding. See Bobak Sausage , 2010 WL 1687883, at *8 ; cf. Dyson , 951 F.Supp.2d at 1020 (scrutinizing coding undertaken by human coders subject to bias).
(v) Summary
In sum, this Court finds that Defendants consumer survey is not so flawed as to be completely unhelpful to the trier of fact and therefore inadmissible. Stuart Hale, Co. , 1 F.3d at 618. Rather, its shortcomings go to the weight to be accorded to the survey results rather than providing a reason to ignore the survey altogether. Id. (quoting McGraw-Edison Co. , 787 F.2d at 1171-73 ).
4. Defendants Additional Affidavits
Plaintiff next challenges affidavits submitted by defense counsel [124-57], and Defendants manager Sang Jun [124-59], for lack of personal knowledge, [158] at 12-14. FRCP 56(c)(4) requires that affidavits made in support of a motion for summary judgment be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant is competent to testify on the matters stated. Personal knowledge includes inferences and opinions, but these must be grounded in observation or other first-hand personal experience. Visser v. Packer Engg Assoc., Inc. , 924 F.2d 655, 659 (7th Cir. 1991) ; see also EEOC v. Admiral Maint. Serv., L.P. , 174 F.R.D. 643, 647 (N.D. Ill. 1997). Mere speculation about matters remote from that experience fails to conform to the rule. Visser , 924 F.2d at 659.
With respect to the affidavit from defense counsel [124-57], Plaintiff specifically challenges paragraphs 9 and 55, describing defense counsels web search for the parties Capsule products and Plaintiffs failure to use the ® designation with its mark on certain of those products. [158] at 13. There is no paragraph 55 in this affidavit, but this Court understands Plaintiff to object to paragraph 4, which addresses Plaintiffs use of the ® designation. See [124-57] ¶ 4. Paragraph four relates to counsels observation of an image of Plaintiffs product, contained in the record, which is a permissible inference based upon personal observation. See Admiral Maint. , 174 F.R.D. at 648. Paragraph nine describes counsels search for Plaintiffs products on Amazon.com in May 2017, and attests that the search results included as Exhibit 22 [124-23] are true and correct copies of his search results. [124-57] ¶ 9. This is the definition of personal knowledge, since counsel himself conducted the search. This Court declines to strike paragraphs four and nine of defense counsels affidavit.
With respect to Sang Juns affidavit, this Court finds that one of Juns statements is not clearly the result of personal knowledge, and Defendant has therefore failed to that Jun is competent to testify on the matters stated. Fed. R. Civ. P. 56(c)(4). Although it may sometimes be inferred that the affiant had knowledge of certain events based upon his position within an organization and involvement in relevant circumstances, Ladenberger v. Gen. Signal Pump Grp./Aurora Pump , No. 00-c-4054, 2001 WL 586497, at *1 (N.D. Ill. May 31, 2001) (citing Barthelemy v. Air Lines Pilots Assn , 897 F.2d 999, 1018 (9th Cir. 1990) ), this is not the case with paragraph eight of Juns affidavit. Although Jun is Defendants Manager of General Affairs and oversees day to day operations, [124-59] ¶ 1, this does not explain how he knows that Spigen has developed a reputation for high quality and minimalist design, id. ¶ 5. Although this statement cites Defendants expert report, it must more clearly point to the source of this knowledge or at least indicate that Jun examined the report.
With respect to paragraph 10 of Juns affidavit, it is clear that Jun concluded that the term capsule is used by other cell phone case manufacturers based upon his review of Defense Exhibit 9 [124-10], showing capsule-labeled cell phone cases sold by third parties. As noted, inferences from matters in the record are permissible under Rule 56. See Admiral Maint. , 174 F.R.D. at 648. The remainder of Juns statements relate to Spigens ordinary business practices and this Court infers that they draw upon his personal knowledge as Spigens manager. See Ladenberger , 2001 WL 586497, at *1. This Court therefore strikes paragraph eight of Juns affidavit, but admits the remaining statements.
5. Defendants Motion to Withdraw Answers
Defendant seeks to withdraw its answers to numbers 18, 23, 24, and 47 of Plaintiffs requests for admission (RFAs). [180]. FRCP 36(b) gives district courts discretion to permit withdrawal or amendment if it would promote the presentation of the merits of the action and if the court is not persuaded that it would prejudice the requesting party. The party seeking to withdraw its admissions must show good cause. Howard v. Sheahan , 546 F.Supp.2d 566, 568 (N.D. Ill. 2008). Even if these prerequisites are met, courts may refuse to permit withdrawal. See United States v. Kasuboski , 834 F.2d 1345, 1350 n.7 (7th Cir. 1987) (Admissions may be withdrawn under Rule 36(b)if certain conditions are met and the district court, in its discretion, permits the withdrawal.).
This Court grants Defendants request to withdraw its response to RFA 18. RFA 18 asked Defendant to admit that the term CAPSULE as used by Spigen and Uncommons CAPSULE mark are identical in appearance. [149-8] at 6. This Court first notes that this RFA is problematic because it essentially aims to establish the ultimate legal question. McNary v. Hamer , No. 14-cv-01897-WTL-TAB, 2016 WL 4140945, at *2 (S.D. Ind. Aug. 4, 2016). More importantly, Defendants response contains an erroneous denial, controverted by the evidence, that it used the trademarked term Capsule alone. See [149-8] at 7; R. PSOF ¶ 9; [149-11] at 2. Thus, the merits of the case are aided by the withdrawal of this denial. The withdrawal cannot prejudice Plaintiff, since Defendants use of capsule alone more closely resembles Plaintiffs mark, and thus favors Plaintiffs infringement claim.
