The use of survey evidence in litigation is becoming more common – but also more complicated. Shahnaz Mahmud and James Nurton preview today's session on the use of surveys and profile consultant Gerald Ford, whose business carries out consumer studies.
One of the changes introduced in the U.S. Trademark Dilution Revision Act last year made it possible to file claims based on the "likelihood of dilution" rather than "actual dilution." Among other things, this change could lead to greater prominence for surveys in trademark litigation, as owners of famous brands use surveys to prove that consumers associate allegedly diluting marks with famous marks. If so, it will provide a further boost for the use of survey evidence in trademark cases, which has soared over the past 30 years.
Surveys only began to be widely used in U.S. litigation in the late 1970s, but since then they have become crucial to many trademark and other cases. According to Gerald Ford, a partner in the marketing research and consulting firm of Ford Bubala & Associates who has reviewed a wide range of federal opinions, in the period 1946-1980 there were just 18 surveys offered in reported cases. From 1961 to 1980 there were 193 surveys offered, and from 1981 to January 2007 there were 1,110.
The survey man
Ford is taking part in today's session "The Survey Blues: Litigation Survey Errors Causing Exclusion or Reduced Weight." He first became involved in surveys in 1972, shortly after beginning his teaching career at California State University, Long Beach, in the School of Business Administration, where he focused on marketing. A student approached him after class one day and said he had a friend who was a lawyer who was looking for a marketing expert to add some insight in a case he was working on. That friend was Robert Lyon, of counsel at law firm Jeffer, Mangels, Butler & Marmaro. "If it were not for that meeting with Bob Lyon back in 1972, I would not be here today," says Ford.
"This was before survey evidence was really being submitted as evidence to the courts. During that meeting, Bob told me he believed survey evidence was going to be the next great change and he wanted to be in on the ground floor," he adds. This made an impression on Ford and three years later he launched a consulting business with two partners, Dr. Annabelle Sartore and Stephen Bubala. Part of the business focused, as it does today, on surveys being used in litigation while another part specializes in commercial work (typically assisting a client with brand positioning and competitive analysis).
At this time, Ford also developed an interest in trademarks. "Trademarks are the love of my life," he says, adding that it's because of trademarks that he's had a "wonderful life" working in this field. So, when it comes to surveys, those relating to trademarks are his favorite: he says it's always a surprise to learn what people do and don't believe. "A lot of the focus of our research in the litigation area is on whether or not a consumer may be confused by an infringing brand," he says.
Battle of the Calvins
A recent example of a case in which a survey was a vital tool involved Calvin Klein, the famous fashion house, and The Calvin Clothing Company. Calvin Clothing had a federal trademark registration for CALVIN for boys clothing dating back to the 1930s. Calvin Klein developed his brand of clothing in the 1960s, and it has since turned into a major label. But Calvin Clothing sought to extend its trademark into men's and women's fashions. In a case in the Southern District of New York last year, Calvin Klein presented consumer research evidence which helped the court decide that allowing the extension of the CALVIN brand would dilute Calvin Klein's rights. Judge Rakoff of the Southern District said that Calvin Clothing was too late in its attempt to expand, and should have exercised its right for expansion much earlier.
Ford says there are many such examples where surveys have served an important role in a case, particularly where false advertising is concerned. "Providing consumer data that clearly shows confusion is a powerful tool," he says. Survey evidence is particularly important in determining whether there is a likelihood of confusion, which may be difficult to assess by other means. But surveys have not always been widely used.
The late 1970s was when surveys really got going. One of the first trademark cases in which survey evidence was offered was between Union Carbide and Ever Ready Light Company and concerned the EVER READY mark, owned by Union Carbide. The company sued Ever Ready Light Company alleging that it was manufacturing light bulbs and placing the Ever Ready trademark on them. A survey of consumers showed that they were clearly confused as to the mark's ownership. Says Ford: "The case relied heavily on the survey to determine infringement." The survey was accepted as admissible by the U.S. Court of Appeals for the Seventh Circuit, which laid the ground rules as to how surveys should be conducted – such as that questions and the results of a preliminary survey should be submitted to the court for a ruling on admissibility.
