United States District Court, D. Delaware
B. Graham, Stephen J. Kraftschik, MORRIS, NICHOLS, ARSHT
& TUNNELL LLP, Wilmington, Del.; David Williams (argued),
Michael R. Naccarato, Wayne H. Xu, GORMAN & WILLIAMS,
Baltimore, Md., attorneys for Plaintiff American Cruise
Richard A. Barkasy, SCHNADER HARRISON SEGAL & LEWIS LLP,
Wilmington, Del.; Dennis D. Murrell (argued), Brian P.
McGraw, MlDDLETON REUTLINGER, Louisville, Ky., attorneys for
Defendants HMS American Queen Steamboat Company LLC and
American Queen Operating Company, LLC.
Andrews, U.S. District Judge.
sit right back and you'll hear a tale, a tale of two
competing cruise lines. Plaintiff American Cruise Lines
operates the vessels America, American Pride, American
Spirit, American Star, American Glory, Independence, Queen of
the West, and Queen of the Mississippi with the American
Constellation soon to come. Defendant American Queen
Steamboat Company operates the American Queen and American
Empress vessels. Their boats sail on, among others, the
Mississippi River and the Columbia and Snake Rivers, as well
as along the United States coast.
weather started getting rough between the parties when
Defendant, after purchasing the American Queen from the
Government, adopted the name Great American Steamboat Company
("GASC"). Plaintiff sued; the suit settled, giving
Plaintiff the rights to the GASC trademark; and Defendant
changed its operating name to American Queen Steamboat
Company ("AQSC"). Having settled, it would seem the
disagreement over the GASC mark would be water under the
bridge. Apparently not.
the three hour tour of the dispute between the parties.
Plaintiff claims Defendant breached the settlement agreement
and is cybersquatting on its GASC mark. The dispute over the
GASC mark was again the basis of this suit. (D.I. I 1).
Plaintiffs complaint stirred the waters. Now, the case has
spiraled into a full-blown trademark dispute.
claims Defendant's use of the AQSC mark infringes
Plaintiffs American Cruise Lines ("ACL") mark.
Plaintiffs ACL mark is senior to Defendant's AQSC mark.
Defendant, in turn, claims Plaintiffs ACL and American vessel
marks infringe Defendant's senior American Queen mark.
for any port in the storm, the parties turned to attacking
the validity of each other's marks. Plaintiff claims
Defendant's American Queen mark was abandoned when the
vessel sat in dry dock under government control for over
three years. Defendant claims Plaintiffs American Eagle mark
was fraudulently procured.
(D.I. 172, 216) and Defendant (D.I. 170, 212) have filed
cross-motions for summary judgment on various issues. Each
party has also moved to exclude expert witnesses proffered by
the other. (D.I. 167, 182).
begin with a voyage through the Daubert motions.
Those resolved, I will set sail for the summary judgment
proffers, and Plaintiff lodges (D.I. 167) Daubert
challenges at, the testimony of two expert witnesses: Dr.
Basil Englis and Cate Elsten. Likewise, Defendant brings
Daubert challenges (D.I. 182) to the testimony of
four of Plaintiffs experts: Gary Krugman, Bruce Silverman,
Christine Duffy, and Peter Kent. After reviewing the relevant
legal standard, I will address the fitness to sail of each
expert's proffered testimony.
district court acts as a gatekeeper" to ensure that
expert testimony is reliable and helpful. Schneider v.
Fried, 320 F.3d 396, 404 (3d Cir. 2003). "The
primary locus of this obligation is [Federal Rule of
Evidence] 702...." Daubert v. Merrell Dow Pharma.,
Inc., 509 U.S. 579, 589 (1993). It reads:
witness who is qualified as an expert by knowledge, skill,
experience, training, or education may testify in the form of
an opinion or otherwise if:
(a) the expert's scientific, technical, or other
specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and
(d) the expert has reliably applied the principles and
methods to the facts of the case.
Fed. R. Evid. 702.
702 codified the Supreme Court's holding in Daubert.
Calhoun v. Yamaha Motor Corp., 350 F.3d 316, 320 (3d
Cir. 2003). The Daubert Court rejected the then
widely used Frye test. See Daubert, 509
U.S. at 589. The Frye test required an expert's
theory or process be "generally accepted as reliable in
the relevant scientific community." Id. at 584.
The test was seen as imposing too "rigid" a
requirement. See Id. at 588. This rigidity was
"at odds with the liberal thrust of the Federal Rules
and their general approach of relaxing traditional barriers
to opinion testimony." Id. at 588.
Burden of Proof
replaced the Frye test with a "trilogy" of
requirements: (1) qualification, (2) reliability, and (3)
fit. Schneider, 320 F.3d at 404. My determination
that proffered testimony complies with these prerequisites is
governed by Federal Rule of Evidence 104(a).