This Court denies, however, Defendants request to withdraw its responses to RFAs 23, 24, and 47. In response to RFAs 23 and 24, Defendant admitted that its products were similar and/or identical to Plaintiffs. [149-8] at 10. Defendant now seeks to withdraw both admissions on the grounds that the distinct coloration and designs on the parties cell phone cases render the products distinct. [180] at 5-6. This is contrary to the law governing product similarity, which asks whether consumers are likely believe that a single source could produce both products, McGraw-Edison Co. , 787 F.2d at 1169, and if the products are competitive, see Knaack Mfg. Co. v. Rally Accessories, Inc. , 955 F.Supp. 991, 1000 (N.D. Ill. 1997). The decorative aspect of these cases affects neither inquiry. The parties cases could replace one another and are thus competitive, id. , and a single company could produce more than one kind of cell phone case. Thus, Defendants request for withdrawal relies upon a distinction unsupported by law.
In Defendants response to RFA 47, Defendant admitted that it does not appear SPIGEN used the term CAPSULE prior to Plaintiffs first use of the mark in December 16, 2009. [149-8] at 15. Now Defendant argues that its earlier use of capsule to describe a decorative pattern of medicine capsules on a cell phone sticker proves this admission false. [180] at 7. This Court has already discussed why the use of the cell phone sticker is largely irrelevant to the merits of this case. To the extent that it is relevant, Plaintiff would be prejudiced by its withdrawal at this late hour. Plaintiff cited this admission in its briefing, see, e.g. , [148] at 19, which represents detrimental reliance upon the admission, see Matthews v. Homecoming Fin. Network , No. 03-c-3115, 2006 WL 2088194, at *3 (N.D. Ill. July 20, 2006) (internal quotation marks omitted). Moreover, the fact that Defendant waited to amend its answer for over a year after it submitted its supplemental responses to Plaintiffs RFAs, see [180-2] at 19, and after the parties motions for summary judgment were fully briefed, strongly indicates unfair prejudice to Plaintiff, see Matthews , 2006 WL 2088194, at *3 ; Tidwell v. Daley , No. 00-c-1646, 2001 WL 1414229, at *1 (N.D. Ill. Nov. 8, 2001). If Defendant was able to supplement its responses to Plaintiffs interrogatories on this issue in 2016, [180-6], it could and should have moved to amend this answer at that time.
Having shown no cause for this delay, Defendants motion is denied as to RFA 47. See Howard , 546 F.Supp.2d at 568 ; Matthews , 2006 WL 2088194, at *3.
B. Validity of Plaintiffs Mark
Defendants two extant counterclaims seek the cancellation of Plaintiffs mark for genericness and descriptiveness, respectively. [47]. Courts classify marks into five categories of increasing distinctiveness: (i) generic; (ii) descriptive; (iii) suggestive; (iv) arbitrary; and (v) fanciful. Box Acquisitions, LLC v. Box Packaging Prods., LLC , 32 F.Supp.3d 927, 934 (N.D. Ill. 2014) (citing Platinum Home Mortg. Corp. v. Platinum Fin. Grp., Inc. , 149 F.3d 722, 727 (7th Cir. 1998) ). Generic terms receive no trademark protection, while a descriptive mark only receives trademark protection if it acquires secondary meaning in the collective consciousness of the relevant community. Platinum , 149 F.3d at 727 (internal quotation marks omitted). Terms in the other three categories receive protection automatically because they are inherently distinctive. Id. A district courts determination as to where a mark falls on the continuum between generic and arbitrary is often made on an intuitive basis rather than as the result of a logical analysis susceptible of articulation. Money Store v. Harriscorp Fin., Inc. , 689 F.2d 666, 674 (7th Cir. 1982).
Here, Defendant contends that Plaintiffs mark is either generic or descriptive, and should be canceled in either case because the mark lacks secondary meaning. [125] at 9-13. Plaintiff argues that it is entitled to the presumption that its mark is at least suggestive because the USPTO approved its registration. [148] at 8. Plaintiff is correct that registration entitles its mark to a presumption of validity. 15 U.S.C. § 115(a). But Defendant may overcome that presumption with evidence that the mark is generic or descriptive, or that it lacks secondary meaning. Packman , 267 F.3d at 639. Thus, Defendant bears the burden of demonstrating that the mark is either generic or descriptive, and, if descriptive, that it lacks secondary meaning. Id. ; see also Custom Vehicles, Inc. v. Forest River, Inc. , 476 F.3d 481, 485 (7th Cir. 2007) (registered mark presumed to have secondary meaning); Scandaglia v. Transunion Interactive, Inc. , No. 09-c-2121, 2010 WL 3526653, at *6 n.1 (N.D. Ill. Sept. 1, 2010) (party contesting the mark must show that the mark lacks secondary meaning).
Courts have the authority to cancel invalid marks. 15 U.S.C. § 1119. Indeed, in such circumstances cancellation is not merely appropriate, it is the best course. Cent. Mfg., Inc. v. Brett , 492 F.3d 876, 883 (7th Cir. 2007) ; see also Specht v. Google, Inc. , 747 F.3d 929, 936 (7th Cir. 2014). A registered mark may be canceled at any time for genericness; a descriptive mark may be canceled if the challenger shows that it lacks secondary meaning and provided the mark has not become incontestable by remaining in continuous use for five years from its date of registration. See 15 U.S.C. §§ 1115, 1064, 1065 ; Park N Fly, Inc. v. Dollar Park and Fly, Inc. , 469 U.S. 189, 196, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985) ; Nola Spice Designs, LLC v. Haydel Enters., Inc. , 783 F.3d 527, 547 (5th Cir. 2015) ; Ashland Oil, Inc. v. Olymco, Inc. , 64 F.3d 662, at *2 (6th Cir. 1995).
1. Plaintiffs Mark is Not Generic
Count III of Defendants counterclaim seeks cancellation of Plaintiffs mark for genericness. [47] at 16. A generic term is one that is commonly used as the name of a kind of goods. Liquid Controls Corp. v. Liquid Control Corp. , 802 F.2d 934, 936 (7th Cir. 1986). It does not identify a products source but merely specifies the genus of which the particular product is a species. Id. Because it is commonly used to denote the product, a common source of evidence is the dictionary. Id.
