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Marketing Experts

Admissibility Rate: .333    (2/6)

John G. Danielson, Inc. v. Winchester-Conant Props., Inc., 322 F.3d 26 (1st Cir. 2003).  Architect draws up plans for residential real estate development.  Developer then prevails upon zoning commission to approve parcel for proposed development.  Zoning approval comes with restrictive covenant, running with land, requiring that any residential development conform to architect's drawings.  Soon after construction begins, developer encounters financial woes, and never pays architect.  Second developer then acquires parcel in foreclosure sale and attempts to secure variance in favor of new architectural plans.  When variance is denied, second developer proceeds to build in conformity with original architect's plans.  Original architect sues second developer for copyright infringement.  District court awards partial summary judgment to architect on issue of infringement.  At trial on damages, second developer offers expert testimony from architect David Barsky and condominium marketing consultant Sue Hawkes, who opine, over architect's objections, that certain features in original plans, such as placement of garages and parking areas, actually may have detracted from development's appeal.  Hawkes also seeks to testify that site plans contribute only approximately 10-15% to condominium projects' overall appeal, but district court excludes that testimony as wanting in foundation.  Jury awards damages roughly equivalent to entire profit from development project.  Admissibility affirmed.  Both experts were experienced professionals with relevant expertise, and district court did not abuse discretion in admitting their testimony under Kumho Tire.  Nor did trial court err in barring Hawkes's testimony on contribution of plans to overall development value.  But new trial is necessary to apportion damages, because only profits attributable to infringement are recoverable.  At second trial, developer may do better job of laying foundation for Hawkes's estimate.  More importantly, when jurors are given proper instructions on damages, under which apportionment need not be calculated with mathematical exactness, it will be less important for developer to produce precise figures.

Betterbox Comm'cns, Ltd. v. BB Techs., Inc., 300 F.3d 325 (3d Cir. 2002).  Betterbox and Black Box sell competing computer products through catalog marketing.  When Betterbox attempts to register trademark in United States, Black Box objects, claiming infringement.  Betterbox brings declaratory judgment action, and Black Box counterclaims, alleging trademark infringement and unfair competition.  Both sides offer experts on likelihood of consumer confusion, and district court denies motions in limine as to both.  Jury returns verdict of noninfringement, and Black Box appeals.  Admissibility affirmed.  Black Box challenges credentials of Betterbox's marketing expert, John Schulte, contending his relevant experience is insufficient and predates litigation by eight years.  But expert has significant experience in both catalog marketing and computer marketing, and Black Box points to no revolution in field during past eight years.  Expert's particular experience is also relevant to several pertinent legal factors for evaluating likelihood of consumer confusion.  Black Box also contends expert's methodology is unreliable, but expert testified he considered perception of product names, sophistication of target market, logo design, and catalog look and feel.  His methodology is virtually indistinguishable from that of Black Box's own expert, and district court did not abuse discretion in admitting testimony.  Even if it had, any error was harmless, because Betterbox did not place heavy reliance on expert's opinion.

El Aguila Food Prods., Inc. v. Gruma Corp., No. 04-20125 (5th Cir. May 17, 2005) (unpublished).  At trial of antitrust claim involving tortilla market, plaintiffs offer testimony on damages from expert Kenneth McCoin and on causation and antitrust injury from expert Gregory Gundlach.  Trial court excludes testimony from both, dismisses jury, and awards judgment to defendants.  Exclusions affirmed.  McCoin's damage model simply assumed without support that plaintiffs' firms would have earned average industry profit margin, without tying lost profits to specific conduct of defendants.  Gundlach's opinions were permissibly excluded as abstract propositions not sufficiently grounded in facts of case.

