Opinion
Civil Action No. 96-3153 (JBS)
Filed: May 17, 1999
Susan S. Singer, Esquire, Singer Groger, Newark, New Jersey, and Roberta Jacobs-Meadway, Esquire, Karol A. Kepchar, Esquire, Jordan A. LaVine, Esquire, Panitch Schwarze Jacobs and Nadel, P.C., Philadelphia, PA, Attorneys for Plaintiff.
Robert J. Del Tufo, Esquire, Skadden, Arps, Slate, Meagher Flom LLP Newark, New Jersey, Attorney for Defendant.
OPINION
Plaintiff Checkpoint Systems Inc. ("Checkpoint Systems") brings this action against defendant Check Point Software Technologies Inc. ("Check Point Software"), alleging federal trademark infringement and unfair competition under the Lanham Act, 15 U.S.C. § 1051, et seq. Previously, the parties brought cross-motions for summary judgment, which this Court denied in a May 26, 1998 Opinion. As I explained in that Opinion, genuine issues of material fact remain pertaining to the issue of the likelihood of confusion in the marketplace regarding the source of defendant's products. The Court determined that issues of fact continue to exist concerning the relatedness of the parties' respective products and businesses and the trade channels therefore. Now before this Court are the parties' motions in limine, as both parties' seek to exclude the other's proposed experts. For the reasons stated herein, defendant's motion in limine will be denied, but plaintiff's motion in limine will be granted.
I. Background
The facts of this case have already been discussed at length in this Court's May 26, 1998 Opinion, and they need not be repeated at this time. What follows is a description of the particular individuals whom the plaintiff and the defendant propose as expert witnesses.
A. Plaintiff's Experts
In the parties' Joint Final Pre-Trial Order, plaintiff designated five trial expert witnesses: Ira S. Somerson, Dr. Robert D. McCrie, David L. Johnston, Peter E. Ohlhausen, and Dr. Sanford Sherizen. Defendant objected to the expected testimony of each of these proposed experts. Based on the written reports of these designated experts, defendant now seeks to exclude the expected testimony of Somerson and McCrie in their entirety, as well as portions of the expected testimony of the remaining three expert witnesses.
Mr. Somerson's qualifications are gleaned from his curriculum vitae, attached to his report in Appendix 1, attached to the Certification of Robert J. Del Tufo.
Ira Somerson is a Board Certified Forensic Examiner ("BCFE"), Certified Fraud Examiner ("CFE"), and a Certified Protection Professional ("CPP"). He has over 35 years of experience in the corporate security field, offering comprehensive security management consulting services. Mr. Somerson is the president of Loss Management Consultants, which analyzes potential security threats and the design of appropriate defensive security strategies in commercial, industrial, institutional, and governmental environments. Prior to this, Mr. Somerson was the president of a security systems provider for almost twenty years. In his work, Mr. Somerson marketed and sold security management products and services of the types sold by both parties. He has taught courses on corporate security management, has authored over 30 articles on corporate security, has written a chapter in a book entitled Computer Security, has lectured on the topic of corporate security over 70 times since 1989, and is a regular columnist for Security magazine.
Based on his extensive experience in the field, Mr. Somerson, in his report, explains that protecting a commercial organization's assets, including both physical and intellectual assets, requires a uniform approach to risk assessment. (Del Tufo Certif. App. 1 at 2.) Further, Mr. Somerson opines that because end users and security dealers approach risk information and physical security assessment uniformly, defendant "would need to market its product and/or services through the same marketing and sales channels and/or networks [as plaintiff]," and it "would be practically impossible for the end user, even the more sophisticated security dealers, not to confuse and erroneously co-join the Plaintiff and Defendant as one organization." (Id.) Mr. Somerson ultimately opines that defendant's use of the mark "Check Point" is "a blatant and unfair use of a mark traded by Plaintiff, `Checkpoint,'" and that use of that mark will "undoubtedly produce a name recognition confusion in the marketing and sales channels within the security management industry. (Id.)
Dr. McCrie's qualifications are gleaned from his curriculum vitae, attached to his report in Appendix 2, attached to the Certification of Robert J. Del Tufo.