Plaintiffs mark is not generic. Capsule is not commonly used to denote cell phone cases, nor does it clearly specify the broader genus of which cell phone cases are a species. Id. Moreover, Defendant has the burden of proving that the mark is generic, id. at 938, and Defendant has not pursued this counterclaim in its motion for summary judgment, let alone offered evidence to support it, see [125]. Therefore this argument is waived, Crespo v. Colvin , 824 F.3d 667, 673 (7th Cir. 2016), and this Court grants summary judgment to Plaintiff on Count III of Defendants counterclaim, Celotex , 477 U.S. at 322-23, 106 S.Ct. 2548.
2. Plaintiffs Mark is Descriptive
Count IV of Defendants counterclaim asserts that Plaintiffs mark is merely descriptive and therefore not protectable unless it has a secondary meaning. [47] at 17. Plaintiff argues that its mark is at least suggestive and thus entitled to automatic protection. [158] at 19-20.
A descriptive mark ordinarily names a characteristic of a product or service. Sorensen v. WD-40 Co. , 792 F.3d 712, 724 (7th Cir. 2015). Descriptive terms are generally not protectable as trademarks, in part because they are poor means of distinguishing one source of services from another. Liquid Controls , 802 F.2d at 936. The distinction between a descriptive and a suggestive mark is that a descriptive mark imparts information directly, while a suggestive mark stands for an idea which requires some operation of the imagination to connect it with the goods. Platinum , 149 F.3d at 727 (internal quotation marks omitted). An example of a suggestive mark is Tide, which requires imagination to be connected with soap. See Sands , 978 F.2d at 953. Courts evaluate whether a mark is suggestive or descriptive from the perspective of the consumer. Id.
Plaintiffs registered trademark triggers the presumption that it is not descriptive and Defendant has the burden not only to overcome that presumption but also to show that there is no genuine issue of material fact as to descriptiveness. See Liquid Controls , 802 F.2d at 937. But once a defendant produces sufficient evidence to burst the presumption, the plaintiff can no longer rely on that presumption to defeat a motion for summary judgment. Id. at 938. To prove descriptiveness, parties may offer dictionary definitions, evidence on the terms use in the relevant industry, or direct evidence of consumer perceptions. See Platinum , 149 F.3d at 727 ; Sands , 978 F.2d at 952-53 ; M.B.H. Enters., Inc. v. WOKY, Inc. , 633 F.2d 50, 55 n.6 (7th Cir. 1980).
Here, Defendant offers dictionary definitions; a finding by the USPTO that Capsule is descriptive as applied to cell phone cases; and relatively common use of the term among cell phone case suppliers. [125] at 8; DSOF ¶ 8; [124-4] at 6. Despite this somewhat sparse record, this Court has no trouble concluding that capsule is descriptive as applied to cell phone cases. The Oxford English Dictionary defines capsule as a little case or receptacle. Capsule , OXFORD ENGLISH DICTIONARY , OED Online (last visited Nov. 17, 2017). Websters defines it as a small case, envelope, or covering. [124-2] at 2. Capsule therefore specifically describes a characteristic of Plaintiffs cell phone case, which is all that it need do to be considered descriptive. Sands , 978 F.2d at 952.
This Court disagrees with Plaintiff that the move from capsule to cell phone case requires a mental leap of the kind required by suggestive terms. [158] at 19. It is not necessary that a descriptive term depict the product itself, but only that the term refer to a characteristic of the product. Sands , 978 F.2d at 952 (internal quotation and punctuation marks omitted). This is what is meant by the rule that descriptive terms impart information directly. Packman , 267 F.3d at 641. Here, capsule directly imparts information about a characteristic of Plaintiffs product: namely, that it is a case or covering. Capsule thus resembles Work-N-Play, which merely described a van used for work and for play, Custom Vehicles , 476 F.3d at 483, and Thirst Aid, which described a thirst-quenching drink, rather than Tide, which required substantial imagination to summon any idea of soap and was not a characteristic of soap, see Sands , 978 F.2d at 952. Accordingly, this Court finds that capsule is descriptive of cases for small electronic goods.
3. Secondary Meaning
A descriptive term may nevertheless be protected if it has acquired secondary meaning. Platinum , 149 F.3d at 728. Secondary meaning exists only if most consumers have come to think of the word not as descriptive at all but as the name of the product. Packman , 267 F.3d at 639 (internal quotation marks omitted). Factors used to assess whether a term has secondary meaning include: (1) the amount and manner of advertising; (2) the sales volume; (3) the length and manner of use; (4) consumer testimony; and (5) consumer surveys. Platinum , 149 F.3d at 728. Lengthy, exclusive use of a mark can create secondary meaning, but the inquiry remains whether consumers understand that the relevant term has come to mean that those products or services are the companys trademark. Id. Because Plaintiffs mark is registered, it is presumed to have secondary meaning. Packman , 267 F.3d at 638-39. Thus, although this Court appreciates the difficulties of proving a negative, Liquid Controls , 802 F.2d at 938-39, Defendant must show that the mark lacks secondary meaning, Packman , 267 F.3d at 638-39.
Here, Defendant offers evidence that Plaintiffs use of the term Capsule has not been exclusive. Defendant has used Capsule at least since 2010-only a year after Plaintiffs first use-and it is also used by other cell phone case suppliers. See PSOF ¶ 6; [1-6]; [124-10]. Further, Plaintiff has, at best, used the term for under eight years; even though it is not impossible that secondary meaning could arise in that time, this case falls closer on the spectrum to five years (which casts serious doubt upon the very possibility of establishing a strong secondary meaning) than fifty years (which is better proof of an established brand). Gimix, Inc. v. JS & A Grp., Inc. , 699 F.2d 901, 907 (7th Cir. 1983). Moreover, if the period of Plaintiffs exclusive use is less than a year (as evidenced by Plaintiffs first use in 2009 and Defendants 2010 introduction of Capsule products), that fact provides a significant reason to doubt that the mark achieved secondary meaning, id. , particularly in a market replete with similar products, see Custom Vehicles , 476 F.3d at 484 (noting the difficulty of establishing secondary meaning in a competitive market for similar products). Such evidence tends to rebut the presumption of secondary meaning.
