Opinion

Malletier v. Dooney & Bourke, Inc.

525 F. Supp. 2d 558
2007 U.S. Dist. LEXIS 91934
2007 WL 4530868

Court: District Court, S.D. New York
Filed: Dec 13, 2007
Status: Published
Author: Scheindlin
On the bench: Shira A. Scheindlin
Cited by: 111 cases
Authority: More cited than 91.2%

finding that where an expert’s “asserted ability was based on studying statistics in graduate school 30 years earlier, ... no good faith argument can be made that 30 year-old course study is a sufficient qualification to testify as a statistician” (citing Andrews v. Metro N. Commuter R.R., 882 F.2d 705 (2d Cir.1989) (finding expert not qualified by a few experiences relevant to the subject matter))

How later courts described this case

finding that where an expert’s “asserted ability was based on studying statistics in graduate school 30 years earlier, ... no good faith argument can be made that 30 year-old course study is a sufficient qualification to testify as a statistician” (citing Andrews v. Metro N. Commuter R.R., 882 F.2d 705 (2d Cir.1989) (finding expert not qualified by a few experiences relevant to the subject matter))
omitting comparison between U.S. and European markets where the expert said "the European countries have demographics and other characteristics similar to the U.S., and have mature markets for Louis Vuitton products, whereas parts of Asia do not" but the expert "cite[d] no support for these assumptions; he relie[d] on no articles or studies to justify either the empirical assumptions or the premise that a statistical analysis is more reliable (or reliable at all) when the comparison base is substantially narrowed"
noting that plaintiff has made no effort to "connect a loss of sales in the United States to a loss of reputation on the part of Louis Vuitton and [it] cites no case law to support the proposition that a plaintiff's loss of sales coincident with a defendant’s achieving ‘critical mass’ in the marketplace necessarily implies a loss of reputation” or an erosion of the strength of plaintiff's mark
noting that in Burlington Coat Factory, Louis Vuitton claimed trade dress infringement in addition to trademark infringement, and the “calls to mind” language from that opinion refers to the "look” or trade dress of a product, which the parties agree is not at issue in the instant case

Written by the judges who cited it.

The opinion

OPINION & ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION

District courts are tasked with the “spe

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cial obligation”

of serving as the “gatekeepers” of expert evidence, and must therefore decide which experts may testify and present evidence before the jury.

Recognizing that a purported expert’s opinion often carries special weight with the jury even when unwarranted,

the Supreme Court has directed district courts .to “ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable.”

Courts are given “broad latitude” in deciding “how to determine reliability” and in making the “ultimate reliability determination”

In doing so,, however, courts are reminded that the Federal Rules of Evidence favor the admissibility of expert testimony,

and their “role as gatekeeper is not intended to serve as a replacement for the adversary system.”

Indeed, “[w]here the expert’s conclusion is drawn from a reliable methodology ... the correctness of that conclusion is still an issue for the finder of fact.”

As a result, excluding expert testimony is the exception rather than the rule,

particularly since “[vigorous cross-examination, presentation of contrary evidence, and careful instruction on the burden of proof’ can serve as the means to “attack[ ] shaky but admissible evidence.”

In cases arising under the Lanham Act, the Court’s gatekeeper function is of heightened importance because the “pivotal legal question ... virtually demands [expert] survey research ... on [issues such as] consumer perception ....”

Indeed, expert survey evidence is used more frequently in trademark law cases than in other areas of law,

and courts have been advised to carefully scrutinize survey evidence particularly where a jury rather than a bench trial is contemplated.

While errors in a survey’s methodology usually go to the weight accorded to the

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conclusions rather than its admissibility,

the Second Circuit has made clear that this is “subject, of course, to Rule 403’s more general prohibition against evidence that is less probative than prejudicial or confusing.”

Although it is the exception, “there will be occasions when the proffered survey is so flawed as to be completely unhelpful to the trier of fact ....”

and “its probative value is substantially outweighed by its prejudicial effect.”

As evident from the Report and Recommendation (“R

R”) issued by Professor Daniel J. Capra of Fordham University School of Law and Professor Barton Beebe of Cardozo School of Law (collectively, the “Special Masters”), much of the expert testimony proffered by the parties here warrants exclusion. The Special Masters acknowledged that their recommendation to exclude the majority of the expert testimony may seem “drastic.”

They justify their conclusions, inter alia, on the ground that while methodological flaws in a survey generally raise questions of weight rather than admissibility, “questions of weight, when sufficiently accumulated, become so serious as to require exclusion.”

The Special Masters further noted that the majority of the testimony presented “easy cases” for exclusion, but nevertheless, they aimed to “give each submission a fair reading with an evenhanded application of the law.”

Although the parties might regard the R & R to be severe in the scope of its recommended exclusions, the Second Circuit Court of Appeals and the lower courts within this Circuit provide support for the exclusion of survey evidence primarily under Rule 403 but also under Rule 702 where flaws are deemed to cumulatively undermine its relevance and reliability.

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Additionally, other courts considering the admissibility of expert survey evidence in trademark suits have reached similar conclusions.

