Uncommon, LLC v. Spigen, Inc.
Uncommon, LLC v. Spigen, Inc.
Opinion
The word "capsule" can describe many things-a pharmaceutical pill, a space pod, or a short synopsis, for example. What about a cellphone case?
The U.S. Patent and Trademark Office has given conflicting answers. It has, on a few occasions, found that "capsule" was "merely descriptive" of cellphone cases, a finding that precludes the mark from registration on the Principal Register. Yet the Office has also found otherwise and allowed one manufacturer-Uncommon, LLC-to register "capsule."
Rival case manufacturers still use the term, though. Uncommon sued one of those manufacturers, Spigen, Inc., for trademark infringement and unfair competition. In discovery, Spigen produced a survey to prove that consumers did not associate "capsule" with Uncommon's cases, and it disclosed the person who conducted the survey as a "non-testifying expert." That was a problem: without foundational expert testimony to explain the survey's methodology, it was inadmissible. But when the litigation reached summary judgment, the district court excused Spigen's error. It then granted Spigen summary judgment on the merits.
We affirm. Spigen's disclosure was inaccurate, but calling it harmless, as the district court did, was reasonable. With the survey, there was no genuine issue of material fact as to the mark's invalid registration. Nor was there an issue of fact regarding the unlikelihood of consumer confusion. Summary judgment was therefore appropriate.
I. Background
Uncommon and Spigen are manufacturers and retail sellers of cellphone cases. Starting in December 2009, Uncommon began marketing a line of cases it called "CAPSULE." Its first sale came in July 2010, and Uncommon applied to register the mark with the Patent Office in September 2012. In May 2013, the Patent Office issued Trademark
That registration was not the first or last time the Patent Office would address the mark "capsule" for cellphone cases. In July 2008, the Office had issued a "capsule" registration to Vatra, Inc., which had claimed to first use the term in September 2007. (The Office later canceled Vatra's trademark in February 2015, after Vatra failed to certify its continued use.) Capsule Case Corp. likewise attempted to register "CAPSULE CASE" in 2017, though the record does not say what came of that application.
*415 Spigen joined the "capsule" ranks relatively early, in 2010. It sold its first "capsule"-branded case in June of that year, when, all agree, Spigen was unaware of Uncommon's trademark. Spigen then grew the brand into a line: the "Capsule-family" cases. The family includes the "Capsule Capella," the "Rugged Capsule," the "Capsule Ultra Rugged," the "Capsule Solid," and the "Air Capsule" cases.
Spigen applied to register the family of marks between 2014 and 2016. It was able to register three of those marks, "Capsule Capella," "Capsule Solid," and "Air Capsule." But for both "Capsule Solid" and "Capsule Capella" the Office decided that the marks were descriptive, at least in part. "Capsule Solid" was therefore put on the Supplemental (as opposed to Principal) Register, and the Office required the "Capsule" in "Capsule Capella" to be disclaimed by Spigen as descriptive and nonexclusive. The Office initially declined to register the other two marks, "Rugged Capsule" and "Capsuled Ultra Rugged," concluding that both were descriptive and likely to be confused with Uncommon's mark. These two registration applications have been suspended pending this litigation.
Uncommon's and Spigen's "capsule" cases have more in common than the name. Both sell their cases online, through their own websites and online retailers, like Amazon and eBay; both have a national market; both use the "capsule" name alone and in conjunction with other descriptors; and both use dark-colored, sans-serif font for the mark on their packaging. But there are differences too. Uncommon's cases can be customized with personal images, or they come "ready-made" with colorful designs or artwork. Spigen's cases cannot be customized and are generally solid in color. Uncommon, moreover, does not generally make cases for iPhones after the 5/5s generation (as far as this record is concerned); Spigen does-and, unlike Uncommon, it makes cases for Samsung cellphones as well. The two companies' packaging is also different, as shown by the record examples below.
*416 As illustrated, Uncommon's cases generally come in some combination of a blue, grey, white, and/or black package. Spigen's come in a distinctive orange and black package.
Seeing enough similarities, however, Uncommon filed this suit in December 2015, alleging that Spigen's use of "capsule" constituted trademark infringement and unfair competition under federal and state law.