Defendant next argues that Plaintiffs advertising efforts were minimal, and that its sales have dropped since Plaintiff stopped making the Capsule model for new iPhone generations. [125] at 11. As to advertising, it is far from clear that Plaintiffs efforts were minimal. The record shows that Plaintiff hired a marketing firm, used Google ads, ran traditional ads, and sought celebrity placements. See R. DSOF ¶¶ 24-25; [124-14]. Plaintiff does concede that it used Google ads only briefly because they were not successful. R. DSOF ¶ 25.
As to sales, Defendants sole evidence is that Plaintiff ceased making the Capsule model for iPhone generations after the 5/5s, but Defendant fails to connect that fact to reduced sales. See DSOF ¶¶ 43, 44. Defendant offers evidence of Plaintiffs sales from July 2010 to March 2011, [128], but this hardly covers the full period of Plaintiffs Capsule sales, and in any event Defendant provides no evidence allowing this Court to assess the relative strength of such sales in the cell phone case market. Thus, these factors do not serve to rebut the presumption of secondary meaning accorded to Plaintiffs mark.
The foregoing factors are circumstantial evidence of secondary meaning. Intl Kennel Club of Chi., Inc. v. Mighty Star, Inc. , 846 F.2d 1079, 1085 (7th Cir. 1988). Consumer testimony and consumer surveys are the only direct evidence of secondary meaning. Id. Defendant produced the only consumer survey in the record. [124-19]. The survey shows that among consumers of cell phones and cell phone cases-excluding employees in the industry-only 6 percent of respondents were familiar with Capsule as a brand name (compared with over 60 percent familiar with the competing case brand OtterBox). Id. at 10. Only 14 percent of respondents could connect Capsule to cell phone cases when prompted. Id. at 11. As such, the survey indicates that, far from Capsule having come to mean a cell phone case in the minds of consumers, it has barely registered with consumers. Thus, Plaintiffs product does not enjoy a mental association in buyers minds between the alleged mark and a single source of the product. Packman , 267 F.3d at 641 (internal quotation marks omitted). Based upon the record, Plaintiffs mark has not acquired a secondary meaning.
In sum, Defendant meets its burden of showing that Plaintiffs mark is merely descriptive and lacks secondary meaning. See id. at 639, 641-42. The date of registration for Plaintiffs mark is May 21, 2013; it therefore has not been in continuous use for five years and has not become incontestable. See [149-3]; 15 U.S.C. § 1065. Accordingly, descriptiveness remains a valid basis upon which Defendant may seek cancellation of Plaintiffs mark. See 15 U.S.C. § 1115(a) ; Park N Fly , 469 U.S. at 196, 105 S.Ct. 658 ; Ashland Oil , 64 F.3d 662, at *2, 5. Because Plaintiffs mark is merely descriptive and lacks secondary meaning, it is invalid, see Gimix , 699 F.2d at 907-08, which makes cancellation the best course, Cent. Mfg. , 492 F.3d at 883.
This Court therefore grants summary judgment to Defendant on Count IV of its counterclaim, [47] at 17, and orders the USPTO to cancel U.S. Trademark Registration No. 4,338,254, see 15 U.S.C. § 1119.
C. No Likelihood of Confusion
This Courts conclusion that the Capsule mark is descriptive and void of secondary meaning disposes of Plaintiffs infringement claims in addition to Defendants counterclaims. See Packman , 267 F.3d at 642. As an alternate basis for this Courts ruling on Plaintiffs claims, this Court finds that Defendant did not infringe on Plaintiffs mark because there is no likelihood of consumer confusion.
Plaintiffs claims are for federal trademark infringement under 15 U.S.C. § 1114(a) ; unfair competition and false designation of origin under 15 U.S.C. § 1125(a) ; and Illinois common law unfair competition. [1]. Both federal claims require Plaintiff to show that: (1) Plaintiff holds a protected right in the mark; and (2) Defendants use is likely to confuse consumers or deceive the public. See S Indus., Inc. v. Stone Age Equip., Inc. , 12 F.Supp.2d 796, 804 (N.D. Ill. 1998) ; see also Packman , 267 F.3d at 639 (requirements for § 1114 claims); G. Heileman Brewing Co. v. Anheuser-Busch, Inc. , 873 F.2d 985, 999 (7th Cir. 1989) (discussing § 1125 claims). In Illinois, the common law tort of unfair competition applies to a broader range of conduct, but here also depends upon likelihood of confusion as to the source of plaintiffs goods when the whole product, rather than just the service mark, is considered. Thompson v. Spring-Green Lawn Care Corp. , 126 Ill. App. 3d 99, 113, 81 Ill.Dec. 202, 466 N.E.2d 1004 (1984) ; see also James Burrough Ltd. v. Sign of Beefeater, Inc. , 540 F.2d 266, 274-75 (7th Cir. 1976) (both § 1114 and Illinois common law infringement claims turn on consumer confusion). Thus, Plaintiff must show a likelihood of consumer confusion caused by Defendants use of Capsule to prevail on all three of its claims.
The Seventh Circuit has identified seven factors to assess whether Defendants use of the trademarked term is likely to confuse consumers: (1) similarity between the marks in appearance and suggestion; (2) similarity of the products; (3) area and manner of concurrent use; (4) degree of care likely to be exercised by consumers; (5) strength of the plaintiffs mark; (6) actual confusion; and (7) intent of the defendant to palm off his product as that of another. Packman , 267 F.3d at 643. No single factor is dispositive but in many cases, the similarity of the marks, the defendants intent, and actual confusion are particularly important. Id. Confusion is a question of fact but may be decided at summary judgment where the evidence is so one-sided that there can be no doubt about how the question should be answered. Door Sys., Inc. v. Pro-Line Door Sys., Inc. , 83 F.3d 169, 171 (7th Cir. 1996).
