Alpha Pro Tech, Inc. v. VWR Int'l, LLC

ALPHA PRO TECH, INC., Plaintiff, v. VWR INTERNATIONAL, LLC, Defendant.

CIVIL ACTION NO. 12-1615

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

OCTOBER 11, 2016

MEMORANDUM

PRATTER, J.

Alpha Pro Tec, Inc., ("Alpha") alleges that VWR International, LLC ("VWR") has misappropriated Alpha's trade secrets used in its manufacture of certain nonwoven, disposable laboratory apparel. The products at issue include lab coats, aprons, frocks, as well as shoe and boot covers. Such garments are used in "clean-rooms" in the life sciences, advanced materials, chemical, and manufacturing industries. In support of its claims, Alpha has identified three expert witnesses it proposes to call to testify at trial: Christopher Louisos, Danny Montgomery and Neil Beaton. VWR proposes to call Gregory Heiland to testify regarding certain aspects of the disposable laboratory apparel industry.

VWR has moved to exclude Messrs. Louisos, Montgomery and Beaton as witnesses, pursuant to Federal Rule of Evidence 702. (Doc. Nos. 98, 99 and 100). Alpha has moved to exclude Mr. Heiland. (Doc. No. 102). Both parties have submitted briefing in opposition to the respective motions. The Court heard oral argument on the Daubert motions. For the reasons outlined below, the Court will grant VWR's motion to exclude the testimony of Mr. Louisos, will grant in part and deny in part VWR's motions to exclude Mr. Montgomery and Mr. Beaton, and will deny Alpha's motion to exclude Mr. Heiland.

I. STANDARD OF REVIEW

The trial judge has a special obligation and challenge under Federal Rule of Evidence 702 to ensure that any and all expert testimony is not only relevant, but reliable. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999) (citing Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 589 (1993)). Rule 702 governs the admissibility of expert testimony and provides:

A 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 methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.

Fed. R. Evid. 702. The purpose of the inquiry is to ensure that the expert, whether basing his testimony on professional studies or personal experience, is employing the level of intellectual rigor which characterizes the practice of an expert in the relevant field. Kumho Tire, 526 U.S. at 152. The Third Circuit Court of Appeals has explained that Rule 702 embodies "a trilogy of restrictions on expert testimony: qualification, reliability and fit." Schneider ex rel. Estate of Schneider v. Fried, 320 F.3d 396, 404 (3d Cir. 2003) (citations omitted). "The proponent of the expert testimony bears the burden of establishing that the proffered testimony meets each of the three requirements by a preponderance of the evidence." Dalton v. McCourt Elec. LLC, 112 F. Supp. 3d 320, 325 (E.D. Pa. 2015) (citing Padillas v. Stork-Gamco, Inc., 186 F.3d 412, 418 (3d Cir. 1999)); accord In re Tylenol (Acetaminophen) Mktg., Sales Practices, & Prod. Liab. Litig., No. 12-07263, 2016 WL 4005765, at *2 (E.D. Pa. July 26, 2016). While specialized knowledge is a requirement, the basis of such knowledge can be "practical experience as well as academic training and credentials." Betterbox Commc'ns Ltd. v. BB Techs., Inc., 300 F.3d 325, 328 (3dCir. 2002) (Alito, J.) (noting that the specialized knowledge requirement has been construed "liberally") (citing Waldorf v. Shuta, 142 F.3d 601, 625 (3d Cir. 1998)).

An expert witness is required, under Rule 26 of the Federal Rules of Civil Procedure, to provide certain disclosures enumerated under the Rule. Failure to comply with this disclosure obligation empowers the Court to preclude use of the proposed testimony. The extent of these disclosures, however, may depend upon whether the expert has been specifically retained to provide expert testimony. Unlike a retained expert, a witness who is not retained to provide expert testimony—such as a plaintiff's treating physician might be in a prototypical personal injury tort case—is not required to submit a written report laying out a complete statement of his opinions and the reasons for them. See Fed. R. Civ. P. 26(a)(2)(C). As described in the Rule's Advisory Committee Notes, the reporting requirements under Rule 26(a)(2)(C) are "considerably less extensive than the report required by Rule 26(a)(2)(B)." Little Hocking Water Ass'n, Inc. v. E.I. DuPont de Nemours & Co., No. 2:09-CV-1081, 2015 WL 1105840, at *3 (S.D. Ohio Mar. 11, 2015) (citing Rule 26, Advisory Committee Notes). Such a non-retained expert must, however, still enumerate the topics he intends to opine on if he is to be a witness at trial, and offer a description of what his opinions will be.