Dr. McCrie has a Ph.D. in American History with a focus in criminal justice theory and is a CPP. He is an associate professor of security management at the John Jay College of Criminal Justice, part of the City University of New York. His courses focus on the analysis of security vulnerabilities and the administration of programs designed to reduce losses in public institutions and private corporations. Since 1970, Dr. McCrie has published and edited the Security Letter, a bi-weekly publication that addresses developments in the corporate security industry. He is also editor-in-chief of the Security Journal, an academic quarterly sponsored by the American Society of Industrial Security.
In preparing for his report, Dr. McCrie reviewed the pleadings in this case, representative advertisements of both parties, both parties' web sites, a host of security management literature from Dr. McCrie's own library, documents which defendant filed with the Security and Exchange Commission, and reference books in the field which "note convergence of security technology with systems issues." (Del Tufo Certif. App. 2 at 2-5.) He then compiled a list of findings. Dr. McCrie states that plaintiff has historical primacy over defendant (id. at 7-11); that, despite the fact that the two companies might appear to have little relationship to one another, both businesses have some similarities in their products and markets (id. at 11-15); that confusion does exist and "is bound to increase considerably in the future if the present situation is allowed to continue" (id. at 15-16); and that defendant inappropriately labels plaintiff as a "retail" security business in order to minimize the similarities between the two businesses, when in fact plaintiff is "a broadly diversified security business, not linked to one industry. . . ." (Id. at 16-18.) Based on these findings, Dr. McCrie opines that defendant "has persistently misused a pre-existing trademark registered by the same entity since 1969." (Id. at 20.) Moreover, he says, "I conclude that [defendant] has infringed upon the trademark of [plaintiff], and in doing so has created a grievous and persistent burden to the plaintiff through unfair competition which only exacerbates itself over time until the regrettable offense is corrected." (Id.)
Mr. Johnston's qualifications are gleaned from his curriculum vitae, attached to his report in Appendix 3, attached to the Certification of Robert J. Del Tufo.
David Johnston is a CPP, a CFE, and a Professional Environmental Auditor. He is the Director of Corporate Security for the Educational Testing Service ("ETS") of Princeton, New Jersey, where he is responsible for all facets of corporate security and environmental protection. Prior to that, Mr. Johnston served as the Director of Corporate Security for J.I. Case Corporation and Maidenform, Inc., as well as serving as Director of Public Safety for both the University of Pennsylvania and the University of Massachusetts. Recently, he authored an article entitled "Intensive Information Security" and presented a seminar entitled "Intellectual Property: Protecting Your Most Valuable Asset."
After reviewing the pleadings in this case, representative advertisements of both parties, and both parties' web sites, and based on his experience in this field, Mr. Johnston finds that security managers would simultaneously use both plaintiff's and defendant's products for physical and computer security purposes within the same business entity (Del Tufo Certif. App. 3 at 1-6); and that the two parties' products have more similarities than differences. (Id. at 6.) Based on his knowledge of how security managers and end users view "discrete brand names and product utilization" and would be "more likely to give an impression to their readership that they emanate from the same manufacturer/marketer" (id.), Mr. Johnston opines that persons in the security industry who are aware of the need and utilization of EAS, access control and/or computer security products would be easily confused by the names "Checkpoint" and "Check Point" and would naturally consider them to be one manufacturing/ marketing organization. Furthermore, as Checkpoint Systems products are well known in the security industry, because of their advertising, product quality reputation, unique product lines and years in the industry, the identical sounding trade names would likely cause security management professionals to purchase Check Point Software Technology "firewall" products solely on the strength of "Checkpoint" Systems' name. (Id. at 7.) Finally, Mr. Johnston opines that security management professionals would be likely to be confused by defendant's use of the mark "Check Point." (Id. at 8.)
Mr. Ohlhausen's qualifications are gleaned from his curriculum vitae, attached to his report in Appendix 4, attached to the Certification of Robert J. Del Tufo.
Peter Ohlhausen has been a professional journalist and editor specializing in the field of corporate security since 1984, serving as senior editor of Security Management magazine (the official publication of the American Society of Industrial Security) and as managing partner of the Strategic Consortium International: Risk Assessment Asset Protection Specialists.