1. The Marks are Not Confusingly Similar
Courts evaluate the similarity of two marks in light of what happens in the marketplace, and not merely by looking at the two marks side-by-side. Ty, Inc. v. Jones Grp., Inc. , 237 F.3d 891, 898 (7th Cir. 2001) (internal quotation marks omitted). Taking market conditions into account, courts determine if the marks are similar in sound, appearance, meaning, and connotation. S Indus. , 12 F.Supp.2d at 813 (internal quotation marks omitted). Relevant considerations include the appearance and placement of the marks, different packaging, coloring, and labeling, Packman , 267 F.3d at 644, and the use of a prominent brand name with the mark, G. Heileman Brewing , 873 F.2d at 999.
Here, it is indisputable that both parties use the trademarked term Capsule, both alone and in combination with other words or phrases. See [149-11] (Spigen packaging with Capsule alone); [149-19] (Spigen products sold as Ultra Fit Capsule, Case Capsule Solid, and others); [124-12] (Uncommon products sold as Capsule Case); [124-28] (Uncommon product sold as Capsule). The term is thus the same in sound, meaning, and connotation, and appears in a similar sans-serif font, either at the bottom of physical packaging or next to a picture of the product when sold online. See [124-12]; [149-11]; [149-18]; [149-19]. These factors weigh in favor of the marks similarity. See Packman , 267 F.3d at 644 ; see also S Indus. , 12 F.Supp.2d at 813-14.
But viewing the marks from a consumers marketplace vantage point, as this Court must, the similarities diminish. S Indus. , 12 F.Supp.2d at 814 ; see also James Burrough , 540 F.2d at 275. In every example of the parties products contained in the record, the parties display their respective brand names and logos prominently in conjunction with the mark. See, e.g. , [124-12], [124-30], [149-11]. On both parties packaging, the branding and logo are more prominent than the Capsule mark, which, as described above, often appears in a smaller font size at the bottom of the packaging. Id. The coloring of the packaging echoes each parties brands (blue and white or black for Plaintiff; black and orange for Defendant), further diminishing the likelihood of confusion. See Packman , 267 F.3d at 644 ; Ziebart Intl Corp. v. After Mkt. Assocs. , 802 F.2d 220, 227 (7th Cir. 1986) (use of different colors with disputed marks reduces likelihood of confusion as to source). Indeed, the only instance Plaintiff points to where the mark is used without a brand name is a product listing on its own website , where, in fact, Plaintiffs logo appears at the top of the page. See R. DSOF ¶ 47; [124-28].
Once a consumer has arrived at a sellers dedicated website, little to no danger exists that the consumer will be confused as to the source of the product he or she is purchasing. See Door Sys. , 83 F.3d at 174 (because trademarks are merely an identifier of source, competitors can use the mark provided there is no likelihood that the source will be confused). On third-party sites like Amazon, where some of the parties products are sold, brand names always appear next to the product names, again reducing the likelihood of confusion. See [1-6]. While the question is admittedly a closer one with respect to such third-party retailers (since the parties logos and colors are not always visible in search results), the fact that the brand name appears before the mark, along with a host of individualizing descriptors of the products, weighs against finding similarities likely to cause confusion.
Finally, because-as discussed above-this Court considers Capsule a weak, descriptive mark, Defendants use of Capsule in combination with other terms has less significance for potential infringement. S Indus., Inc. v. JL Audio, Inc. , 29 F.Supp.2d 878, 890 (N.D. Ill. 1998) (quoting Henris Food Prods. Co. v. Kraft, Inc. , 717 F.2d 352, 356 (7th Cir. 1983) ). This, of course, only applies to those products using Capsule in conjunction with other terms.
Overall, considering the disputed Capsule products in their market conditions, this Court finds that their distinct packaging, coloring, and labeling, Packman , 267 F.3d at 644, and use of a prominent brand name with the mark, G. Heileman Brewing , 873 F.2d at 999, minimizes the similarity of the marks, Ziebart , 802 F.2d at 227 (Prominent display of different names on the marks can reduce the likelihood of confusion even where...the marks are otherwise similar.).
2. The Products are Similar
Despite Defendants contention that Plaintiffs customization option distinguishes its product, [125] at 22, the parties products-cell phone cases-are clearly similar. Two products are similar when they are the kind the public attributes to a single source. Ty, Inc. , 237 F.3d at 899. Consumers could certainly believe that a single source could produce both types of cases, McGraw-Edison Co. , 787 F.2d at 1169, and the cases are competitive because a consumer could replace one with the other, see Knaack , 955 F.Supp. at 1000.
That said, consumers are, in the context of the market for cell phone cases, unlikely to believe that Defendants and Plaintiffs products actually come from the same source. This is due to the distinct appearance of the marks and because, with countless cell phone cases on the market from a wide range of suppliers, see [124-10], no consumer is likely to assume that any two cell phone cases come from the same manufacturer unless the branding indicates this to be true, cf. Ty, Inc. , 237 F.3d at 899-900 (finding the fame of the Beanie mark together with plaintiffs previous licensing of the mark increased likelihood that consumers would attribute the defendants Beanie Racers to plaintiff). Thus, though the products are undoubtedly similar, this factor deserves little weight when viewed in context.
3. The Area and Manner of Use is Similar
To assess the concurrent use factor, courts examine whether there is a relationship in use, promotion, distribution, or sales between the goods or services of the parties. Id. at 900. Additional considerations include whether the parties use the same channels of commerce, target the same general audience, or use similar marketing procedures. Sorensen , 792 F.3d at 730.
Here, both parties distribute their products nationally, including through their own websites and online retailers like Amazon and eBay. PSOF ¶¶ 11, 13, 14; [1-6]; [124-28]; [124-34]. The parties Capsule cases can appear in the same online shopping search results. See [1-6]; [124-9] at 8. The parties thus avail themselves of similar distribution means and channels of commerce.