See
The case entered discovery. Spigen disclosed its experts to Uncommon in December 2016. There were two: Doug Bania, who would testify to the lack of confusion, the descriptiveness of Uncommon's mark, secondary meaning, and damages; and Kirk Martensen, who, according to Spigen's disclosure, was a "non-testifying expert who will conduct a consumer survey" that may be relied upon by Bania. The disclosure added that Martensen may "be called to testify on the methodology of the survey if needed."
Spigen later sent Uncommon a two-page summary of Martensen's credentials. Bania's report, produced shortly after, relied extensively on Martensen's survey, which was attached to the report with its underlying data. In his deposition, Bania admitted that he was not an expert on survey methodology. Uncommon never asked to depose Martensen.
The parties cross-moved for summary judgment in June 2017. Spigen relied on the Martensen survey in its opening. Uncommon responded that the survey could not be considered at summary judgment, primarily because no expert could testify to its methodology. Spigen tried to fill that evidentiary gap in its reply. It submitted a declaration from Martensen explaining the survey's methodology-information which, by and large, had been disclosed in the earlier production of the survey itself. Uncommon moved to strike the declaration as untimely and inadequate. It did not seek leave to file a surreply responding on the merits.
The district court ruled in March 2018. It held that Spigen's failure to disclose Martensen as a testifying expert was harmless under Federal Rule of Civil Procedure 37(c)(1). The court further found that the survey was sufficiently reliable and supported by the declaration. Turning to the merits, the district court disposed of the case on two alternative grounds. First, the court found no issue of material fact as to whether "capsule" was descriptive, per the word's dictionary definitions, and it found no issue as to whether the mark lacked a secondary meaning. The court therefore canceled the registration, which necessarily defeated Uncommon's infringement and unfair-competition claims. Second, the court decided that there was no issue of fact regarding the lack of confusion posed by Spigen's use of "capsule," which also defeated both of Uncommon's claims.
The district court accordingly entered summary judgment in Spigen's favor. Uncommon appeals.
II. Discussion
Uncommon submits that the district court erred in three ways: by considering the Martensen declaration; by canceling the mark's registration; and by deciding, alternatively, that there was no likelihood of confusion between Uncommon's cases and Spigen's. Because the Martensen declaration *417 colors the summary-judgment analysis, we start there.
A. The Martensen Survey and Declaration
At summary judgment, Spigen relied on a piece of evidence familiar in trademark litigation-a consumer survey.
See generally
Robert C. Bird and Joel H. Steckel
,
The Role of Consumer Surveys in Trademark Infringement: Empirical Evidence from the Federal Courts
,
To be admissible, a consumer survey almost always requires expert testimony. This is because conducting a survey entails expertise and the exercise of professional judgment.
See
Muha v. Encore Receivable Mgmt., Inc.
,
Because Spigen's survey evidence required expert testimony, Spigen had to comply with Federal Rule of Civil Procedure of 26(a). It did not. Rule 26(a)(2) obligates parties to timely disclose any expert who may testify and to provide a related expert report. Until the back half of its summary-judgment briefing, Spigen treated Martensen like a non -testifying expert. It designated him as such and failed to supply a formal, written report on his behalf.
The district court, however, excused Spigen's disclosure failures under Rule 37. Rule 37(c)(1) states that if a party fails to comply with Rule 26(a), the evidence is excluded "unless the failure was substantially justified or is harmless"-and the district court thought Spigen's failures were harmless.
See
Karum Holdings LLC v. Lowe's Cos., Inc.
,
Spigen was remiss in framing Martensen's role, but the district court's excusal was not an abuse of discretion. There was ample reason to conclude, as the district court did, that Uncommon did not suffer any surprise. Spigen timely disclosed Martensen's survey with its underlying data; a two-page document summarizing Martensen's credentials; and Bania's report, which relied heavily on the survey.
*418 And the later-submitted Martensen declaration added little to those substantial disclosures. The survey itself explained Martensen's methodology and reliance on accepted research principles.