Daubert, 509 U.S. at 592. As such, I must find
Daubert's trilogy of requirements is met by a
preponderance of the evidence. In re Paoli R.R. Yard PCB
Litig., 35 F.3d 717, 744 (3d Cir. 1994).
one hand, this showing requires the party proffering expert
testimony do more than make a prima facie case of
reliability. Id. at 743. On the other hand, the
"evidentiary requirement of reliability is lower than
the merits standard of correctness." Id. The
proffering party does not "have to prove their case
twice-they do not have to demonstrate to the judge by a
preponderance of the evidence that the assessments of their
experts are correct, they only have to demonstrate
by a preponderance of evidence that their opinions are
reliable." Id. at 744.
first prerequisite, qualification, "refers to the
requirement that the witness possess specialized
expertise." Schneider, 320 F.3d at 404. While
the language of Daubert is couched in terms of
scientific expertise and knowledge, the qualification
requirement, as well as the fit and reliability requirements,
are imposed on other technical or specialized knowledge.
Calhoun, 350 F.3d at 321 (citing Kumho Tire Co.
u. Carmichael, 526 U.S. 137, 141 (1999)).
Third Circuit has interpreted the qualification requirement
"liberally" and has "eschewed imposing overly
rigorous requirements of expertise...." Paoli,
35 F.3d at 741. Generalized qualifications are sufficient,
id., but "more specific knowledge is required
to support more specific opinions, " Calhoun,
350 F.3d at 322.
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. Reliability
does not require certainty, Daubert, 509 U.S. at
590, but does require "validity, " Paoli,
35 F.3d at 742.
all of the Daubert requirements, I have a
gatekeeping role to play in assessing the reliability of the
expert testimony. "When there is a serious question of
reliability of evidence, it is appropriate for the court to
exercise to some degree an evidentiary screening
function." Paoli, 35 F.3d at 743 (quoting
United States v. Downing, 753 F.2d 1224, 1240 n. 21
(3d Cir. 1985)).
being said, the Third Circuit has warned that "the
reliability requirement must not be used as a tool by which
the court excludes all questionably reliable evidence."
Id. at 744. An expert's opinion must be founded
on good grounds, not perfect ones. Id. I can
conclude there are good grounds for the opinion even if I
"think there are better grounds for some alternative
conclusion" or that the expert's methodology
"has some flaws such that if they had been corrected,
the scientist would have reached a different result."
Id. The Third Circuit has directed that a
"judge frequently should find an expert's
methodology helpful even when the judge thinks that the
expert's technique has flaws sufficient to render the
conclusions inaccurate." Id. at 744-45.
expert testimony to be admitted, it must be capable of
"help[ing the jury to] understand the evidence or to
determine a fact in issue...." Fed.R.Evid. 702. This fit
requirement asks whether the proffered testimony is
sufficiently helpful. See Daubert, 509 U.S. at 591
("Expert testimony which does not relate to any issue in
the case is not relevant and, ergo, non-helpful.").
"[H]elpfulness requires more than bare logical
relevance, but there is a strong preference for
admission." Paoli, 35 F.3d at 745. The same
liberalness in evaluating reliability applies in evaluating
fit. Id. at 745. "Once again, [the Third
Circuit] emphasize[s] that the standard is not that
an expert meets the requirements of qualification,
reliability, and fit, there is still "some room for Rule
403 to operate independently." Paoli, 35 F.3d
at 746. "The court may exclude relevant evidence if its
probative value is substantially outweighed by a danger of
one or more of the following: unfair prejudice, confusing the
issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence." Fed.R.Evid.
one hand, the Supreme Court has explained, "Expert
evidence can be both powerful and quite misleading because of
the difficulty in evaluating it. Because of this risk, the
judge ... exercises more control over experts than over lay
witnesses" under Rule 403. Daubert, 509 U.S. at
595 (citations omitted). On the other hand, the Third Circuit
has warned: "[A] district court cannot exclude a
scientific technique as too confusing and overwhelming simply
based on its conclusion that scientific techniques by their
very nature confuse and overwhelm the jury."
Paoli, 35 F.3d at 746. Instead, in order to exclude
expert evidence under Rule 403, there "must be something
about the particular  technique such as its posture of
mythic infallibility that makes is especially
Dr. Basil Englis
proffers, and Plaintiff challenges, Dr. Basil Englis as an
expert on likelihood of confusion. Dr. Englis is a long-time
marketing professor at Berry College, where he chairs the
Marketing Department. (Englis at ¶ 1). He has a
doctorate in experimental social psychology from Dartmouth
College. (Englis Ex. A). Dr. Englis has authored over 100
published and refereed conference papers. (Id.).
Englis is not an expert in the cruise industry specifically
or travel industry generally. He has had two prior
engagements in the travel industry: one for an airline where
he studied the use of trademark terms as paid search keywords
and one for a hotel booking website. (D.I. 168-1 at 65, 75).
Englis proffers an opinion that there is a likelihood of
confusion between Plaintiffs and Defendant's marks. As is
a regular practice in trademark cases, Dr. Englis often
conducts surveys to measure consumer confusion. (Id.
at 77). He did not conduct such a survey here. (Id.
at 78). Instead, his opinions are based on his review of
qualitative evidence. (Id. at 84-85).
excluding Dr. Englis's likelihood of confusion opinion
except that I will allow Dr. Englis to testify on Plaintiffs
use of paid search keywords and confusion.
