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The Hilsinger Co. v. Kleen Concepts, LLC

United States District Court, D. Massachusetts

September 1, 2017

THE HILSINGER COMPANY, Plaintiff,
v.
KLEEN CONCEPTS, LLC, Defendant.

          MEMORANDUM AND ORDER ON DEFENDANT'S MOTIONS FOR PARTIAL SUMMARY, PLAINTIFF'S MOTION TO STRIKE, AND CROSS-MOTIONS TO EXCLUDE EXPERT TESTIMONY

          F. DENNIS SAYLOR IV UNITED STATES DISTRICT JUDGE.

         This is an action for trademark infringement. Plaintiff Hilsinger Company has brought suit against defendant Kleen Concepts, LLC, alleging that Kleen's use of the mark “SHIELDME” in connection with the distribution and sale of cleaning products has infringed Hilsinger's “SHIELD” brand. The complaint alleges claims under the Lanham Act, 15 U.S.C. §§ 1114 and 1125, and for violation of common-law trademark rights.

         There are five motions pending before the Court: (1) defendant's motion for partial summary judgment on certain infringement claims, (2) defendant's motion for partial summary judgment on the claim for false designation of origin, (3) plaintiff's motion to strike defendant's reply to plaintiff's response to defendant's motion for summary judgment on certain infringement claims, (4) plaintiff's motion to strike the expert opinion of Brian M. Sowers, and (5) defendant's motion to strike the expert opinion of Dr. Melissa Pittaoulis.

         For the following reasons, plaintiff's motion to strike will be granted; plaintiff's motion to exclude the expert opinion of Brian M. Sowers will be granted in part and denied in part; and the other motions will be denied.

         I. Factual Background

         Unless otherwise noted, the following facts are undisputed.

         The Hilsinger Company is a corporation based in Plainville, Massachusetts, that sells eyewear and eye-care accessories. (Def. Mot. Partial Summ. J. on Pl. False Designation of Origin Claim SMF ¶ 1, “Def. False Designation SMF”). Hilsinger holds a federal trademark registration for the mark “SHIELD” (Reg. No. 1, 536, 028) in connection with “[o]ptical lens cleaning preparation products.” (Id. ¶ 2; Third Amended Compl. ¶¶ 12-13 “TAC”).

         Kleen Concepts, LLC, is a limited liability company based in Scottsdale, Arizona, that sells lens- and screen-cleaning products, among other things. (Id. ¶ 4).

         A. SHIELDME Branded Products

         Around 2008, Kleen Concepts began selling products using the mark “SHIELDME.” (Russel Dep. 20). It has sold both lens- and screen-cleaning products under that mark. (Def. False Designation SMF ¶ 6; Russell Dep. 119).

         At least some SHIELD and SHIELDME products were sold at Wal-Mart, among other retail stores. (Pl. Resp. to Def. Mot. for Partial Summ. J. on Infringement Claims SMF ¶¶ 5, 11, “Pl. Infringement SMF”). Many of the other facts concerning where SHIELDME products were sold, and to whom they were sold, are disputed. Kleen Concepts contends that its screen-cleaning products were sold in electronics stores, and the electronics departments of “big box stores” such as Wal-Mart. (Def. Infringement SMF ¶ 11; Russell Dep. 120-21). Hilsinger disputes that contention, pointing to deposition testimony by a Kleen Concepts salesperson who stated that the company had “never sold anything” to the electronics division at Wal-Mart. (Walsh Dep. 186-87). Kleen Concepts contends that SHIELDME lens-cleaning products were not sold side-by-side with SHIELD lens-cleaning products; while Hilsinger asserts the opposite. (Fitzgibbon Dep. 14; Def. Resp. to Pl. Mot. to Exclude Ex. 10). The parties further dispute whether the target consumer for SHIELDME products was “very general, ” ranging from anyone who needed to clean anything from “a screen to a lens to a table, ” or whether a more narrow consumer group was targeted by virtue of the packaging. (Def. Rep. to Pl. Infringement SMF ¶ 9).

         Kleen Concepts sells the same liquid cleaning product as both a lens cleaner and a screen cleaner. (Id. ¶ 1). The products differ only in that they are marketed for different purposes. (Id.). Kleen Concepts has advertised lens-cleaning products as capable of cleaning not only “eyeglasses, sunglasses, . . . binoculars, scopes and other lense[s], ” but also “electronic devices . . . and screen materials.” (Pl. Infringement SMF Ex. 12). In addition, some of Kleen Concepts's products are advertised as dual “lens and screen cleaner[s].” (Def. Infringement SMF Ex. 11 at 4). Kleen Concepts contends that very few of its products are sold as dual lens and screen cleaners and that sales of dual-use products account for an insignificant portion of its screen-cleaning product sales. (Def. Rep. to Pl. Resp. to Def. Infringement Mot. for Summ. J. at 5).