In his report, Mr. Ohlhausen makes findings on several points. First, Mr. Ohlhausen states that the name "Check Point" is not significantly different from "Checkpoint," and that, further, a number of advertisements by and articles about Check Point omit the space between "Check" and "Point." (Del Tufo Certif. App. 4 at 1.) Based on this and on the fact that "many corporate security directors oversee their companies' computer security measures, it is easy to imagine a security director approving his or her computer specialist's request to buy Check Point software because the director thinks it comes form Checkpoint Systems, a company with which he or she is familiar." (Id. at 1-2.) Next, Mr. Ohlhausen notes that three trends in the business security world today "create an increasingly logical overlap between the markets served by" plaintiff and defendant. (Id. at 2.) These trends include the integration of security operations with other segments of the business, increased control of security systems by computers, and security managers' increased responsibility for defending their companies against intrusion via computer. (Id. at 2-3.) Moreover, in addition to this logical overlap, Mr. Ohlhausen says, "there is an actual overlap in the natural markets or customer bases of Checkpoint and Check Point" (id. at 3), and where there is not currently an overlap, "it is logical to expect an overlap to develop in the future." (Id. at 5.) Mr. Ohlhausen concludes that confusion is reasonable and likely. (Id. at 8.)
Dr. Sherizen's qualifications are gleaned from his curriculum vitae, attached to his report in Appendix 5, attached to the Certification of Robert J. Del Tufo.
Dr. Sanford Sherizen has a Ph.D. in sociology and is a Certified Information Systems Security Professional ("CISSP"). He is the president of Data Security Systems, Inc., and he is a leading expert in developing management strategies for maximizing information protection and liability prevention. He has testified before the United States Senate and Massachusetts legislative committees, and he has authored or co-authored four books, including Information Security in Financial Institutions: How to Reduce the Risk of Computer Crime and Managing Information Security. Dr. Sherizen was also the featured lecturer at seminars sponsored by the MIS (management information systems) Training Institute; the seminars cover topics such as electronic access control, physical security, and computer network security, including firewalls.
In his report, Dr. Sherizen explains that "[i]nformation security has direct relationships to the other forms of security," requiring a coordinated approach with other security measures in a business. (Del Tufo Certif. App. 5 at 3-4.) NIST, one of the United States government agencies given responsibility for setting information security standards, encourages close working relationship between information security and other security units in a business. (Id. at 5.) Additionally, he says, various forms of security have grown interdependent over time. (Id.) According to Dr. Sherizen, the major implication of this for Checkpoint is that "the association found between the various types of security activities could lead to confusion on the part of security personnel between similarly named security products." (Id. at 6.) Security personnel, he says, may become "brand conscious" in their selection of security products, and security personnel could become further confused between Checkpoint products may be used in computer rooms for physical security, leading personnel to associate the products together. (Id. at 7.)
B. Defendant's Expert
Defendant offers the testimony of Dr. Dov Frishberg, an economist, as a damages expert, purportedly seeking to dispel plaintiff's claim for damages under an unjust enrichment theory.
Dr. Frishberg is the Director of Economic Services at Deloitte Touche LLP. (Frishberg Report ¶ 3.) There, he is responsible for the provision of "economic analysis" to the firm's many functions and clients, which responsibility, he states, "includes economic analysis and financial review of businesses and industries, forecasting and statistical analysis, and review of general economic trends and developments. . . ." (Id.) He was previously employed as Partner-in-Chief of Economics and Litigation Services at the New York office of BDO Seidman, Chief Economist for Ebasco Business Consulting Company, and Senior Consultant with National Economic Research Associates, Inc. (Id.) Dr. Frishberg characterizes his experience over the past twenty years as "provid[ing] extensive economic and consultative services to various [organizations]." (Id. at ¶ 4.) His education is concentrated in economics, and he has also held academic appointments and published in the field of economics. (Frishberg Curriculum Vitae.) Dr. Frishberg's report does not claim that he has expertise in anything more than economics, although at his deposition he claimed to have expertise in "marketing" and "computer system usage," as well. (Frishberg Dep. at 3.) He did not claim to have expertise in network or computer security or any special knowledge of security industry practices.