Spigen therefore supplied (in some form) nearly all the information Rule 26(a)(2) requires, with two notable exceptions. The first, of course, is the designation of Martensen as a testifying expert, although Uncommon knew that Martensen's testimony was on the table. The disclosure stated that he may "be called to testify on the methodology of the survey if needed." The second piece of information, which was included in the declaration but not the survey, was the fact that the survey employed a " Squirt format," as opposed to an " Eveready " one. See generally McCarthy on Trademarks § 32:173.50 (explaining the difference between the two types of surveys). Uncommon, however, does not explain why this distinction matters here or how the revelation caught it off guard.
Spigen's failures also caused no disruption to the proceedings. Perhaps there would have been a minor one had Uncommon sought to extend discovery or depose Martensen-but it never made either request. (More on this below.) And there was no bad faith on Spigen's part. As the district court explained, Spigen's failures resulted from a misunderstanding about how to admit certain expert evidence. It was not a "tactic of surprise."
Sherrod v. Lingle
,
The remaining considerations, prejudice and the ability to cure it, present closer calls. Uncommon believes that the misleading disclosure harmed it in a few ways: Uncommon could not question Martensen about his methodology; it missed its chance to find a rebuttal expert; and it could not respond to the substance of the survey, having believed that it was inadmissible. That view is slightly overstated. The "non-testifying expert" designation did not prohibit Uncommon from deposing Martensen. Any expert who may testify at trial can be deposed, Fed. R. Civ. P. 26(b)(4)(A), and the fact that Bania relied so heavily on Martensen would likely have made Martensen fair game for discovery. Uncommon also had reason enough to order a survey of its own, knowing, as it must have, that Spigen's survey was a centerpiece of its case. And the fact that Uncommon believed that the survey was inadmissible in its then-form did not preclude Uncommon from responding to its substance during summary judgment. Litigants are permitted alternative arguments, after all.
But set all that aside and assume real prejudice. The question in this case becomes: prejudice inflicted by whom? No doubt Spigen was to blame in the first instance, but Uncommon seems to have adopted a strategic aversion to self-help.
Again, Uncommon knew the survey was key to Spigen's case. It also knew after Bania's deposition that Spigen would have an evidentiary gap in both admitting the survey and defending Bania's reliance on it. It did not flag the error for Spigen, which was fair; litigation is adversarial. But it also made no effort to conduct further discovery into the survey's methodology or Martensen. Instead, Uncommon awaited summary judgment to argue that the survey and Bania's reliance on it were inadmissible. And when Spigen, in reply, offered the Martensen declaration, Uncommon moved only to strike. It forewent the obvious, alternative option: request additional expert discovery or, at a minimum, a deposition of Martensen.
See
*419
David
,
Rule 37, however, provides recourse for parties actually harmed by a litigant's noncompliance with disclosure obligations. It does not safeguard a party's decision to sense an error, seize on it, and then, when it is resolved, claim incurable harm in the face of apparent remedies. Litigation is adversarial, not a game of gotcha.
We should be clear: Spigen could have been faulted for its Rule 26 failures. Parties who fall short on their disclosure obligations generally lose out on their expert evidence, as Rule 37(c) and plenty of caselaw make plain.
See, e.g.
,
Karum
, 895 F.3d at 951-53 ;
Tribble
,
B. Summary Judgment Merits
With the Martensen survey in play, we can turn to the merits. Uncommon's claims for trademark infringement and unfair competition both require (1) that Uncommon's mark be validly registered and (2) that Spigen's use be likely to cause confusion among consumers.
H-D Mich., Inc. v. Top Quality Serv., Inc.
,
We review those decisions de novo. We construe the facts and draw all reasonable inferences in Uncommon's favor.
Arlington Specialties, Inc. v. Urban Aid, Inc.
,
1. The Trademark's Validity
For a mark registration to be valid, it must be distinctive in one of two ways.
See
Wal-Mart Stores, Inc. v. Samara Bros.
,
First, the mark can be " inherently distinctive," meaning, it identifies the maker of a product, but it does not describe the product itself.
*420
Two Pesos, Inc. v. Taco Cabana, Inc.
,
Second, and alternatively, descriptive terms can
become
distinctive by acquiring a "secondary meaning," that is, the mark has grown distinctly and "uniquely associated with the original seller."