         B. KLEENME Branded Products

         In 2015, in response to this litigation, Kleen Concepts introduced the brand “KLEENME.” (Pl. Resp. to Def. False Designation SMF ¶ 6, “Pl. False Designation SMF”). Kleen Concepts has moved for summary judgment as to the claims for products using the KLEENME mark. (Docket No. 236). Hilsinger responded to that motion by stating, correctly, that there is no claim in this case for damages concerning the use of the KLEENME mark.

         C.Made In America” Designation

         Kleen Concepts has advertised and marketed certain screen- and lens-cleaning spray-bottle products as “Made in USA.” (Def. False Designation SMF ¶ 7). Kleen Concepts also marketed some of its products using a red, white, and blue color scheme and depicting images of an American flag. (Pl. False Designation SMF Ex. L). Hilsinger contends that “significant components” of the products of Kleen Concepts that are designated as “Made in USA” were actually manufactured abroad. (TAC ¶ 44).[1]

         In 2013, Wal-Mart announced an initiative to increase its sales of products manufactured in the United States. (Pl. False Designation SMF Ex. HHH). In February 2013, a Kleen Concepts representative sent an e-mail to an associate buyer for the optical department at Wal-Mart that stated, “I wanted to introduce our company to you, we are a large USA manufacturer of cleaning products. . . . We also offer the flexibility of a USA based supply chain!” (Id. Ex. III). In March 2014, that buyer sent an e-mail to another Wal-Mart employee concerning the SHIELDME lens cleaners, stating that they are “made in the USA 100%.” (Pl. False Designation SMF Ex. RRR at Kleen 00004755). The following month, the buyer sent an e-mail concerning SHIELDME products, stating, “[a]s you know Made in the USA is a huge initiative with Wal-Mart. This item [referring to SHIELDME lens cleaning wipes] . . . is designed, manufactured and produced all in Arizona.” (Id. Ex. PPP). She sent a third e-mail to the same effect in September. (Id. Ex. QQQ).

         Between 2013 and 2016, the sales of Hilsinger to Wal-Mart diminished significantly, while the sales of Kleen Concepts to the retailer grew. (Janell Dep. 53-54; Phillips Report at 16). Hilsinger's Chief Financial Officer believes that the company's loss in sales can be attributed to Kleen Concepts's “Made in America” claim, because the two companies' products were otherwise similar. (Janell Dep. 53-54). At his deposition, the CFO testified that although “there's clearly been lost sales” due to Kleen Concepts “Made in America” claim, he did not know “the magnitude of the impact.” (Id. 137-38);

         D. Expert Testimony

         Both parties have retained experts to testify as to the likelihood of consumer confusion of SHIELD and SHIELDME branded products. Hilsinger retained Dr. Melissa Pittaoulis to design and conduct a likelihood-of-confusion survey. (Def. Mot. to Exclude Ex. 1 ¶ 9, “Pittaoulis Report”). Kleen Concepts retained Brian M. Sowers to design and conduct its own likelihood-of-confusion survey. (Def. Opp. to Pl. Mot. to Exclude Ex. 1 ¶ 8, “Sowers Report”)

         1. Pittaoulis Report

         Melissa Pittaoulis is a consultant with an economic consulting firm. (Pittaoulis Report ¶ 1). She holds a doctorate in sociology and has authored a number of publications, including on Lanham Act surveys. (Id. ¶ 6).

         In connection with this action, Pittaoulis conducted an online survey using what is known as the “Squirt” methodology. See SquirtCo. v. Seven-Up Co., 628 F.2d 1086 (8th Cir. 1980). The purpose of the survey was to “determine whether consumers believe that Kleen Concepts['] . . . SHIELDME lens cleaners are made by the same company or otherwise affiliated with the company that makes SHIELD lens cleaners.” (Sowers Report ¶ 9).

         Pittaoulis selected the “array” variant of the Squirt survey method, in which multiple products bearing different marks, including the senior and junior marks, are displayed to respondents simultaneously in an array. According to Pittaoulis, such a survey was appropriate under the circumstances “because the products are sold in close proximity in the marketplace and . . . ‘SHIELD' is not likely to be a top-of-mind brand for consumers.” (Id. ¶ 9).

