Intellectual Property Expert Witnesses Battle Over Energy Drinks

Case: Innovation Ventures, LLC v. NVE, Inc., No. 08-11867; United States District Court for the Eastern District of Michigan; Feb. 27, 2015.

Background: Plaintiff, Innovation Ventures, Inc., makes and distributes an energy drink product called “5-Hour ENERGY.” Defendant, NVE, Inc., makes a similar energy drink product called “Stacker 2 6-Hour POWER.” After a complicated and lengthy procedural history, only two questions remained at issue. The first one was propounded by Plaintiff, who claimed Defendant’s energy drink product infringed on its common law trademark rights. The second issue was propounded by Defendant, who alleged Plaintiff used false advertising when it issued a “legal notice” to retailers incorrectly stating that Defendant’s energy drink product had been recalled.

Before trial, over a dozen objections and motions in limine were presented by both parties. However, only some of them concerned the use of an intellectual property expert witness. The following is a list of arguments concerning the use of expert witnesses:

1. Objections regarding Plaintiff’s supplemental expert reports
2. Defendant’s motion in limine to prevent Plaintiff’s use of Dr. Dan Sarel’s original report
3. Defendant’s motion in limine to prevent Plaintiff’s use of intellectual property expert witness Howard Marylander
4. Defendant’s motion in limine to prevent Plaintiff’s use of intellectual property expert witness Dr. Gregory Carpenter
5. Defendant’s motion in limine to prevent Plaintiff’s use of antitrust expert witness Tom Pirko

Plaintiff’s Supplemental Expert Reports: During the course of litigation, Plaintiff submitted two reports by Dr. Dan Sarel and one report by Dr. Deborah Jay. The second report by Dr. Sarel and the only report from Dr. Jay, were submitted during a supplemental expert witness discovery period. Defendant believed that Dr. Sarel’s second report and Dr. Jay’s report should be excluded because they do not supplement prior expert reports and instead are brand new expert reports and are therefore untimely.

Admissibility of Supplemental Expert Reports: The Court concluded that Dr. Sarel’s second report would not be excluded, but Dr. Jay’s report would be excluded. Plaintiff argued that Dr. Sarel’s second report was a supplemental report because it was “substantially responsive” to Defendant’s expert witness’ criticism of Dr. Sarel’s first report. Plaintiff argued that Dr. Jay’s report was a supplemental report because it supplemented the report of Howard Marylander.

The Court agreed with Plaintiff in that Dr. Sarel’s second report did supplement his first report. However, the Court agreed with Defendant in that Dr. Jays’s report was not a supplemental report because she had not previously submitted a report and Plaintiff’s argument that it was really supplemental to Howard Marylander’s report was incorrect.

Dr. Sarel’s Original Report: Dr. Sarel’s original report was based on a “mall intercept” survey which asked potential energy drink buyers about energy drink brand recognition. Defendant criticized this report as being unreliable due to improper use of a survey population and control and use of suggestive questions. In response, Plaintiff had Dr. Sarel prepare a second report.

Admissibility of Dr. Sarel’s Original Report: The Court agreed with Defendant that Dr. Sarel’s original report should be excluded from use as evidence. The trial court has the job of acting as a gatekeeper and preventing the use of unsupported, speculative and/or unreliable expert opinions. Therefore, a trial court may exclude evidence because it is unreliable, but not because it is wrong; the latter is for the ultimate trier of fact to decide.

Dr. Sarel’s original report was based on flawed methodologies, the same flawed methodologies used by Dr. Sarel in an earlier court case. In that earlier case, the trial court excluded Dr. Sarel’s report. The Court in the current case saw no reason to deviate from that prior conclusion and agreed with Defendant that Dr. Sarel’s original report should be excluded.

Howard Marylander Expert Witness: Plaintiff used Mr. Marylander so he could give his opinion that 5-Hour ENERGY was a recognized brand name and that 5-Hour ENERGY had a strong secondary meaning. Defendant felt Mr. Marylander should be prevented from giving these opinions because of flawed methodologies. Including improper definitions, an improper context and an improper universe. Defendant also felt that Mr. Marylander’s opinions were irrelevant due to a prior judicial ruling in the case.

Admissibility of Howard Marylander as an Expert Witness: The Court denied Defendant’s motion in limine to preclude Mr. Marylander as an expert witness. The Court concluded that Mr. Marylander’s opinion was relevant to the current case and that any problems with his methodologies went to the credibility or strength of Mr. Marylander as an expert witness, not to the admissibility of his testimony. The Court made this decision because Mr. Marylander’s survey method was widely accepted by the courts and any errors were “technical deficiencies” rather than “major flaws” which would undermine the reliability of Mr. Marylander’s opinions.

Dr. Gregory Carpenter Expert Witness: Defendant believed that Dr. Gregory Carpenter was presenting three improper arguments. The first two were deemed moot due to procedural reasons, but the third had to do with whether Dr. Carpenter’s opinion were unnecessarily cumulative in that he would add nothing new to Plaintiff’s case, but instead rehash the opinions of Plaintiff’s other witnesses.

Admissibility of Dr. Gregory Carpenter as an Expert Witness: The Court disagreed with Defendant and felt that Dr. Carpenter was not rehashing other expert opinions. The Court acknowledged that Dr. Carpenter was a well-credentialed professor from a major university who specialized in marketing research of new brands. The Court also recognized that Dr. Carpenter’s testimony was unique because it dealt with “first mover advantage” and how a pioneering brand could create competitors. Due to the new information Dr. Carpenter brought as a witness, his testimony was not cumulative.

Tom Pirko Expert Witness: Plaintiff retained the services of Tom Pirko so he could rebut the opinions of Defendant’s two expert witnesses which stated that Plaintiff had engaged in false advertising and committed antitrust violations. Defendant believed Tom Pirko should be precluded from testifying because his opinions concern antitrust arguments (and due to prior judicial decision in this case) were moot, because he was making factual and legal statements and opinions, and because Mr. Pirko’s opinions were not based on a reliable scientific method.

Admissibility of Tom Pirko as an Expert Witness: Defendant’s motion in limine to preclude Plaintiff from using Tom Pirko was granted in part and denied in part. The Court agreed that some of Mr. Pirko’s opinions were factual in that they just repeated the statements of other people, and that his opinions were legal, in that they constituted legal conclusions. Therefore, Mr. Pirko would be precluded from testifying on these matters. However, the Court disagreed with Defendant on its other arguments.

First, the Court determined that Mr. Pirko’s opinions relating to antitrust claims were not moot because Defendant still intended to make an unclean hands trademark infringement defense and opinions relating to antitrust issues were relevant to this unclean hands defense. Second, the Court explained that expert opinion can be based entirely on experience and not a scientific method. Because of Mr. Pirko’s extensive experience in the food and beverage industry, as well as serving as an intellectual property expert witness in other court cases, it did not matter that Mr. Pirko’s opinions were not based on a reliable scientific method, since they was based on his extensive experience.