Saxon Glass Techs., Inc. v. Apple Inc.

393 F.Supp.3d 270

SAXON GLASS TECHNOLOGIES, INC., Plaintiff,

v.APPLE INC., Defendant.

1:15-CV-00581 EAW

United States District Court, W.D. New York.

Signed June 19, 2019

Filed June 20, 2019

Brian Marc Taddonio, Ditthavong & Steiner, P.C., New York, NY, Joseph Jude Zito, DNL Zito, Washington, DC, Patrick R. DeLaney, James M. Lennon, Pro Hac Vice, Robyn T. Williams, Pro Hac Vice, Timothy Devlin, Pro Hac Vice, Devlin Law Firm LLC, Wilmington, DE, Peter J. Weishaar, McConville Considine Cooman & Morin, PC, Rochester, NY, for Plaintiff.

Bonnie L. Jarrett, Claudia E. Ray, Dale M. Cendali, Shanti Sadtler Conway, Kirkland & Ellis, New York, NY, Eric J. Ward, Ward Greenberg Heller & Reidy LLP, Rochester, NY, for Defendant.

DECISION AND ORDER

ELIZABETH A. WOLFORD, United States District Judge

INTRODUCTION

Plaintiff Saxon Glass Technologies, Inc. ("Plaintiff" or "Saxon") commenced the instant action on June 29, 2015, asserting federal and state claims of trademark infringement, dilution, and unfair competition against defendant Apple Inc. ("Defendant" or "Apple"). (Dkt. 1). Currently pending before the Court are Defendant's motion for summary judgment (Dkt. 77), Defendant's motions in limine seeking to exclude expert testimony by James T. Berger, Rhonda Harper, and Scott D. Woldow (Dkt. 87; Dkt. 88; Dkt. 89), and Plaintiff's motion in limine seeking to exclude expert testimony by Jeffrey Samuels (Dkt. 76). For the reasons discussed below, Defendant's motion in limine related to James T. Berger is granted in part and denied in part, Defendant's motion in limine related to Rhonda Harper is denied, Defendant's motion in limine related to Scott D. Woldow is granted in part and denied in part, Plaintiff's motion in limine is denied as moot, and Defendant's motion for summary judgment is granted.

FACTUAL BACKGROUND

The following facts are taken from Defendant's Statement of Undisputed Facts (Dkt. 79) and Plaintiff's response thereto (Dkt. 96-1), as well as the exhibits and declarations submitted by the parties. Unless otherwise noted, these facts are undisputed.

Ion exchange is "a general scientific term that describes the exchange of one type of ion (such as a sodium ion in glass) with another (such as a potassium ion in salt)." (Dkt. 79 at ¶ 5; Dkt. 96-1 at ¶ 5). In 2002, Plaintiff obtained federal trademark registration number 2,639,419 for its IONEX® mark which it uses in connection with "chemical treatment of glass; namely, chemical strengthening of glass by immersion in a molten salt bath." (Dkt. 79 at ¶ 2; Dkt. 96-1 at ¶ 2). Plaintiff offers chemical glass strengthening services using an ion exchange process under its IONEX® mark. (Dkt. 79 at ¶ 1; Dkt. 96-1 at ¶ 1). Plaintiff does not claim exclusive rights to the term "ion exchange." (Dkt. 79 at ¶ 6; Dkt. 96-1 at ¶ 6).

Plaintiff offers its glass strengthening services to businesses, not to general consumers. (Dkt. 79 at ¶ 8; Dkt. 96-1 at ¶ 9). Defendant asserts that Plaintiff has a single customer, Gerresheimer Glass Inc. ("Gerresheimer"), which makes glass cartridges that are used in auto-injectors such as an EpiPen. (Dkt. 79 at ¶¶ 9-10). In opposition, Plaintiff contends that it has also made sales under the IONEX® mark to Samsung and Nippon Electric Glass. (Dkt. 96-1 at ¶ 9). At a deposition held on May 18, 2016, Dr. Arun Varshneya ("Dr. Varshneya"), Plaintiff's president and chief executive officer, testified that the only company for which Plaintiff had "used the IONEX mark for products that have actually been released" was Gerresheimer and that Plaintiff had a "relationship" with Nippon Electric Glass. (Dkt. 89-3 at 7).¹ Plaintiff has also submitted evidence that in July 2015, it chemically strengthened 70 units of glass for Samsung. (Dkt. 96-8). The glass cartridges to which Plaintiff applies its ion exchange strengthening process do not bear the IONEX® mark or any other branding related to Plaintiff. (Dkt. 79 at ¶¶ 12-15; Dkt. 96-1 at ¶¶ 12-15).

On September 9, 2014, Defendant announced the launch of a line of products under the brand Apple Watch. (Dkt. 79 at ¶ 17; Dkt. 96-1 at ¶ 17). Defendant began selling Apple Watch products in April 2015. (Dkt. 79 at ¶ 18; Dkt. 96-1 at ¶ 18). Certain versions of the Apple Watch device include a sapphire crystal cover glass, while other versions include a glass cover that has been strengthened using an ion exchange process. (Dkt. 79 at ¶¶ 19, 23; Dkt. 96-1 at ¶¶ 19, 23). Defendant contends that it "describes the versions of the Apple Watch device that include a cover glass that has been strengthened through an ion exchange process with the shorthand term ‘Ion-X Glass,’ " (Dkt. 79 at ¶ 24), while Plaintiff maintains that Defendant "does not ‘describe’ using the word ION-X" (Dkt. 96-1 at ¶ 24). It is undisputed that Defendant "uses the term ‘Ion-X Glass’ on the back face of certain versions of the Apple Watch device, along with descriptions of other components such as ‘7000 Series Aluminum’ and ‘Composite Back.’ " (Dkt. 79 at ¶ 26; Dkt. 96-1 at ¶ 26).