In 1984, the Seventh Circuit again addressed the role of survey evidence, in a dispute between Piper Aircraft Corporation and Wag-Aero, Inc. over the use of Piper's trademark rights. Piper had used surveys of owners of private planes to help establish likelihood of confusion but Wag-Aero had objected to the evidence, saying that the interviews constituted an improper survey universe and that the results were hearsay. But the district court accepted the evidence, with some caveats regarding the credibility of the interviewers. The Seventh Circuit agreed, saying: "We believe that the universe employed by Piper is sufficiently precise to warrant the district court's finding of admissibility ... Although plaintiff could have restricted the universe of the survey further, nothing compels it to have done so."
The year 1993 was the major turning point for survey evidence and all evidence developed or presented by experts. The Supreme Court addressed the admissibility of expert evidence in a case between Jason Daubert and Merrell Dow Pharmaceuticals. Daubert was one of many children born with serious birth defects after his mother had taken Bendectin, an anti-nausea drug made by Merrell Dow, during pregnancy. Merrell Dow sought summary judgment claiming its expert documents did not demonstrate a link between Bendectin and the birth defects, while the Daubert family submitted its own expert evidence, based on in vitro and in vivo animal studies, pharmacological studies, and re-analysis of other published studies. The district court granted summary judgment for Merrell Dow, and the Ninth Circuit upheld the ruling, saying that the plaintiffs' submitted evidence had not yet been accepted as reliable by scientists who had had an opportunity to closely examine and verify the methods.
In its ruling in Daubert, the Supreme Court said that judges should act as gatekeepers, and only allow as evidence what is scientifically valid and pertinent to the case. The case led to so-called Daubert motions, in which judges decide whether the testimony of expert witnesses is relevant and reliable – before that testimony is presented to a jury. The case also set out five questions that should be asked before any new technique is accepted as admissible evidence in court.
Ford says that the Daubert ruling had a significant impact not just on the use of expert witnesses, but also on surveys: "I think what has been made clear is that the Supreme Court decision cemented the fact that the quality of survey evidence will affect its admissibility."
Since Daubert, trademark surveys have become more scientific, in order to meet the relevance and reliability requirements, says Ford: "Today, as opposed to 30 years ago, they are designed much like a pharmaceutical drug test. Half of the consumers are assigned to a test cell (which contains the alleged infringing trademark) and the other half is assigned to the control cell (which contains a non-infringing trademark) and represents the placebo part of the test. This one contains the name that has caused confusion for some."
For example, he explains: "Our methodologies would include Random Digit Dial (RDD), which involves conducting surveys over the telephone. We would also employ the use of shopping center intercept surveys. This involves hiring a professional interviewing services group and asking them to go to shopping centers across the country. They would screen the public and once a person who hit a particular demographic is found, that person would be invited to go to a private room to participate in a qualified interview."
Such surveys are almost always done face-to-face or on the telephone, although the Internet presents new opportunities for survey evidence. But Ford believes it will take time before Internet surveys are widely accepted in court. He points out that even today only 70% of the U.S. population uses the Internet. That means Internet surveys have automatically lost 30% of the population, making it harder for them to claim to be accurate. Moreover, those who use the Internet tend to have higher incomes and a better education. He doesn't rule out Internet surveys completely, though. "I do think that Internet surveys will be an important factor in the future. The coverage allows for easy access and can be done at a lower cost. But there are clearly issues that need to be worked on," says Ford.
Today's panel will address these topics and others relating to the use of surveys. It will be moderated by Paul Reidl, associate general counsel at E & J Gallo Winery. The other panelists are Jerre Swann, an IP partner at Kilpatrick Stockton, and Shari Seidman Diamond, a professor at Northwestern University School of Law. Swann will examine state-of-the-art survey evidence of today and tomorrow and Diamond will discuss what the future holds for survey evidence.
Asking the right questions
The following are five "general observations" for judges to ask, according to the Supreme Court in Daubert:
- "a key question to be answered in determining whether a theory or technique is scientific knowledge that will assist the trier of fact will be whether it can be (and has been) tested"
- "[a]nother pertinent consideration is whether the theory or technique has been subjected to peer review and publication"
- "in the case of a particular scientific technique, the court ordinarily should consider the known or potential rate of error"
- "the existence and maintenance of standards controlling the technique's operation"
- "'general acceptance' can yet have a bearing on the inquiry"