Custom Vehicles
,
We, of course, do not write on a clean slate in deciding if Uncommon's "capsule" trademark is valid. The Patent Office granted it, and that registration is prima facie evidence of validity.
a. Descriptive or Suggestive?
The first and main dispute is whether "capsule" describes, or instead suggests, cellphone cases. Inherent distinctiveness is a question of fact, and summary judgment is appropriate only if, reading the record in Uncommon's favor, no reasonable factfinder could decide for it.
See
Sands, Taylor & Wood Co. v. Quaker Oats Co.
,
A mark is descriptive when "it describes the product category to which the brand belongs."
Custom Vehicles
,
In contending that "capsule" is suggestive, Uncommon trumpets its presumption of validity. But the presumption is just that-a presumption, open to rebuttal. And Spigen has carried its burden not only to demonstrate that "capsule" is indeed descriptive, but also to show that there is no material issue of fact on the question.
5
See, e.g.
,
Liquid Controls
,
The line between descriptiveness and suggestiveness can be difficult to draw. But a few markers lead the way.
See
McCarthy on Trademarks § 11:66. First, we can look to how, and how often, the relevant market uses the word in question.
See
Bliss Salon Day Spa v. Bliss World LLC
,
Examples illustrate why. In
Bliss Salon Day Spa
, we explained that even if the mark "BLISS" did not depict haircare products as a linguistic matter, the fact that many players in the beauty-care market use "BLISS" in association with their products and services meant that the mark was functionally descriptive.
Uncommon wants us to draw a different inference, but it is neither reasonable nor supported by the record. Uncommon believes that the market's use of "capsule" can be explained by its competitors' freeloading on Uncommon's good reputation with consumers. There is no evidence of that good reputation, let alone evidence of copying, and Uncommon has conceded that Spigen marketed its "capsule" cases without knowing about Uncommon's use. Uncommon needs more than conjecture to survive summary judgement.
Carmody v. Bd. of Tr. of Univ. of Ill.
,
Uncommon makes another, related argument. It submits that in the age of Amazon, eBay, and Google, in which consumers shop via search bars, sellers string together words in their product names to ensure the most hits. Uncommon gives a good example: the "iPhone 6 Case, Accez(SoftFlex) Capsule Premium Flexible Soft TPUSlim Case for iPhone 4.7 (Yellow)." As a result of this practice, Uncommon says, we should give little weight to the fact that competitors use the mark. That argument does not track, and we need to look no further than Uncommon's example to see why. Setting aside "Accez" (the seller's name), "capsule" is listed with the terms SoftFlex, premium, flexible, soft, and TPUSlim-all of which are unquestionably descriptive. (TPU means thermoplastic polyurethane, a durable material.) Again, the market's use of the term demonstrates its descriptiveness.
A second, and more common, way courts determine if a mark is descriptive is to employ the so-called degree-of-imagination test. "[I]f a mark imparts information directly it is descriptive. If it stands for an idea which requires some operation of the imagination to connect it with the goods, it is suggestive."
Platinum Home Mortg.
,
As just alluded to, courts also look to dictionaries to see if a mark is descriptive.
See, e.g.
,
Door Sys.
, 83 F.3d at 171 ;
Liquid Controls Corp.
,
Uncommon does not respond by arguing that these definitions are obscure, functionally irrelevant, or out-of-date. It instead faults the district court for relying too heavily them. On that score, we agree-the district court, consistent with our previous warnings, needed to do more than cite the dictionary to find descriptiveness. But there is no prohibition on using dictionaries as a piece of the puzzle. So if, hypothetically, consulting dictionaries revealed that they do
not
define "capsule" in a manner that so easily fits cellphone cases, Uncommon might have evidence in its favor. A factfinder could potentially infer from such omissions that "capsule" does not describe cellphone cases.
Cf.
Liquid Controls Corp.
,
Another method is worth addressing. Courts occasionally examine third-party registrations to determine descriptiveness. See McCarthy on Trademarks § 11:20. We decline to do so here. The Office granted Vatra's initial registration for "capsule," as it did Uncommon's. But more often than not, and more recently, it has decided that "capsule" is "merely descriptive," at least according to the record here. Spigen encourages us to heed those latter decisions, but given the internal inconsistency, we find little that can be reasonably gleaned from the Office's registration decisions.