Defendant hired Dr. Frishberg to show that plaintiff has not suffered any damage and that defendant has not been unjustly enriched by the use of the "Check Point" mark. (Frishberg Report ¶ 1.) He ultimately concluded that "economically, Systems has not been damaged, nor has Software derived undue gains." (Id. at ¶ 2.) In reaching this conclusion, Dr. Frishberg did not compare the sales of either party, largely because, by the time that Dr. Frishberg prepared his report, several of plaintiff's witnesses, including plaintiff's president, Kevin Dowd, plaintiff's manager of dealer support, Craig Knick, and plaintiff's director of product management, John R. Thorn, had admitted in their depositions that they knew of no sales which plaintiff lost or defendant gained as a result of misassociation between the two parties' marks. (Dowd Dep. at 26; Knick Dep. at 148-150; Thorn Dep. at 95-96.) As a result, Dr. Frishberg's report was based not on an analysis of sales and economic factors, but rather upon the nature of the transactions and the businesses engaged in by the parties.
In reaching his conclusion, Dr. Frishberg focused his attention on
(i) the Nature of the Sale,
(ii) the Channels of Sale,
(iii) Customer Overlap, and
(iv) Advertising and Promotion.
(Frishberg Report.) More specifically, Dr. Frishberg opines as follows:
(i) The Nature of the Sale: from an economic perspective, given that both parties' products are expensive and "crucial to the operation and profitability of the purchasers of these products," and given that the "extreme difference in the nature of the products" means that professionals with different skill sets would evaluate those products, the consumer would carefully consider the decision to purchase the product and resolve any initial confusion about the relationship between the parties long before making a final selection. (Id. at ¶ 6.)
(ii) The Channels of Sale: At the point of contact with a retailer, any initial confusion would be dispelled. To prove this, Dr. Frishberg and his staff contacted 50 resellers from defendant's authorized list, and ultimately talked to 40 of them, all of whom responded that they do not know of any products related to facility access control or electronic article surveillance systems (products currently manufactured by plaintiff). (Id. at ¶ 7.) Dr. Frishberg does not reveal the questions that were asked of these resellers, and no end users or consumers other than resellers were contacted.
(iii) Customer Overlap: Dr. Frishberg opines that the parties' customer bases do not overlap. To support this conclusion, he identified five customers who purchased a product from both parties, and he and his staff were ultimately able to contact three of them. All three of those persons indicated that they participated in the decision to purchase defendant's Firewall-1 software and that no input was received by individuals with knowledge beyond network systems management. (Id. at ¶¶ 8-9.)
(iv) Advertising and Promotion: Finally, Dr. Frishberg indicates that, from an economic perspective, one would expect confusion over similar names "to manifest itself in the parties' advertising in similar trade publications and promotional venues aimed at the same target markets." (Id. at ¶ 10.) Based on Dr. Frishberg's and his staff's review of defendant's advertising and marketing plans for 1996 and 1997, defendant was not targeting advertisements at non-computer security systems publications. (Id.)
Based on all of this, Dr. Frishberg determines that plaintiff has suffered no damage.
II. Discussion
A. Expert Witness Testimony Standards
A party seeking to admit the testimony of an expert must establish the admissibility of that testimony by a preponderance of the evidence. In re Paoli Yard PCB Litigation, 35 F.3d 717, 743-744 (3d Cir. 1994). Under the Federal Rules of Evidence, a federal judge must serve as a "gatekeeper" to ensure that "any and all expert testimony or evidence is not only relevant, but also reliable." Kannankeril v. Terminix Int'l, Inc., 128 F.3d 802, 806 (3d Cir. 1997) (citing Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993)). The rules, however, embody a strong and undeniable preference for admitting any evidence that could potentially assist the trier of fact. Id.; Holbrook v. Lykes Bros. Steamship Co., 80 F.3d 777, 780 (3d Cir. 1996). Rule 702 of the Federal Rules of Evidence, which governs the admissibility of expert testimony, has a liberal policy of admissibility. Kannankeril, 128 F.3d at 806.
The Supreme Court has recently re-examined the trial judge's "gatekeeping" function under Daubert when the reliability of the basis for expert opinion testimony is brought into question, in Kumho Tire Co. v. Carmichael, 119 S.Ct. 1167 (1999). Rule 702 "establishes a standard of evidentiary reliability." Id. at 1174 (quoting Daubert, 509 U.S. at 590). Where the opponent to such proffered testimony brings the factual basis, data, principles, methods, or their application into question, "the trial judge must determine whether the testimony has `a reliable basis in the knowledge and experience of [the relevant] discipline.'"Kumho, 119 S.Ct. at 1175 (quoting Daubert, 509 U.S. at 592).