Arguably the parties target somewhat different demographics. Compare [124-28] (Uncommon website featuring customized phone with photo of a mother and child) with [124-34] at 4-12 (Spigen website advertising cases as Military Grade with banner showing soldiers). But construed in the light most favorable to Plaintiff, the record fails to disprove that the parties target the same general audience of cell phone case consumers. Sorensen , 792 F.3d at 730.
On balance, the concurrent use factor favors Plaintiff, given the similar listings of the Capsule products on third-party web platforms and their concurrent national reach. But Plaintiff offers no evidence of similarities between the parties promotional or marketing activities, which could be significant in determining whether the parties products truly compete with one another. See JL Audio , 29 F.Supp.2d at 891-92 (factors to determine whether products are truly in competition include whether they are sold in the same stores and sections of stores, or use the same means of advertising). Because cell phone case consumers describes much of the American public, the lack of evidence as to what part of that market the parties actually target leaves open the possibility that they pursue very different consumers. Thus, this minimal showing of direct competition between the parties products reduces the weight of this factor. See id. (citing Smith Fiberglass Prods., Inc. v. Ameron, Inc. , 7 F.3d 1327, 1330 (7th Cir. 1993) ).
4. Consumers Are Likely to Exercise Care
The degree of care factor assesses how sophisticated and discriminating the relevant consumers are in purchasing the disputed products. See Rust Envt & Infrastructure, Inc. v. Teunissen , 131 F.3d 1210, 1217 (7th Cir. 1997). When consumers are sophisticated-for example, if the relevant purchasers are primarily within a commercial industry-they exercise a high degree of care, minimizing the likelihood of confusion. Id. Where consumers might buy something quickly or impulsively-for example, because the product is inexpensive and replaceable- there is a greater likelihood of confusion. See TV Land, L.P. v. Viacom Intl, Inc. , 908 F.Supp. 543, 552 (N.D. Ill. 1995). Thus, the degree of care can relate to price point. See Maxims Ltd v. Badonsky , 772 F.2d 388, 393 (7th Cir. 1985). But purchases related to taste, artistic expression, or other subjective experiences are likely to be discriminating regardless of price. See JL Audio , 29 F.Supp.2d at 892 ; Tsiolis v. Interscope Records, Inc. , 946 F.Supp. 1344, 1356 (N.D. Ill. 1996).
Here, cell phone cases can be low-cost, but their prices vary widely. Defendants cases commonly sell for $14.99, [149-19, 149-21], while Plaintiffs cases have sold for as much as $39.95, [124-24] at 2, with others listed at $24.95, [124-28] at 2. Widely varying prices-particularly of goods in a competitive market- indicate that consumers are likely to exercise a greater degree of care. Knaack , 955 F.Supp. at 1001 (Because car covers at mass merchandisers are sold at different price points and in competition with competing covers, consumers can be expected to inspect the product information before purchasing.). Additionally, with the variety of phones and generations of phone on the market, consumers must make certain that they are buying the right size and type of case to meet their needs- another reason to exercise care. Id.
Plaintiff offers no evidence other than price to show that consumers buy cell phone cases impulsively. See [148] at 13. Plaintiff does point to Defendants consumer survey as evidence that consumers use little care in selecting their cases because consumers often could not recall the brand name of their case. [158] at 28. The survey, however, shows that nearly half of respondents did know the brand of their case, and in any event, the respondents cited a number of factors that weighed more heavily in their purchasing decisions, including cost, level of protection, design, functionality, online reviews, and whether it fits their phone. [124-19] at 7, 8. Such considerations indicate that consumers take time to assess a variety of attributes of phone cases, including aspects like design and specific fit that courts have found indicate a higher degree of consumer care. See JL Audio , 29 F.Supp.2d at 892 ; Knaack , 955 F.Supp. at 1001.
If anything, Plaintiffs own marketing materials and customization features show that cell phone cases can be a means of subjective self-expression, see [124-15], [124-14] at 7-15, which means that consumers are likely to be discriminating in such purchases regardless of price, see Tsiolis , 946 F.Supp. at 1356.
Plaintiff asserts that its failure to offer evidence of care leaves this factor neutral, [158] at 28, but that is not the case. Although this Court construes inferences in Plaintiffs favor on Defendants summary judgment motion, it is still Plaintiffs burden to establish the elements of its claims, Celotex , 477 U.S. at 322-23, 106 S.Ct. 2548, which here requires demonstrating a likelihood of consumer confusion, see S Indus. , 12 F.Supp.2d at 804. Thus, Plaintiffs failure to introduce evidence may be fatal to its claims. See Packman , 267 F.3d at 646. In any event, Plaintiff does not create a genuine issue of material fact with respect to consumer care, and this factor weighs in favor of Defendant.
5. Plaintiffs Mark is Weak
For purposes of consumer confusion analysis, a marks strength depends upon two elements: first, how inherently distinctive it is, based upon where the mark falls on the spectrum between generic and arbitrary, and second, whether the public considers the mark to indicate a particular source, which may be the result of the marks distinctiveness, wide and intensive advertisement, or both. See Telemed Corp. v. Tel-Med, Inc. , 588 F.2d 213, 219 (7th Cir. 1978).
This Court already found Plaintiffs mark so lacking in distinctiveness as to be void for descriptiveness. Use of a descriptive term in a mark may mean that that feature of the mark is of less significance in designating a source of origin.
Henris Food Prods. , 717 F.2d at 356. Thus, Defendants use of the mostly descriptive term capsule in its marks is not a strong indicator of their products source, and is unlikely to cause consumer confusion. Additionally, the record shows that the term capsule is used by various makers of cell-phone cases, beyond the parties to this case. See [1-6]; [124-8]; [124-9] at 8, 11. Such wide use of similar terms by different companies further weakens the mark. See One Indus., LLC v. Jim ONeal Distrib., Inc. , 578 F.3d 1154, 1164-65 (9th Cir. 2009) ; see also Packman , 267 F.3d at 646 (widely used descriptive phrase indicated a weak mark); Blau Plumbing, Inc. v. S.O.S. Fix-It, Inc. , 781 F.2d 604, 610 (7th Cir. 1986) (use of contested location boxes by many competitors indicated plaintiffs mark was weak).