Yet the remainder of the markers-the extent of use, the imagination test, and capsule's definition-show no issue of fact as to whether the mark is descriptive. Against the weight of that evidence, Uncommon offers little.
By way of argument, Uncommon presses that the mark is suggestive because connecting it to a cellphone case requires some imagination. It offers only its own insistence for that proposition, and we have already explained why it is incorrect. Uncommon further argues that because "capsule" could describe an array of products, it cannot be descriptive. We have rejected that thinking before. A term need not "bring to mind the product in question" to be descriptive, nor must it "depict the [product] itself."
Quaker Oats
,
By way of evidence, Uncommon provides even less. It points to the Martensen survey, which shows that consumers do not often associate "capsule" with cellphone cases (only 14 percent of the time), and Uncommon submits that this evidence can show that "capsule" is not descriptive. This argument treads the same mistaken path we just corrected. A descriptive mark need not immediately invoke in the consumer's mind the
product
itself; it must directly convey a
characteristic
of the product.
Spigen has carried its burden to defeat Uncommon's presumption of inherent distinctiveness and demonstrated that there is no issue of material fact regarding the descriptiveness of the "capsule" mark. No *424 reasonable finder of fact could conclude otherwise based on this record.
b. Secondary Meaning?
Because "capsule" is descriptive, it must have a secondary meaning to be validly registered. A secondary meaning is "a link in the minds of consumers between the marked item and its source."
Jay Franco & Sons, Inc. v. Franek
,
As an initial matter, the parties and the district court appear to believe that Uncommon's presumption of validity extends to secondary meaning. The Lanham Act extends "one of two" presumptions-either that the mark is inherently distinctive
or
that it has acquired distinctiveness.
Packman
,
To the merits, there are many ways to prove a secondary meaning or lack thereof: amount of advertising, sales volume, length and manner of use, or consumer testimony, for example.
Platinum Home Mortg.
,
Uncommon challenges this conclusion on appeal. But it did not press the issue at the district court. Uncommon presented no affirmative evidence of secondary meaning, and it mentioned the issue just once in the course of its summary-judgment briefing-when it asserted, "evidence of secondary meaning is unnecessary because the mark is not descriptive." That amounts to waiver.
See, e.g.
,
Puffer v. Allstate Ins. Co.
,
Even forgiving waiver, though, the decision not to grapple with secondary meaning in the district court leads to another problem for Uncommon-it cannot show an issue of fact on the question. It is true, as the district court recognized, that there is not much to be found in this record regarding the amount of sales or advertising. We can also assume that the manner and length of use inures in Uncommon's favor. Still, on this record, no factfinder could reasonably decide that a substantial number of consumers think of "capsule" as the product of one cellphone-case maker.
See
Packman
,
Uncommon nevertheless tries to make do with the survey, arguing that it in fact supports a secondary meaning. It submits, for example, that because "capsule" had a similar amount of consumer recognition as a few other brands, it had "reached a level of distinctiveness." That conclusion does not follow, though, because none of the "capsule" comparators had much recognition either. See McCarthy on Trademarks § 32:190 (explaining that courts have recognized consumer recognition between 50 percent and 37 percent as sufficient to show secondary meaning, and lesser percentages are generally insufficient). Uncommon also submits that the survey wrongly lumps "capsule" into the list of other brand names (like Otterbox, Uncommon, and Spigen), when "capsule" is really a product. Yet the point remains: the survey demonstrates that a substantial number of consumers do not associate "capsule" with cellphone cases.
We therefore affirm the district court's decision to invalidate the contestable registration and to grant Spigen summary judgment.
See
Specht v. Google Inc.
,
2. Likelihood of Confusion
Alternatively, the district court granted Spigen summary judgment because it saw no likelihood of confusion in Spigen's use of the mark. This, too, is a question of fact, appropriate for summary-judgment resolution only if no reasonable factfinder could decide for Uncommon.
CAE, Inc. v. Clean Air Eng'g, Inc.