Englis fails to moor his conclusions in reliable methodology
or reasoned analysis. Outside of his discussion of paid
search keywords. Dr. Englis's expert report is nothing
more than a recitation of facts paired with bare assertions.
For example, in his actual confusion opinion, once factual
accounts of confused consumers and travel agents are removed,
all he offers is an assertion that "actual confusion is
occurring in the marketplace" and that "the
activities of [Plaintiff] are implicated as causes of
confusion in that consumers are contacting [Plaintiff]
believing they are contacting [Defendant]...." (See
Englis at ¶¶ 28-52). His other opinions do not
offer more than facts and conclusions either.
jury is capable of assessing the facts narrated by Dr. Englis
in his report and he offers no analysis to help them in doing
it. Cf. Cheesebrough-Pond's, Inc. v. Faberge,
Inc., 666 F.2d 393, 397-98 (9th Cir. 1982) (stating a
district court could have excluded an expert testifying on
likelihood of confusion because his testimony touched on
matters of "common knowledge and experience").
Conclusory statements of basic facts will not help the jury
and fail to offer a reliable methodology. See Betterbox
Commc'ns v. BB Tech., Inc., 300 F.3d 325, 329 (3d
Cir. 2002) (suggesting expert's methodology in a
likelihood of confusion case involving computer product
catalogues was flawed because he simply evaluated the
catalogues, "informally surveyed colleagues, " and
looked at the target market). Thus, I am excluding Dr.
Englis's testimony on likelihood of confusion under Rule
asserts other grounds for me to exclude Dr. Englis's
testimony, including his assumption that the vessel name
American Queen is iconic without citation to evidence or
analysis and his questionable use of data to calculate
revenues and marketing expenditures. Because I am excluding
his testimony as unhelpful, I need not address those
Englis's opinion on Plaintiffs use of Defendant's
marks as paid search keywords stands in contrast to his other
proffered opinions. This use is part of Defendant's
infringement case. In broad strokes, Plaintiff paid search
engines like Google to have its own ads appear as sponsored
content when consumers entered Defendant's marks in the
opining on Plaintiffs use of paid search keywords, Dr. Englis
offers more than mere recitation of facts; he offers
explanation. For example, in opining on the significance of
using Defendant's marks as a paid search keyword, he
references and explains the funnel effect, a concept related
to how consumers search for products. His opinions cite and
incorporate research to provide context. Thus, I find that
Dr. Englis's opinion on Plaintiffs use of paid search
keywords would be helpful to the jury. He is qualified to
offer this opinion having previously studied and published on
Dr. Englis can testify on Plaintiffs use of Defendant's
mark in creating confusion, he cannot opine on Plaintiffs
intent. Dr. Englis, in his report, proffers an opinion that
Plaintiffs use of Defendant's marks demonstrates
Plaintiff intended to cause and to benefit from consumer
confusion. (Englis at ¶¶ 97-101). Intent is not a
proper topic for expert testimony. E.g., AstraZeneca LP
v. TAP Pharma. Products, 444 F.Supp.2d 278, 293 (D. Del.
2006). Thus, while Dr. Englis can testify that Plaintiffs
paid search keyword practices caused confusion, he cannot
proffer an opinion on how Plaintiffs practices speak to its
challenges Defendant's damages expert, Cate Elsten, as
offering opinions outside of her expertise and as expanding
on facts unnecessary to her opinion.
is a finance and licensing expert with a focus on
intellectual property. (Elsten at App. C). She currently
serves as the Managing Director of Ocean Tomo, "an
integrated intellectual property consulting firm providing
financial products and services including expert testimony,
valuation, investments, risk management and
transactions." (Id. at p. 1).
most of Elsten's two reports, an opening report and a
rebuttal report, are appropriate and supported, her opinions
sometimes drift outside of her area of expertise. For
example, Elsten analyzes product differentiation between the
two companies. (Elsten Rebuttal at pp. 11-19). Defendant has
not satisfied its burden to show Elsten is qualified to opine
on how consumers make purchasing decisions. Likewise, Elsten
has not been qualified to interpret the survey results
proffered by Hal Poret, Plaintiffs expert.
also offers up factual accounts with questionable relevance
to her damages opinion. For example, she summarizes instances
of actual confusion, discusses Plaintiffs use of paid search
keywords, and recounts all of the facts relevant to
abandonment. To the extent Elsten's factual
narratives exceed that necessary to explain the opinions
actually proffered and she proffers opinions for which she
has not been qualified, her opinions are excluded. Her
opinions are otherwise allowed.
Krugman is a trademark attorney who previously served as an
examiner in the U.S. Patent and Trademark Office and as an
attorney examiner and then administrative trademark judge at
the Trademark Trial and Appeal Board. (Krugman at
¶¶ 4-7, 9). Plaintiff proffers Krugman to ...