Under Rule 702, there are primarily three requirements: (1) the proffered witness must be an expert; (2) the expert must testify about matters requiring scientific, technical, or specialized knowledge; and (3) the expert's testimony must assist the trier of fact. Id. at 806;Holbrook, 80 F.3d at 781.
The purpose of the second requirement — that the expert testify about matters requiring scientific, technical, or specialized knowledge — is to insure the reliability or trustworthiness of the expert's testimony. United States v. Velasquez, 64 F.3d at 844, 849 (3d Cir. 1995). The Supreme Court has indicated that the purpose of this gatekeeping requirement is "to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field." Kumho, 119 S.Ct. 1167. The Third Circuit has recently summarized the nature of this inquiry:
In interpreting this second requirement, we have concluded that "an expert's testimony is admissible so long as the process or technique the expert used in formulating the opinion is reliable." Paoli, 35 F.3d at 742 (citing Daubert, 509 U.S. at 589, 113 S.Ct. at 2794-95). In order for the expert testimony to be "reliable," we have required that the testimony be based on the "methods and procedures of science," rather than on "subjective belief or unsupported speculation." Paoli, 35 F.3d at 744. Moreover, Daubert does not set up a test of which opinion has the best foundation, but rather whether any particular opinion is based on valid reasoning and reliable methodology. Admissibility decisions focus on the expert's methods and reasoning; credibility decisions arise after admissibility has been determined. See Paoli, 35 F.3d at 743-46.Kannankeril, 128 F.3d at 806-07. Ultimately, the focus of the inquiry is on whether plaintiff has established that the testimony of a proffered expert is based on "good grounds." Id. at 807; Velasquez, 64 F.3d at 849. The Supreme Court has cautioned that the Daubert factors, or other listings of considerations derived from the Daubert reliability factors, are not to be mechanically applied in every such Rule 702 inquiry; rather, the trial judge "must have considerable leeway in deciding in a particular case how to go about determining whether particular expert testimony is reliable. That is to say, a trial court should consider the specific factors identified in Daubert where they are reasonable measures of the reliability of expert testimony." Kumho, 119 S.Ct. 1167.
An expert may not testify beyond his or her area of expertise. See, e.g., Aloe Coal Co. v. Clarke Equip. Co., 816 F.2d 110, 114-115 (3d Cir.) (salesman could not testify as to cause of tractor shovel fire because he had not more expertise than a layman on that subject), cert. denied, 484 U.S. 853 (1987); Poust v. Huntleigh Healthcare, 998 F. Supp. 478, 492-493 (D.N.J. 1998) (lawyer/engineer could not testify as to medical cause of plaintiff's injuries). Rule 702 requires that an expert have sufficient knowledge such that he or she has good grounds for the expert testimony offered. Lithuanian Commerce Corp. v. Sara Lee Hosiery, 177 F.R.D. 245, 259 (D.N.J. 1997), vacated in part, Lithuanian Commerce 2, 179 F.R.D. 450 (D.N.J. 1998); see also Daubert, 509 U.S. at 590.
Moreover, "[l]egal conclusions are not within the ambit of expert testimony permitted under Rule 703. . . ." Lynch v. J.P. Stevens Co., 758 F. Supp. 976, 1014 (D.N.J. 1991). However, expert testimony is not barred just because it expresses an opinion about an ultimate issue of fact or law to be decided in the case. Rule 704 of the Federal Rules of Evidence clearly states the cope of permissible expert testimony:
(a) Except as provided in subdivision (b) [which makes an exception for experts purporting to testify as to a criminal defendant's mental state constituting an element of the crime charged], testimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.
Fed.R.Evid. 704(a). The Advisory Committee Notes to Rule 704 explain this:
The older cases often contained strictures against allowing witnesses to express opinions upon ultimate issues. . . . This rule was unduly restrictive, difficult of application, and generally served only to deprive the trier of fact of useful information. . . . The basis assigned for the rule, to prevent the witness from "usurping the province of the jury," is aptly characterized as "empty rhetoric."Id. (Advisory Committee Notes). Therefore, an expert may testify as to an ultimate issue of fact to be decided, but that expert may not give a jury a separate set of legal standards and conclusions than those decreed by the judge. Of course, when the case in question involves a nonjury trial, such that the Court, and not a jury, will decide all factual and legal issues, there is little risk that an expert who states an opinion on an ultimate issue of fact, if based upon a reliable methodology, will confuse the Court by propounding different legal standards.