II. ANALYSIS

A. Motion to Exclude Christopher Louisos (Doc. No. 99)

The Court will first address the defense motion to exclude the testimony of Christopher Louisos.¹ The defendant initially moved to exclude the testimony of Mr. Louisos in July 17,2015, arguing that his expert report failed to meet the mandatory disclosure requirements of Federal Rule of Civil Procedure 26(a)(2)(C). The "report" in question provided only a short description of each general topic on which he intended to offer testimony. The plaintiff filed a response in opposition, arguing that Mr. Louisos, as a non-retained expert, was not obligated to provide a full-blown expert report, and that the limited material provided satisfied Rule 26. Several weeks later, however, the plaintiffs filed a supplemental report for Mr. Louisos. The defendant then filed a memorandum of law in support of the motion to exclude Mr. Louisos's testimony. The Court called for a hearing, during which the parties discussed both the motion to exclude Mr. Louisos's testimony and the plaintiff's motion to supplement the report. At that hearing, the Court gave permission for an additional deposition of Mr. Louisos followed by supplemental briefing. Both parties filed additional briefing and the Court again heard oral argument on the motion. Given that the arguments (and report) in question have changed, the Court will focus on the supplemental report, as well as the supplemental briefing, following Mr. Louisos's deposition.

The defendant raises two general arguments in support of excluding Mr. Louisos's testimony. First, that Mr. Louisos is not qualified to offer opinions on branding, trademark confusion, customer reactions, business ethics, or trademark law; second, that his opinions are inadmissible because they are not based upon the application of a reliable methodology.

i. Contents of August 28, 2015 Supplemental Expert Report

Consideration of the parties' arguments requires a brief description of the contents of Mr. Louisos's August 28, 2015 Supplemental Expert Report. Mr. Louisos is employed by Alpha. His job responsibilities consist of managing Alpha's sales force and marketing team, and generally overseeing the relationship between Alpha and its distributors. Based upon thisexperience, he proposes to offer testimony regarding various aspects of the disposable garment industry generally, as well as Alpha's business and the company's interactions with VWR.

The report itself contains three categories of proposed testimony. The first category is characterized as "expert testimony offered to explain, practice, custom and usage." Both the report and the plaintiff's briefing in opposition to the motion claim that this testimony is not expert opinion, but rather descriptions which will be helpful for the jury to understand his later opinions. Mr. Louisos proposes to testify from his own experience, regarding the cleanroom environments in which Alpha's products are used. He proposes to testify regarding utility of relying on distributors and the "private label" sales strategy which allegedly characterized the relationship between Alpha and VWR. He proposes to discuss "various sales tactics" which he claims have been employed in the disposable garment market.

This leads to the second category of testimony contained in the report. Mr. Louisos proposes to offer three specific opinions at trial, namely that:

1. Alphas' Critical Cover line of apparel and related trademarks and trade names had value in the relevant markets from 2000 through present, which value was not based upon the addition of VWR's name to the trademarks. . .;

2. VWR's sales and other tactics employed in pursuit of the APT Conversion Plan were improper, unethical and/or unprofessional. . .;

3. There was confusion or likelihood of confusion in connection with the sale of VWR's Protection Apparel Products as replacements for Critical Cover Products.

Louisos Supp. R. at 7-10. In the report, Mr. Louisos provides some limited explanation of the reasoning behind these opinions. As to the first, he states that his opinion is based upon his anecdotal experience working with customers. With regards to VWR's tactics, he cites to his review of VWR documents and testimony, and states VWR's conduct violates industry standards and VWR's code of conduct. Finally, as to customer confusion, he bases his opinion on anecdotal statements by customers as well as Alpha's own, apparent, confusion.

The last category of testimony contained in Mr. Louisos's report is his "application" of the factors set out in Interface Corporation v. Lapp, Inc., 721 F.2d 460 (3d Cir. 1983), to the facts of this case. Using this case as a framework, he proposes to opine regarding (1) the degree of similarity of the Alpha and VWR marks, (2) the strength of Alpha's marks, (3) the price of Alpha's products, and other facts indicative of care and attention expected of consumers when...