IP Law Daily Jury’s $54 million award to Black & Decker tainted by flawed survey; new trial ordered
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Thursday, September 14, 2017

Jury’s $54 million award to Black & Decker tainted by flawed survey; new trial ordered

By Cheryl Beise, J.D.

A jury’s verdict and $53.9 million award to Black & Decker for Positec USA’s infringement of DeWalt tool products and packaging trade dress and trademarks was so tainted by flawed consumer survey evidence and expert testimony that a new trial was warranted, the federal district court in Chicago has ruled. At trial, Black & Decker’s expert testified that his survey was not directed to whether the defendant’s product packaging trade dress caused the consumer confusion, but instead was "observational." While other trial evidence support likelihood of confusion, Black & Deckers’s expert testimony and survey was the "linchpin" case (Black & Decker Corp. v. Positec USA Inc., September 11, 2017, Dow, R.).

In 2011, Black & Decker Corp., Black & Decker Inc., and Black & Decker (U.S.) Inc. (collectively, "B&D") filed suit against Positec USA Inc. and RW Direct, Inc., alleging patent, trademark, and trade dress infringement. In March 2015, the court granted summary judgment to the defendants on B&D’s trade dress dilution claim and on some of B&D’s patent infringement claims. In August 2015, the court heldthat B&D’s claim for disgorgement of profit could be tried by a jury.

In 2015, a six-day jury trial was held on B&D’s trademark and trade dress claims relating to B&D’s rights in a yellow and black color combination appearing on DeWalt’s power tools, power tool accessories, and packaging. The jury decided both claims in favor of B&D, awarding it $53,960,014 on its claims against Positec and $114,801 on its claims against RW Direct. Before the court were numerous post-trial motions filed by the parties. Among other things, the defendants moved for a new trial because the jury’s damages award was excessive, the verdict was against the weight of the evidence, and the trial was fundamentally unfair due to the admission of unreliable and prejudicial expert testimony and other inadmissible evidence.

The court granted the defendants’ motion for a new trial, finding that "fundamental unfairness was injected into the trial through the admission of James Berger’s expert survey concerning likelihood of confusion."

Survey evidence. At trial, the court allowed B&D’s expert, James Berger, to testify about the results of a consumer survey he had conducted to determine the likelihood of consumer confusion. Survey respondents were shown a photograph of two rows of boxed power tools displayed in a retail store. One box was contained the defendant’s Rockwell product and nine boxes contained B&D DeWalt products. Forty-seven percent of respondents said they believed that all the products in the picture were from the same company. At trial, Berger testified that his survey was not directed at whether the defendant’s trade dress caused the consumer confusion, but instead was "observational," testing whether respondents could be induced to "overlook the obvious"—that the defendant’s product was marked "Rockwell" whereas the other nine products were marked "DeWalt."

New trial. After considering Berger’s pre-trial submissions, his trial testimony, and the parties’ post-trial briefing, the court concluded that Berger’s survey evidence and testimony were so fundamentally flawed that they never should have reached the jury and that they did was fundamentally unfair to the defendants. Although B&D had presented substantial evidence to support a finding of likelihood of confusion, Berger’s testimony and survey were the only evidence B&D offered to show actual confusion and was the "linchpin" of B&D’s case, the court said. "Given that Plaintiffs presented no evidence that any consumers were actually confused about the origin of Defendants’ goods, there is a high probability that Mr. Berger’s flawed testimony unfairly influenced the jury’s verdict," the court said.

The court briefly addressed a few other "fundamental unfairness" arguments raised by the defendants in their motion for a new trial. The defendants asserted that they were prejudiced by evidence of B&D trademark registrations and prior judgments in its favor. The court said that, at the new trial, it would consider restricting the admission of such evidence in accordance with its probative value.

The defendants also argued that the court’s jury instructions combining trademark and trade dress infringement misstated the law and confused and mislead the jury. In hindsight, the court agreed that combining the instructions for the trademark and trade dress claims "was not the best way to proceed," given that the trade dress claim related to to product packing and the trademark claim involved use of a mark on a product.

Other issues. The court’s decision to order a new trial on the issue of likelihood of confusion mooted the parties’ post-trial motions relating to remedies and damages. The court denied the defendants’ motion to strike B&D’s jury demand ahead of the new trial because it was premature at this juncture. The court also denied the defendants’ motion for judgment notwithstanding the verdict (JNOV), which raised several other issues.

The case is No. 1:11-cv-05426.

Attorneys: Raymond Pardo Niro, Jr. (Niro McAndrews, LLC) for The Black & Decker Corp., Black & Decker Inc., and Black & Decker [U.S.] Inc. Robert J. Theuerkauf (Middleton Reutlinger) for Positec USA Inc. and R.W. Direct, Inc.

Companies: R.W. Direct, Inc.; The Black & Decker Corp.; Positec USA Inc.; Black & Decker Inc.; Black & Decker [U.S.] Inc.

MainStory: TopStory Trademark IllinoisNews

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