B. Plaintiff's Experts
Defendant argues that this Court should exclude the expected testimony of all of plaintiff's five experts. More specifically, defendant argues that the testimony of Mr. Somerson and Dr. McCrie is inadmissible in its entirety because it states ultimate legal conclusions and because such testimony, as legal conclusion, is beyond the scope of each expert's expertise. Defendant seeks to exclude portions of the other three experts' testimony because those experts offer opinions on the ultimate issue of whether consumers will be confused, though none of the experts of trained in surveying and none are consumer psychologists.
It is true that certain of the experts, including Mr. Somerson and Dr. McCrie, state that defendant has made an unfair use of the plaintiff's trademark, thus stating the ultimate legal conclusion which the Court must decide. (See Del Tufo Certif. App. 1 at 2; id. App. 2 at 20.) The bulk of all of these proposed experts' opinions, however, speak more specifically to the various factors which this Court will consider in determining whether defendant's use of the mark and name "Check Point" presents a likelihood of confusion. In the May 26, 1998 Opinion denying summary judgment, this Court stated that genuine issues of disputed fact remained as to the various factors which the Third Circuit has stated that this Court should consider (Slip Op. at 8), including whether the goods are marketed in the same channels of trade and advertised in the same media (id. at 15), whether the parties' sales efforts target the same groups (id. at 16), whether the goods are similar in function such that consumers might be confused (id. at 17), and whether it is likely that plaintiff's products will expand to include that made by defendant. (Id. at 19.)
All of plaintiff's proposed experts, who have specialized knowledge in the field of security management above that of a layperson, speak directly to these factors. Mr. Somerson, who has over thirty-five years of experience in the field of corporate security, both as someone who advises others on implementing security management and as someone who has marketed similar products, opines that the goods are similar in function, and that they must ultimately be marketed to the same group of purchasers who develop security management on a business-wide basis. Dr. McCrie, who edits publications which address developments in the general field of security management, explains that the parties' products are similar in both design and market. Mr. Johnston, who has experience as director of corporate security for a number of organizations, concludes that, based on his experience in the field, the two parties' products overlap significantly in their markets, and that "brand conscious" security directors are likely to be confused into thinking that plaintiff has expanded into the firewall market. Mr. Ohlhausen, who draws his experience from writing publications for consulting firms and professional and trade organizations in the area of security, as well as from managing and marketing professional security consultants, notes that trends in the industry lead to a logical overlap between plaintiff's and defendant's products; he further notes that there is an actual overlap in the two parties' markets. Finally, Dr. Sherizan, who has expertise in information security, characterizes the security market as an integrated one where information and physical security are interdependent and might lead end users to confuse companies in that general field whose names are so similar.
All of these proposed experts, then, offer testimony that speaks to one or more of the considerations in determining likelihood of confusion, and all of this testimony is drawn from various experience in the general field of security management that gives each expert a unique perspective on the situation. Though defendant may cross-examine these witnesses at trial and show fault with their methodologies or conclusions, the testimony that these experts have to offer may well assist this Court in ultimately deciding issues of fact in the case. That some of these experts have additionally plainly stated that defendant made an unfair use of the trademark or that there was a likelihood of confusion is of no matter, because experts are permitted to testify as to an ultimate issue of fact and because this Court can simply ignore any incorrect legal conclusions drawn by the experts when this Court decides the issues in the case.
Additionally, defendant argues that those portions of expected testimony of Mr. Johnston, Mr. Ohlhausen, and Dr. Sherizen are inadmissible because they "offer opinions on the ultimate issue of whether consumers will be confused, even though none are survey experts or consumer psychologists, and plaintiff has no survey evidence." (Def.'s Br. at 9.) Such evidence and expertise, however, is not necessary. While survey evidence could be admissible to prove likelihood of confusion or actual confusion, see, e.g., Harlem Wizards Entertainment Basketball, Inc. v. NBA Properties, Inc., 952 F. Supp. 1084, 1090 (D.N.J. 1997), and while this Court could infer, based on the fact that plaintiff had the time and resources to conduct a survey and yet failed to do so, that likelihood of confusion could not be shown, see Charles Jacquin et Cie, Inc. v. Destileria Serralles, Inc., 921 F.2d 467, 475-76 (3d Cir. 1990);Eagle Snacks, Inc. v. Nabisco Brands, Inc., 625 F. Supp. 571, 583 (D.N.J. 1985), plaintiff has no obligation to conduct such a survey.Destileria Serralles, 921 F.3d at 475.