,
To decide if there is a likelihood of confusion, we ask whether consumers who might use either product would likely attribute them to a single source.
Bd. of Regents of Univ. of Wis. Sys. v. Phx. Int'l Software, Inc.
,
Applying these factors, we agree with the district court that there is no issue of material fact as to the unlikelihood of confusion. To start, marks are troublingly
*426
similar if a consumer viewing one party's mark would likely associate the product with the other party's product.
AutoZone, Inc. v. Strick
,
The parties here use "capsule" in somewhat similar ways. Both generally use dark-colored, sans-serif font, and both use the mark alone and in combination with other modifiers.
See
AutoZone
,
The next few factors also slightly favor Uncommon. As to product similarity, Spigen concedes that the products are similar-both are cellphone cases for smart phones. The area and manner of use are also similar, although barely. Uncommon emphasizes that both parties sell nationwide through online retailers, like Amazon and eBay. We accept that as true. But the inference to which Uncommon is entitled is not a strong one. Selling through Amazon and eBay is ubiquitous, and it is hard to devise a more generalized customer base than nationwide cellphone owners.
Regarding consumer care, if a product is widely accessible and inexpensive it follows that consumers will exercise little care in discriminating among product makers.
Sorensen
,
The remaining factors, however, decisively favor Spigen. The "strength" of a mark usually refers to its distinctiveness.
E.g.
,
Sorensen
,
*427 Uncommon also has presented no evidence of actual consumer confusion, although, as Uncommon correctly notes, such evidence is not a hard-and-fast requirement. CAE , 267 F.3d at 686. Additionally, there is no evidence that Spigen uses "capsule" in an effort to pass off its cases as Uncommon's. Spigen has used the mark for almost as long as Uncommon has, and Uncommon concedes that Spigen was unaware of Uncommon's trademark before this lawsuit.
The gist of Uncommon's counterarguments is simple: the district court wrongly used the summary-judgment motions to weigh evidence and make factual findings. That position misconstrues what the district court did. The court, as we have instructed, asked whether a reasonable factfinder could decide that there was a likelihood of confusion in light of all the record evidence. In doing so, it weighed the seven factors-not the evidence.
See
Sorensen
,
We agree with the district court's ultimate conclusion. The marks are, at most, barely similar, and they are too weak to confuse any purchaser, especially in the absence of evidence of any intentional freeloading. On this record, summary judgment was therefore appropriate.
III. Conclusion
For these reasons, we AFFIRM the district court's judgment.
On appeal, Uncommon focuses on federal law and does not address its state-law claims separately. We will do the same, and so this opinion will not examine state law further.
Uncommon also appears to argue that the Martensen declaration did not adequately provide support for the survey. As briefed, the argument is terse, free of legal citation, and vague. It is therefore waived.
See, e.g.
,
Crespo v. Colvin
,
Uncommon's registration issued in May 2013, and Spigen counterclaimed in February 2016. Because five years of use had not passed between the registration and Spigen's counterclaim, Uncommon's registration is contestable and subject to invalidation by a court.
See
The parties believe that Uncommon gets "two of two" presumptions-that even if Spigen can rebut the presumption of non-descriptiveness, there is also a presumption of secondary meaning. That position is mistaken, for reasons we explain below.
We have said that the presumption is "easily rebuttable, since it merely shifts the burden of
production
to the alleged infringer."
Custom Vehicles
,
Some authorities have criticized this approach.
See
McCarthy on Trademarks § 32:138 ("The Seventh Circuit has been the most negative about recognizing the strength of 'prima facie evidence.' "); Charles L. Cook and Theodore H. Davis Jr.,
Litigating the Meaning of "Prima Facie Evidence" Under the Lanham Act: The Fog and Art of War
,
Neither party asks us to reconsider our standard, and we see no reason to do so in this case. Even if Spigen bears the burden of both production and persuasion, plus its summary-judgment burden, our analysis and conclusion would not change.
Reference
- Full Case Name
- UNCOMMON, LLC, Plaintiff-Appellant, v. SPIGEN, INC., Defendant-Appellee.
- Cited By
- 137 cases
- Status
- Published