Betterbox Communications, Ltd. v. BB Technologies, Inc.; Black Box Corporation

This is an appeal in a declaratory judgment action

commenced by Betterbox Communications, Ltd.

("Betterbox"), against Black Box Corporation ("Black Box")

and a wholly owned subsidiary. Betterbox and Black Box

sell competing computer-related products through catalog

marketing. In 1995, Betterbox, a British company, applied

to the United States Patent and Trademark Office ("PTO")

for trademark registration based on its intended use of the

Betterbox name and box design in the United States. Black

Box objected that Betterbox's name and box design

infringed on its trademarks. Betterbox then brought this

action in federal court seeking a declaration of no

infringement, and Black Box counterclaimed for trademark

infringement, unfair competition, and trademark dilution.

After a trial, the jury returned a verdict for Betterbox, and

the District Court entered judgment accordingly on

November 16, 2000. In post-trial orders, the District Court

denied Black Box's motions for a new trial under Fed. R.

Civ. P. 59(a) and for relief from judgment under Fed. R. Civ.

P. 60(b). This appeal followed.

On appeal, Black Box argues that the District Court

erred in admitting the testimony of Betterbox's expert

witness, in admitting evidence of Betterbox's trademark

registrations in foreign countries, and in refusing to grant

relief from the judgment based on newly discovered

evidence. We review these rulings for an abuse of

discretion. See In re Cendant Corp. Prides Litig., 234 F.3d

166, 170 (3d Cir. 2000); Abrams v. Lightolier Inc., 50 F.3d

1204, 1213 (3d Cir. 1995). We affirm.

I.

Betterbox and Black Box each sought to introduce the

testimony of an expert witness on the following question:

whether there was a likelihood that consumers would be

confused by the Betterbox and Black Box marks. Each side

also filed a pre-trial motion in limine to exclude the other's

expert, but the District Court permitted both experts to

testify.

A.

Black Box argues that the District Court erred because

Betterbox's expert, John Schulte, lacked the qualifications

needed by an expert. The admissibility of expert testimony

is governed by Federal Rule of Evidence 702, which

requires an expert witness to have "specialized knowledge"

regarding the area of testimony. "The basis of this

specialized knowledge ‘can be practical experience as well

as academic training and credentials,' " and"[w]e have

interpreted the specialized knowledge requirement

liberally." Waldorf v. Shuta, 142 F.3d 601, 625 (3d Cir.

1998) (citation omitted). However, " ‘at a minimum, a
proffered expert witness . . . must possess skill or

knowledge greater than the average layman . . . .' " Id.

(citation omitted). See also, e.g., Elcock v. Kmart Corp., 233

F.3d 734, 741 (3d Cir. 2000).

In the present case, the District Court did not abuse its

discretion in ruling that Schulte's practical experience

sufficed under this liberal test. Schulte had worked actively

for 20 years in the field of direct marketing and mail-order

catalogs. He had extensive experience in "marketing and
the use of logos and how they are used in the marketplace

as far as advertising." Appendix at 317. As the chairman of

the National Mail Order Association, he had consulted with

the Association's members on how to market through

catalogs, had edited the Association's publication Mail

Order Digest, and had reviewed and analyzed about 10,000

catalogs in the previous five years. He had published a

variety of articles on direct marketing, had taken courses in

graphic design, and had designed corporate logos. Schulte

even had about four years' experience as the owner of a

business involved in the direct marketing of computer

products.

Black Box argues that Schulte's experience with respect

to the marketing of computers was insufficient because he

had worked in that specific field for only four years and

because that experience had preceded the time of the trial

by eight years. See Appellant's Br. at 17. This argument is

not persuasive. Four years of experience at the helm of a

company is substantial, and Black Box has not explained

why the passage of eight years between that period and the

commencement of the trial diminished Schulte's

qualifications. If Schulte had been called to testify as an

expert regarding a field of knowledge that had changed

greatly during the past few years, Black Box's argument

might have force, but Black Box has not called to our

attention any such changes regarding the question whether

the competing marks in this case created a likelihood of

confusion.

Black Box also faults Schulte's experience because it did

not concern "the catalog marketing of electronic data

communications and computer connectivity products." Id.

at 18. As noted, however, Schulte had extensive experience

in catalog marketing, as well as four years of experience

marketing computer products. Black Box has not pointed

out anything that is fundamentally different about the

catalog marketing of "data communications and computer

connectivity products" as opposed to other computer

products. Id. Thus, Schulte's lack of experience in

marketing the precise type of computer components sold by

these companies does not establish that the District Court

abused its discretion in ruling that his qualifications met

the standard of Rule 702.

Black Box argues, finally, that Schulte did not have

experience in evaluating the so-called Lapp factors that we

have found to be useful in determining whether there is a

likelihood of confusion between marks. See Interspace Corp.

v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983); A & H

Sportswear, Inc. v. Victoria's Secret Stores, Inc. , 237 F.3d

198, 210-15 (3d Cir. 2000). These factors, however, are not

mandatory; they "are meant to be tools, not hurdles."

A & H Sportswear, 237 F.3d at 214. Schulte's experience

plainly related to a number of the Lapp factors, namely,

factors (1), (3), (7), (8), and (9). For all these reasons, we see

no basis for disturbing the District Court's determination

regarding Schulte's qualifications.

B.

Black Box also argues that Schulte should not have been

allowed to testify as an expert because his methodology was

deficient. In Daubert v. Merrell Dow Pharms., Inc., 509 U.S.

579, 592-93 (1993), the Supreme Court held that under

Rule 702 the trial judge must make "a preliminary

assessment of whether the reasoning or methodology

underlying the [expert's] testimony is scientifically valid."

The Court noted factors relating to the reliability of an

expert's scientific methodology, including whether the

theory or technique "can be (and has been) tested," whether

it "has been subjected to peer review and publication,"

whether the known or potential error rate is acceptable,

and whether it is generally accepted within a relevant

scientific community. Id. at 593-94. But the Court stressed

that "[t]he inquiry envisioned by Rule 702 is. . . a flexible

one." Id. at 594.

In Kumho Tire Co. v. Carmichael, 526 U.S. 137, 149-50

(1999), the Court held that the basic gatekeeping function

described in Daubert applies to all expert testimony, not

just "scientific" testimony. But the Court added that in

cases not involving scientific testimony, " ‘[t]he factors

identified in Daubert may or may not be pertinent in

assessing reliability, depending on the nature of the issue,

the expert's particular expertise, and the subject of his

testimony.' " Id. at 150 (citation omitted). In such cases, the

Court said, "the relevant reliability concerns may focus
upon personal knowledge or experience." Id . In addition,

the Court made it clear that a court of appeals is to apply

an abuse-of-discretion standard, not only to a trial court's

ultimate decision to admit or exclude expert testimony, but

to "the trial court's decision about how to determine

reliability." Id. at 152.

In the present case, Schulte's testimony was based on his

"personal knowledge or experience," Kumho Tire, 526 U.S.

at 150, rather than a methodology that satisfies the

Daubert factors. Schulte testified that he examined the
companies's catalogs, that he informally surveyed

colleagues, and that he evaluated the catalogs' target

market. In his report, he stated that he focused on the

following factors: "[t]he perception of the names," "[t]he

sophistication of the target audience/market,""[t]he

graphic logo design," and "[t]he presence in the market

place and the look and feel of the catalogs." Appendix at 86.

Although he did not consider all of the factors that we

noted in A & H Sportswear, his analysis tracked many of

them.

* * *

Click the case caption above for the full
text of the Court's opinion.

Affirmed

John Schulte, trademarks

Unavailable

None