IQ Products Co. v. Pennzoil Products Co., 305 F.3d 368 (5th Cir. 2002), cert. denied, 538 U.S. 934 (2003).  Both IQ and Pennzoil market tire inflators (canned pressurized chemicals used for temporary repair of flat tires).  IQ sues Pennzoil under Lanham Act for failing to label its product "flammable," as allegedly required under Federal Hazardous Substances Act (FHSA), and also for allegedly representing, falsely, that Pennzoil's tire inflator is "non-explosive."   District court grants summary judgment on both claims, after excluding testimony from two IQ experts, Dr. Al E. Birdwell and (IQ CEO) Yohanne Gupta, re harm to IQ's business.  Exclusion affirmed.  FHSA affords no private right of action, directly or via Lanham Act, and so district court properly dismissed claims based on Pennzoil's failure to label its product as "flammable."  And even if district court erred in finding that IQ failed to present issue of genuine material fact re falsity of Pennzoil's representations that its tire inflators were "non-explosive," IQ's claim on this front would still founder for want of admissible proof of injury to business.  Both IQ experts testified on combined harm resulting from Pennzoil's labeling omission and "non-explosive" representations, and so with labeling issue properly resolved in Pennzoil's favor, district court did not err in finding their testimony irrelevant.  Moreover, neither IQ expert employed reliable methods.  E.g., neither expert conducted surveys, which are commonly used by market analysts to analyze effects of marketing techniques on consumer behavior.

Menasha Corp. v. News Am. Mktg. In-Store, Inc., 354 F.3d 661 (7th Cir. 2004) (see the briefs).  Manufacturer of at-shelf coupon dispensers sues competitor, alleging that competitor's exclusive contracts with retailers violate antitrust laws.  Are at-shelf coupon dispensers part of larger economic market that also includes newspaper coupons and stuck-to-product-box coupons, or do they represent distinct market of their own?  To prove the latter, plaintiff offers testimony from experts including journalist James Tenser, whose survey of friends and acquaintances discloses that they prefer at-shelf coupons to other kinds, and marketing expert James Langenfeld, who relies in part on Tenser's survey.  District court excludes Tenser's survey for failure to adhere to standard survey techniques, and so much of Langenfeld's testimony as depends on Tenser's survey.  District court then awards summary judgment to defendant.  Exclusions affirmed.  Not only was survey wanting in rigor, it was irrelevant in any event.  Consumer preference cannot establish that some commodity represents market unto itself; otherwise vanilla ice cream could constitute separate market from chocolate ice cream, merely because consumers preferred vanilla overall.  Plaintiff's other evidence did not suffice to defeat summary judgment.

United States v. Fredette, 1315 F.3d 1235 (10th Cir.), cert. denied, 538 U.S. 1045 (2003).  Principal of business is charged under RICO with marketing bogus fuel rebate coupons, which are so absurdly difficult to redeem that very few consumers successfully navigate redemptions (35,000 vouchers issued, 613 redemption checks cut).  In his defense, defendant invokes concept of "breakage" -- industry jargon for tendency of consumers to let rebate coupons lie fallow rather than jump through hoops required to redeem them.  To support his "breakage" defense, he offers testimony from marketing expert James D. Feldman, who relies on his experience and knowledge of standards in rebate industry.  However, at Daubert hearing, expert testifies that he has never before encountered similar rebate program, where $500 or more was offered over 12-month period, so that comparing "breakage" rates with usual industry levels "doesn't really work."  Expert instead proposes to evaluate defendant's rebate program according to whether its rules and regulations were honored.  Trial court excludes testimony and jury convicts.  Exclusion affirmed.  Where expert relies on his own experience, he must, under Kumho Tire, explain how experience leads to conclusion reached, why his experience is sufficient basis for opinion, and how that experience is reliably applied to facts.  This expert offered no such explanation, nor could he, because his experience related only to different rebate programs, and would not have enabled him to established whether defendant's program adhered to its own rules and regulations.  Moreover, "breakage" concept is not beyond ken of average juror, and district court properly concluded that expert's testimony would not assist trier of fact.

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