3:15-cv-00084
W.D. Ky.Nov 4, 2016Background
- Jewelry Candles, LLC (JC) formed after founder Enaiho operated an online candle business; JC holds a registered composite mark and applied for other word marks. Louisville Marketing, Inc. (LMI) and its owner Buse registered the domain jewelryincandles.com after meeting with Enaiho and later launched a competing business under the name "Jewelry in Candles."
- LMI sued for a declaratory judgment that "Jewelry in Candles" is a generic term; JC counterclaimed for trademark infringement, unfair competition, and sought injunctive relief.
- JC disclosed two expert witnesses: Scott Clark (internet marketing/SEO expert) and Dr. John Peloza (consumer survey expert). LMI moved to exclude Clark and to exclude/strike Peloza’s reports.
- District court applied Rule 702 and Daubert gatekeeping principles to assess qualification, methodology, and whether opinions were speculative or within lay understanding.
- Court excluded portions of Clark’s report as speculative (opinions about state of mind, that conduct was "highly unusual," and genericity conclusions) and excluded Clark entirely as a witness for the remaining opinions.
- Court denied LMI’s motions to exclude Dr. Peloza’s original and rebuttal reports, admitting the surveys despite methodological/universe flaws so the deficiencies could be addressed via cross-examination and weight.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Admissibility / qualification of Scott Clark as expert | Clark lacks expertise in trademarks, psychology, business ethics, and industry standards; opinions speculative | Clark is a qualified internet marketing consultant and may opine on how an experienced consultant would interpret the communications and domain history | Court: Clark is qualified for limited marketing-related testimony but key portions are excluded as speculative; overall Clark's report excluded where methodology/opinion unsupported |
| Clark's opinion on Buse's intent/state of mind and "successful startup" assessment | Such testimony impermissibly opines on subjective intent and is speculative | JC says Clark offers objective assessment of how an experienced consultant would view the information | Court: Excluded — opinions about state of mind and speculative views of success not admissible |
| Clark's industry-standard opinions re: registering domain names | Clark cannot identify objective industry standards; conclusions ("highly unusual") are ipse dixit | JC concedes ethical characterization but defends "highly unusual" as industry observation based on experience | Court: Excluded — too great an analytical gap; speculative and unverifiable |
| Admissibility of Dr. Peloza's consumer surveys (original and rebuttal) | Universe too broad; sample and methods flawed; questions not aligned with preferred Thermos/Teflon models; results unreliable | JC: general public is appropriate universe for genericness inquiry; methodological flaws go to weight, not admissibility; rebuttal timely and responsive | Court: Denied exclusion. Surveys admitted despite flaws (overbroad universe, sample size, model variations); defects go to weight and cross-examination. Rebuttal report allowed as responsive (with some scope concerns reserved for cross-examination). |
Key Cases Cited
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (gatekeeping standard for expert admissibility under Rule 702)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (Daubert gatekeeping applies to all expert testimony)
- Gen. Elec. Co. v. Joiner, 522 U.S. 136 (courts may exclude expert opinions that rely on unsupported extrapolation)
- McLean v. Ontario, Ltd., 224 F.3d 797 (expert opinions must be more than subjective belief/speculation)
- Leelanau Wine Cellars, Ltd. v. Black & Red, Inc., 452 F. Supp. 2d 772 (survey admissibility factors and standards in trademark cases)
- Woods v. Lecureux, 110 F.3d 1215 ( Sixth Circuit authority regarding exclusion of certain trademark-related testimony)