Defendant has not applied to register "Ion-X" with the United States Patent & Trademark Office (the "USPTO"), nor does it include "Ion-X" on the list of trademarks it maintains on its website. (Dkt. 79 at ¶¶ 32-33; Dkt. 96-1 at ¶¶ 32-33). Defendant's linguistics expert, Dr. Patrick Farrell,² conducted an analysis of the meaning and usage of the term "Ion-X." (Dkt. 79 at ¶ 30; Dkt. 96-1 at ¶ 30). Dr. Farrell concluded that the term "Ion-X," as used by Defendant, is likely to be understood as a descriptive abbreviation for ion exchange. (Dkt. 79 at ¶ 31; Dkt. 96-1 at ¶ 31). James T. Berger, a marketing expert retained by Plaintiff whose opinions are discussed at length later in this Decision and Order, stated at his deposition that Defendant "uses ‘Ion-X’ ‘as a description of a component part’ of the Apple Watch Device." (Dkt. 79 at ¶ 34; Dkt. 96-1 at ¶ 34). Defendant's marketing expert, Dr. Ravi Dhar,³ has submitted a sworn declaration in support of Defendant's motion for summary judgment stating that, in his expert opinion, consumers are unlikely to think of "Ion-X glass" as an indicator of source. (Dkt. 86 at ¶ 7).

Plaintiff's IONEX® mark does not appear on products or advertising that a general consumer would see. (Dkt. 79 at ¶ 38; Dkt. 96-1 at ¶ 38). Plaintiff does not use media advertisements of its services and products and the sole advertisement Plaintiff has run was in the general interest newspaper The Alfred Sun in December 2016, after the instant litigation commenced. (Dkt. 79 at ¶¶ 43-45; Dkt. 96-1 at ¶¶ 43-45). Plaintiff's total marketing costs in 2014 and 2015 (the only years for which it provided such information) were $108,000. (Dkt. 79 at ¶ 49; Dkt. 96-1 at ¶ 49). Dr. Varshneya testified at his deposition that he had no reason to believe that the typical American household would be familiar with Plaintiff's IONEX® mark. (Dkt. 79 at ¶ 42; Dkt. 96-1 at ¶ 42). The IONEX® mark has not been the subject of any media coverage, nor has Plaintiff produced any studies that show consumers associate the IONEX® mark with Plaintiff. (Dkt. 79 at ¶¶ 51-52; Dkt. 96-1 at ¶¶ 51-52). Plaintiff's IONEX® mark does not appear on any actual products but is used on packing crates and invoices and on Plaintiff's website. (Dkt. 79 at ¶¶ 63-66; Dkt. 96-1 at ¶¶ 63-66).

Apple Watch devices are identified as Apple-branded products. (Dkt. 79 at ¶ 68; Dkt. 96-1 at ¶ 68). Defendant has produced documents showing that Apple Watch devices and associated advertising depict the term "Ion-X" in close proximity to Apple's word mark or logo. (Dkt. 80-19; Dkt. 81-3; Dkt. 81-5; Dkt. 81-6; Dkt. 81-16; Dkt. 81-29; Dkt. 82).⁴ Defendant requested a trademark search before it began using the term "Ion-X" commercially. (Dkt. 79 at ¶ 73; Dkt. 96-1 at ¶ 73).

Plaintiff and Defendant have not received any communications intended for the other, and the only instances of "actual confusion" that Plaintiff has identified after Defendant began using the phrase "Ion-X" are not Saxon customers, but a friend of Dr. Varshneya's and Dr. Varshneya's landlord. (Dkt. 79 at ¶¶ 81-82, 84; Dkt. 96-1 at ¶¶ 81-82, 84). Plaintiff relies on two likelihood of confusion surveys in connection with this litigation, the details of which are discussed further in the Court's analysis of Defendant's motions in limine.

Plaintiff's target customers are professional buyers of glass chemical strengthening services. (Dkt. 79 at ¶ 92; Dkt. 96-1 at ¶ 92). Plaintiff does not have an internet store or a product catalog. (Dkt. 79 at ¶ 93; Dkt. 96-1 at ¶ 93). Defendant sells the Apple Watch device to individual general consumers. (Dkt. 79 at ¶ 98; Dkt. 96-1 at ¶ 98). An Apple Watch device costs at least $249. (Dkt. 79 at ¶ 95; Dkt. 96-1 at ¶ 95). Additionally, an Apple Watch device works only as a companion to an Apple iPhone device, and so Apple Watch consumers must either be owners of an Apple iPhone device or purchase one at the same time as the Apple Watch device. (Dkt. 79 at ¶¶ 96-97; Dkt. 96-1 at ¶¶ 96-97).

PROCEDURAL BACKGROUND

Plaintiff commenced the instant action on June 29, 2015 (Dkt. 1), alleging the following causes of action related to its IONEX®, ION-KLAD®, and unregistered ION-ARMOR marks: (1) federal trademark infringement and unfair competition; (2) federal trademark dilution; (3) state law trademark infringement; (4) state law trademark dilution; and (5) state law unfair competition. (Dkt. 1). Defendant filed its Answer to Plaintiff's Complaint on August 21, 2015 (Dkt. 9), and the matter was referred to United States Magistrate Judge Leslie G. Foschio for supervision of discovery (Dkt. 10). Judge Foschio recused himself from the matter on December 1, 2015 (Dkt. 16), and the matter was thereafter referred to United States Magistrate Judge H. Kenneth Schroeder, Jr. (Dkt. 18).

On January 13, 2016, Defendant moved pursuant to 28 U.S.C. § 1659(a) to stay the matter in its entirety pending a determination of the United States International Trade...