         Pittaoulis selected respondents based on a number of criteria, including whether they intended to purchased lens cleaner or screen cleaner in the next 12 months, and whether they would shop for that product at Wal-Mart. (Id. ¶ 15). In the survey, respondents were shown a side-by-side array of four bottles of lens cleaners bearing different marks, include the SHIELD and SHIELDME marks. (Id. ¶ 18). Respondents were asked whether they believed that the products were made by the same or different companies, and whether those companies were affiliated or associated with each other. (Id. ¶¶ 20-21).

         Based on the survey results, Pittaoulis found that there was a net confusion rate of 28.7% among respondents. (Id. ¶ 34). She concluded that rate of confusion “demonstrates that when the SHIELDME trademark is used on optical products, it is likely to be confused with SHIELD optical products.” (Id.).

         2. Sowers Report

         Brian Sowers is a consultant with a market research and consulting firm. (Sowers Report ¶ 1). He has a master's degree in business administration, and has “designed and conducted hundreds of market research surveys.” (Id. ¶ 2).

         Sowers also conducted an online survey using the Squirt method to test the likelihood of consumer confusion of SHIELD and SHIELDME products. However, rather than using the “array” format, Sowers selected the “line-up” format, in which images of products are shown sequentially, rather than simultaneously. According to at least one expert in the field, the line-up format of the Squirt survey is “far more frequently used” than the array format. (Jerre B. Swann, Everready and Squirt-Cognitively Updated, 106 L. J. of the Int'l Trademark Ass'n 727, 739 (2016), Docket No. 212-5).

         Like Pittaoulis, Sowers selected respondents based on their stated intent to purchase lens-cleaning products from Wal-Mart. (Sowers Report ¶¶ 20, 23). Respondents were shown products displaying the SHIELD mark alone, and were then asked three “distractor questions” related to their shopping habits. (Id. ¶¶ 20, 23, 34). According to Sowers, the distractor questions were designed to “create some ‘mental distance' between the Shield lens cleaner image and the lens cleaner images from the other companies” and to “help simulate the actual marketplace conditions of purchasing these lens cleaners, in which consumers encounter the two marks in close, but not literally side-by-side, proximity.” (Id. ¶ 34). After being asked the distractor questions, respondents were shown three lens-cleaning products bearing different brands one at a time, in random order, including a SHIELDME product. (Id. ¶ 36). Sowers imposed a five-second delay between the display of each image of a lens-cleaning product. (Id.). After viewing all of the products seriatim, respondents were asked if they believed that any products were put out by the same company and whether they believed that the companies were connected or otherwise affiliated. (Id. ¶ 23). Based on that survey, Sowers concluded that there was a net confusion rate of 9% among consumers. (Id. ¶ 52).

         At the end of the survey, Sowers asked respondents a final, open-ended question concerning their primary consideration when selecting a lens-cleaning product for purchase. (Id. ¶ 42). Specifically, they were asked, “[w]hat is your main consideration when choosing which lens cleaner to purchase?” and were given the opportunity to type a response. (Id. ¶ 42). Based on the responses to that question, he concluded that 88.4% of respondents did not mention brand as a primary consideration when deciding which lens cleaner to purchase, and that price was the “overwhelming factor” that consumers consider. (Id. ¶ 52).

         At his deposition, Sowers testified that he had never authored an expert report as to a primary-consideration survey. (Sowers Dep. 95). When asked whether he was “aware of the standard practices within [his] industry for designing such a report, ” he replied, “I've never done one, so no.” (Id.) When asked whether he was “aware of any expert reports commissioned at [his marketing research firm] where an opinion was expressed as to primary consideration based on one question within a likelihood of confusion survey, ” he responded that he could not recall any. (Id. at 95-96).

         II. Procedural Background

         The third amended complaint filed by Hilsinger alleges seven counts arising under federal law and common law: (1) federal trademark infringement in violation of 15 U.S.C. § 1114; (2) federal unfair competition and false designation of origin in violation of 15 U.S.C. § 1125(a); (3) unfair competition under the common law; (4) cancellation of the trademark registration for a SHIELDME mark; (5) cancellation of a different trademark registration for a SHIELDME mark; (6) declaratory judgment; and (7) false advertising and false designation of origin in commercial advertising or promotion in violation of 15 U.S.C. § 1125(a).

         Defendant has moved for summary judgment on two of those claims, and to exclude the expert testimony of Pittaoulis. Plaintiff has moved to strike one of defendant's filings in connection with those motions, and to exclude the expert testimony of Sowers.

         III. Defendant's Motions for Summary Judgment and ...


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