Moreover, these experts are not barred from testifying because they are not consumer psychologists, either. While a consumer psychologist might be trained to give an opinion as to consumers' likelihood of confusion, persons with experience in the field of security management, either as a manager, a consultant, or a publisher, could also be qualified to speak as to some of the indicia of likelihood of confusion, such as overlap in markets (including likely marketing strategy), trends in the market, similarity of products, and other relevant aspects derived from specialized experience. Again, defendant is free to attack the witnesses' credibility, methodology, or conclusions at trial, but it would be "an abuse of discretion to exclude testimony simply because the trial court does not deem the proposed expert to be the best qualified or because the proposed expert does not have the specialization that the court considers most appropriate." Holbrook v. Lykes Bros. S.S. Co., 80 F.3d 777, 782 (3d Cir. 1996).
Based on the above admissibility standard propounded by Rule 702 of the Federal Rules of Evidence, plaintiff has proven by a preponderance of the evidence that its proposed experts' testimony is admissible, and defendant's motion in limine will be denied.
C. Defendant's Expert
Plaintiff seeks to exclude Dr. Frishberg's expected testimony for several reasons. First, plaintiff argues that Dr. Frishberg's testimony goes beyond his stated area of expertise, which is economics. Second, plaintiff argues that Dr. Frishberg's testimony is based on inherently flawed survey material. Third, plaintiff contends that such survey evidence is hearsay and is thus inadmissible. Finally, plaintiff argues that Dr. Frishberg has failed to comply with the rules requiring disclosure of all of the bases for his opinion, and thus his testimony is inadmissible.
According to defendant, Dr. Frishberg, as an economist, is well-qualified to opine as to plaintiff's lack of damages. Each of the four areas upon which he touches (nature of sale, channels of sale, customer overlap, and advertising and promotion) "is quite clearly an economic aspect of the commerce at issue here. . . ." (Def.'s Opp'n Br. at 8.) Defendant does not argue specifically that Dr. Frishberg's surveys, which underlie his opinions, are thoroughly conducted, nonhearsay survey work. Rather, defendant argues, "it is commonly known (and Dr. Frishberg will confirm in his testimony) that economists routinely rely on empirical evidence gathered from the market being analyzed" (id. at 10), and thus, because facts or data "of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject . . . need not be [independently] admissible in evidence," Fed.R.Evid. 703, Dr. Frishberg may testify to it. Finally, defendant contends that plaintiff cannot argue that Dr. Frishberg's expert report violated the expert disclosure requirement of Rule 26, Fed.R.Civ.P., by failing to contain sufficient disclosure to allow plaintiff to evaluate Dr. Frishberg's position; because plaintiff took Dr. Frishberg's testimony and thus had opportunity to probe into the details of Dr. Frishberg's investigation and analysis and yet did not seize that opportunity, "any alleged technical defect in expert disclosure was both cured and waived by virtue of the deposition and Plaintiff's failure to make a timely objection." (Def.'s Opp'n Br. at 9.)
Defendant's arguments, however, are unavailing, for Dr. Frishberg's expected testimony appears to fall outside of his area of expertise and is not helpful to this trier of fact. Certainly, in the abstract, Dr. Frishberg, as an accomplished economist, is well-qualified to provide economic analysis as a damages expert. Here, however, Dr. Frishberg's testimony that plaintiff suffered no damage is not based upon monetary evidence of a lack of damages. Rather, Dr. Frishberg's testimony would be that there was no damage because there was neither a likelihood of confusion nor actual confusion. His testimony, then, is not truly that of a damages expert, but rather the testimony of an "expert" on the likelihood of confusion in the security management industry. That is not something which Dr. Frishberg, who has extensive training and experience as an economist but none whatsoever in security management, is qualified to do.