Plaintiff offers no evidence directed to this factor, other than its earlier arguments that its mark is not descriptive, which this Court already discussed. Beyond that, Plaintiff argues without citation that its lengthy use of the mark and the success of Plaintiffs business stemming from using the mark prove the marks strength. [158] at 27. Although Plaintiff provides certain sales records, see e.g. , [150-1], it offers no evidence linking the sales to the mark (rather than, for example, the customizable feature of the Capsule case), nor does Plaintiff offer any evidence that the mark has the kind of fame with consumers that supports an inference of strength, see Telemed , 588 F.2d at 219. Nor do the not-quite eight years of Plaintiffs use of the mark constitute lengthy use. In Telemed , the Seventh Circuit found that the plaintiffs use of the mark for nine years failed to constitute a sufficient period for that consideration to affect the strength of the mark. Id.
Finally, Plaintiff points to Defendants consumer survey (despite contending elsewhere that it is inadmissible). [158] at 27, [148] at 14. Plaintiff argues that because the survey shows its brand recognition equals Defendants, its mark is strong. The survey, however, shows that no consumers were able to name either Plaintiff, Defendant, or Capsule as brands of cell phone cases when unaided, and only six percent were familiar with Capsule as a cell phone case brand when presented with it as a suggestion. [124-19] at 9, 10. Thus, Plaintiffs mark is weak.
6. No Evidence of Actual Confusion
Although proof of actual confusion among consumers is not required to prove likelihood of confusion, courts often view evidence of actual confusion as the best evidence of likelihood of confusion. Union Carbide Corp. v. Ever-Ready Inc. , 531 F.2d 366, 383 (7th Cir. 1976). The importance of this factor is greater when the products involved are low value items because purchasers are unlikely to complain when dissatisfied, which would bring to light confusion. Id. Additionally, concurrent use of a disputed mark without any instances of actual confusion weighs heavily against finding any likelihood of confusion. S Indus. , 12 F.Supp.2d at 818. In some cases, lack of evidence of actual confusion may be conclusive on the issue of consumer confusion. Box Acquisitions , 32 F.Supp.3d at 939 (citing Nike, Inc. v. Just Did It Enters., 6 F.3d 1225, 1231 (7th Cir.1993) ).
Here, Plaintiff admits that it has no evidence of actual confusion between its Capsule cases and Defendants, R. DSOF ¶ 52, which ought to end the matter. Despite this, Plaintiff asserts that Defendant has admitted the likelihood of consumer confusion, which it argues is dispositive of the entire confusion inquiry. [148] at 15. However, the paragraphs in Defendants Answer that Plaintiff points to pertain to Count II of Defendants counterclaim asserting prior use of the mark, [47] ¶¶ 38-40, which this Court dismissed, [62] at 15, and in any event contain no direct admission of confusion. Nor do Defendants admissions elsewhere clearly admit consumer confusion. Instead, Defendants responses to Plaintiffs requests for admission (RFAs) merely preserve its defense that Defendant is the senior user of the mark, [149-19] (RFA Nos. 55, 57), and in one instance argues-presumably in service of its since-abandoned counterclaim-that Plaintiffs mark is subject to cancellation because of Defendants senior use of the mark, id. (RFA No. 64).
In no way do these responses resemble the circumstances of the cases cited by Plaintiff, which either do not support Plaintiffs position, are confined to specific factual circumstances, are out-of-circuit opinions that fail to persuade this Court, or some combination of the above. See, e.g. , Days Inns Worldwide, Inc. v. Lincoln Park Hotels, Inc. , 500 F.Supp.2d 770, 774-75 (N.D. Ill. 2007) (defendants admitted confusion at least in part because purpose of motion was to shift blame to another defendant and in any event dispositive issue was lack of evidence, not admissions); Martahus , 3 F.3d at 419-20 (both parties agreed that there was a likelihood of confusion so the case did not present the issue).
Thus, Plaintiff fails to offer evidence of actual confusion. This factor necessarily favors Defendant, and provides added significance here because of the relative ease of replacing low-cost or mid-range cell phone cases. See Box Acquisitions , 32 F.Supp.3d at 939. Moreover, this factor is one of the three given particular importance by the Seventh Circuit, Packman , 267 F.3d at 643, and thus, this Court gives it appropriate weight.
7. No Evidence of Intent to Palm Off
The final confusion factor is the third particularly important factor. See Packman , 267 F.3d at 643. The intent to palm off factor asks whether the alleged infringer is trying to get sales from a competitor by making consumers think that they are dealing with that competitor, when actually they are buying from the passer off. G. Heileman Brewing , 873 F.2d at 1000. This constitutes a type of fraud. Liquid Controls , 802 F.2d at 940. It cannot be proven by the mere similarity of names or even mere copying, particularly where the copied term is descriptive. Id. It requires some evidence of the defendants bad faith, which can be countered by evidence that the defendant intended to promote itself as the source of the product. Packman , 267 F.3d at 644. Distinctive appearances and a clearly stated designation of origin weigh against finding an intent to palm off. Door Sys., Inc. v. Overhead Door Sys., Inc. , 905 F.Supp. 492, 496 (N.D. Ill. 1995).
Here, use of the mostly descriptive term capsule does not lend itself to finding bad faith on Defendants part. Additionally, the distinctive appearance of Defendants Capsule product packaging along with the constant application of Defendants brand name (the designation of origin) weigh against finding the intent to palm off. See, e.g. , [149-11]; Overhead Door Sys. , 905 F.Supp. at 496.