Dr. Frishberg's analysis does not rest upon economic analysis or a comparison of sales (because defendant deemed that unnecessary after hearing plaintiff's witnesses' testimony), but upon assumptions about the security management consumer, basic common sense principles, and empirical research. As stated above, Dr. Frishberg has no experience or specialized knowledge of the security management industry, and thus, unlike plaintiff's experts, can say nothing more than a layperson could about the way purchasing decisions are made in that market. Thus, his assumptions about the security management industry are not within his expertise and are not helpful to this trier of fact. In other words, Dr. Frishberg's assumptions about this industry do not derive from his specialized training or experience and are essentially the equivalent of a lay person's. Moreover, the economic principles which Dr. Frishberg states in his report — for example, the notion that there is not likely to be confusion because these are expensive products and people pay careful attention when purchasing expensive products — may be true, but they are common sense principles for which expert testimony is not necessary.
Nor is Dr. Frishberg's empirical research compelling. Dr. Frishberg's survey evidence is hearsay — no more than a summary and distillation of extrajudicial declarations offered to prove the truth of the matters asserted in those declarations. See Pittsburgh Press Club v. United States, 579 F.2d 751, 755-57 (3d Cir. 1978). These surveys do not fit into any recognized exception to the hearsay rule. For example, the statements are not "present sense impressions" or statements or presently existing state of mind, but rather recollections of past events. See Fed.R.Evid. 803(1) and (3). Moreover, because Dr. Frishberg has provided no basis for the decision to contact only resellers and not end-users, what individuals were contacted, the questions asked, and other methodological factors, this Court has nothing upon which to decide that the empirical research has "circumstantial guarantees of trustworthiness" which would allow this testimony to come in under the general catch-all exception of Rule 803(24). See Pittsburgh Press Club, 579 F.2d at 757-58.
If Dr. Frishberg's qualifications embraced the security management industry and market place, and if his methodological approaches were reliable, then, despite the fact that the empirical research is hearsay, Dr. Frishberg would still be permitted to testify and speak about the results of his research if the statements were of the kind normally employed by experts in the field of economics. Fed.R.Evid. 703; see also Paoli, 35 F.3d 717, 747-49. If this Court had before it evidence that economists normally rely upon empirical research of the sort conducted by Dr. Frishberg, then this Court could admit Dr. Frishberg's testimony and plaintiff could conduct cross-examination and argue at trial that the research is flawed or the opinions are unpersuasive. However, all the Court has before it is defendant's counsel's unsupported assertion in defendant's opposition brief that economists normally rely upon statements such as the ones Dr. Frishberg and his staff collected, and this unsupported assertion is simply not credible on its own. Although survey evidence can in suitable cases be admitted into evidence, this particular evidence is fundamentally flawed and not useful, since, as discussed above, unknown questions were asked of resellers, not end users, selected by an unrevealed process, collecting anecdotal hearsay, in a field with which the expert is largely unfamiliar.
Having decided that Dr. Frishberg's testimony is inadmissible both because it does not lie within his stated area of expertise and because it is not helpful to the trier of fact this Court need not discuss plaintiff's complaint that Dr. Frishberg violated Fed.R.Civ.P. 26 by not stating enough of the bases for his opinion.
Defendant simply has not met its burden of proving by a preponderance of the evidence that Dr. Frishberg's background as an economist makes him qualified to testify to lack of confusion in the security management market or that his common sense economic principles and empirical research are reliable and helpful to this Court, who will be sitting as the trier of fact at trial. Plaintiff's motion in limine will be granted, and defendant will be precluded from offering Dr. Frishberg's testimony at trial.
III. Conclusion
For the foregoing reasons, defendant's motions in limine to exclude the expected testimony of Ira S. Somerson, Dr. Robert D. McCrie, David L. Johnston, Peter E. Ohlhausen, and Dr. Sanford Sherizan will be denied. Plaintiff's motion in limine to exclude the testimony of defendant's expert Dr. Dov Frishberg will be granted. The accompanying Order is entered.
ORDER
This matter having come before the Court upon the parties' motions in limine; and the Court having considered the submissions of the parties; and for the reasons stated in the Opinion of today's date;
IT IS this day of May 1999 hereby
ORDERED that the defendant's motion in limine to exclude the testimony of plaintiff's experts, Ira S. Somerson, Dr. Robert D. McCrie, David L. Johnston, Peter E. Ohlhausen, and Dr. Sanford Sherizan be, and hereby is, DENIED; and it is further
ORDERED that the plaintiff's motion in limine to exclude the testimony of defendant's expert, Dr. Dov Frishberg, be, and hereby is, GRANTED.