Plaintiff argues that Defendants knowledge of its marks existence shows bad faith, [148] at 17, but the Seventh Circuit has held that mere knowledge of a competitor or its mark does not show fraudulent intent, particularly where the phrase is widely used or the marks appearances are distinct, Packman , 267 F.3d at 644-45 (citations omitted). Nor do Defendants continued applications to the USPTO to register its Capsule family marks necessarily indicate bad faith, as Plaintiff suggests. [158] at 30. Rather, Defendant may have reasonably considered that Plaintiffs mark did not bar Defendants use of the term capsule, particularly once the USPTO approved Defendants application for Capsule Capella. See Knaack , 955 F.Supp. at 1004 (USPTO approval of allegedly similar mark may weigh against finding intent to palm off). Plaintiffs conclusory assertions to the contrary do not create a genuine issue of material fact. Packman , 267 F.3d at 645.
8. Summary
Thus, the three most important factors-the similarity of the marks, the defendants intent, and actual confusion-all favor Defendant, as do the degree of care and strength of the mark. Packman , 267 F.3d at 643. Overall, there can be no doubt that Defendants use of capsule is unlikely to cause consumer confusion. Door Sys. , 83 F.3d at 171. Because this is a necessary element of all three of Plaintiffs claims, this Court grants Defendants motion for summary judgment on those claims. See Packman , 267 F.3d 628 (affirming summary judgment where plaintiff failed to demonstrate likelihood of confusion).
IV. Conclusion
For the reasons explained above, this Court grants in part and denies in part the parties motions for summary judgment. [123, 147]. This Court grants Defendant summary judgment on all of Plaintiffs claims and on Defendants counterclaim that Plaintiffs mark is merely descriptive without secondary meaning. This Court grants Plaintiff summary judgment on Defendants counterclaim that Plaintiffs mark is generic. Because Plaintiffs mark is merely descriptive and lacks secondary meaning, this Court orders the USPTO to cancel U.S. Trademark Registration No. 4,338,254. 15 U.S.C. § 1119.
Because this Court does not award Plaintiff damages, Defendants motion to strike Plaintiffs expert report on damages [107], is denied as moot.
This Court also denies Plaintiffs motion to strike Defendants expert report [104], and Plaintiffs motion to strike Kirk Martensens affidavit [177]. Defendants motion to withdraw or amend certain requests for admission [180] is granted in part and denied in part, as discussed above.
Judgment is entered in favor of Defendant and against Plaintiff on Plaintiffs complaint for trademark infringement. [1]. Judgment is entered in favor of Plaintiff and against Defendant on Count III of Defendants counterclaim. [47]. Judgment is entered in favor of Defendant and against Plaintiff on Count IV of Defendants counterclaim. Id. Civil case terminated.
In citations, DSOF refers to Defendants statement of undisputed facts [124], with Plaintiffs responses [157] cited as R. DSOF. PSOF refers to Plaintiffs statement of undisputed facts [149], with Defendants responses [152] cited as R. PSOF. PSAF refers to Plaintiffs statement of additional facts [157], with Defendants responses [171] cited as R. PSAF. DSAF refers to Defendants statement of additional facts [152], with Plaintiffs responses [169] cited as R. DSAF. References to additional filings are by docket number.
Plaintiffs reply brief contains additional arguments about other disputed responses by Defendant. See [168] at 8-10. But these overlap with Plaintiffs arguments against Defendants motion to withdraw certain of its admissions, which this Court addresses later in this opinion. This Court will not consider additional, waived arguments on that issue.
Despite offering its own internet search evidence, see [1-6], [149-19], Plaintiff offers a number of perfunctory hearsay objections to Defendants internet evidence, without citing to law, see R. DSOF ¶ 11. This Court finds the internet search evidence admissible under Federal Rule of Evidence 807. The internet evidence offered by both sides consists of images of search returns on the parties websites or retail websites like Amazon, see, e.g. , [149-18], [124-22], and is likely to be trustworthy because it is in the sellers interest to accurately represent its products. Additionally, this evidence is more probative on the issue of consumer confusion-an element of trademark infringement-than any other comparable evidence and admitting it will best serve the purposes of the federal rules and the interests of justice. See Fed. R. Evid. 807 ; see also Peerless Indus., Inc. v. Crimson AV LLC , No. 11-c-1768, 2017 WL 1192805, at *3 & *3 n.6 (N.D. Ill. Mar. 31, 2017) (affirming use of Amazon.com print-out as evidence of public availability of a product); In re Bayer Aktiengesellschaft , 488 F.3d 960, 967 (Fed. Cir. 2007) (internet search results are evidence of the descriptiveness of a mark); 2 McCarthy on Trademarks and Unfair Competition §§ 11:20, 20:126.50 (5th ed.) (discussing use of internet search results to show descriptiveness and consumer understanding and use of a term).
This Court may take judicial notice of public records and government documents, including those available from reliable sources on the Internet. Sleeter v. Actavis Totowa, LLC , No. 10-653-GPM, 2010 WL 3781261, at *2 n.1 (S.D. Ill. Sept. 21, 2010) (citing Laborers Pension Fund v. Blackmore Sewer Constr., Inc. , 298 F.3d 600, 607 (7th Cir. 2002) ).
Defendant argues that this purported prior use may be grounds for cancellation of Plaintiffs mark. [125] at 13. There are two glaring problems with this argument, as evidenced by the very cases Defendant cites. In Martahus v. Video Duplication Services , the Federal Circuit noted that 15 U.S.C. § 1052(d) supports cancellation on the basis of prior use when the subsequently registered mark so resembles a mark or trade name previously used in the United States by another, and not abandoned, as to be likely, when used in connection with the second users product, to cause confusion. 3 F.3d 417, 421 (Fed. Cir. 1993). Even if Defendant could show that its use of capsule as a decorative sticker was likely to cause confusion with Plaintiffs cell phone case-a doubtful proposition-its single citation to an image of this capsule-patterned sticker, see DSOF ¶ 15, [124-55], does not satisfy Martahus requirement that cancellation of a registered mark on these grounds rebut the registered marks presumed validity by a preponderance of the evidence, 3 F.3d at 421.