Upon review of the R & R, it is beyond cavil that the Special Masters discharged their duty with careful consideration and thoughtful analysis of the parties’ opposing positions, the factual details of the expert reports and testimony at issue, the relevant evidentiary rules, and the case law. The Special Masters considered each expert’s survey on its own terms and while the number of exclusions may seem large, that is more properly attributed to the number of experts proffered by the parties than to over-exclusion by the Special Masters. Subject only to the modifications set forth in this Opinion, the Special Masters’ R & R is adopted and will be published as the Memorandum and Order of the Court.

II. BACKGROUND

On March 16, 2007, defendant Dooney & Burke, Inc. (“Dooney & Burke”) filed motions in limine to exclude the testimony and reports of plaintiff Louis Vuitton Mal-letier’s (“Louis Vuitton” or “LV”) experts: Drs. Richard A. Holub, Eugene Ericksen, Jacob Jacoby, and Mr. West Anson. On March 19, 2007, Louis Vuitton filed motions in limine to exclude the testimony and reports of Dooney & Burke’s experts: Drs. Robert N. Reitter and Bradford Cornell.

In light of the volume of the submissions on these motions, the Court appointed the Special Masters pursuant to Federal Rule of Civil Procedure 53(a)(1)(A) and (a)(1)(C) and by Order dated May 18, 2007 (the “May 18 Order”).

Pursuant to the May 18 Order, the Special Masters were directed to submit to the Court a collaborative R

R on the pending motions no later than thirty days from May 18, 2007.

On June 15, 2007, the Special Masters issued an extensive R & R spanning one hundred and ninety-two pages.

On July 5, 2007, Louis Vuitton objected to the R & R on the ground that the Special Masters had erred in excluding in their entirety the testimony and reports of its three survey experts.

Louis Vuitton also objected to the exclusion, in part, of the testimony and report of its damages expert. Dooney & Bourke moved to adopt

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the R

R as to five of the six experts at issue, and conditionally objected to the exclusion of its survey expert’s report and testimony on the level of consumer confusion in late 2006, as well as the exclusion of his trademark dilution study.

III. APPLICABLE LAW

A. Federal Rule of Civil Procedure 53

Pursuant to Rule 53(g)(1), “in acting on a [special] master’s order, the court must afford an opportunity [for the parties] to be heard and may receive evidence, and may: adopt or affirm; modify; wholly or partly reject or reverse; or resubmit to the master with instructions.”

As set forth in the May 18 Order and consistent with Rule 53(g)(3)-(4), the Court reviews de novo all objections to conclusions of law made or recommended by the Special Masters.

All findings of fact made by the Special Masters are reviewed by the Court for clear error.

Any rulings made by the Special Masters on procedural matters are to be set aside only if the Court finds an abuse of discretion.

B. Admission of Expert Testimony

The proponent of expert evidence must establish admissibility under Rule 104(a) of the Federal Rules of Evidence by a “preponderance of proof.”

Rule 702 of the Federal Rules of Evidence states the following requirements for the admission of expert testimony:

If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.

Under Rule 702 and

Daubert,

the trial judge must determine whether the proposed testimony “both rests on a reliable foundation and is relevant to the task at hand.”

A district court must act as “a gatekeeper to exclude invalid and unreliable expert testimony.”

In doing so, the court’s focus must be on the principles and methodologies underlying the expert’s conclusions, rather than on the conclusions

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themselves.

Expert testimony may not usurp the role of the court in determining the applicable law.

Although an expert “may opine on an issue of fact,” an expert “may not give testimony stating ultimate legal conclusions based on those facts,”

Expert testimony is inadmissible when it addresses “lay matters which [the trier of fact] is capable of understanding and deciding without the expert’s help.”

In addition, Rule 403 states that relevant evidence “may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury.”

“Expert evidence can be both powerful and quite misleading because of the difficulty in evaluating it. Because of this risk, the judge in weighing possible prejudice against probative force under Rule 403 ... exercises more control over experts than over lay witnesses.”

IV. DISCUSSION

As an initial matter, I address Louis Vuitton’s argument that Special Master Beebe’s previously undisclosed interactions with a former Dooney & Bourke attorney, Jeremy Sheff&emdash;who continues to practice with counsel for defendant but is no longer involved with the instant litigation&emdash;warrants his disqualification and the “disregard! ] in its entirety”

of the R & R. By letter dated July 6, 2007, Louis Vuitton informed the Court of its “recent[ ] discover[y]”

that, in 2006, Special Master Beebe had commented on a draft of Sheff s legal article on trademark law and dilution, but had failed to disclose this prior to his appointment.

Louis Vuitton contends that Special Master Beebe’s “prior relationship” with a Dooney & Bourke attorney and their “collaboration on a project specifically regarding trademark law and dilution” constitute material facts that should have been disclosed prior to his appointment.

According to Louis Vuitton, Special Master Beebe’s failure to disclose the “relationship” has created an appearance of impropriety that casts doubt on the impartiality of the R

R, particularly in light of the R & R’s “heavy weight in Dooney [ & Bourke]’s favor.”

Dooney & Bourke acknowledges that Special Master Beebe and Sheff made contact, but disputes the existence of any “relationship” that might warrant disqualification or the wholesale disregard of the R & R.

Dooney

Bourke states that Sheff “has not had any responsibility” in its representation since May 2005, and was

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not aware of Special Master Beebe’s appointment in this action.

Moreover, no Dooney & Bourke attorney was aware that Sheff had contacted Special Master Beebe for comments on a draft law review article in the past, nor did they know that Sheff had later thanked Special Master Beebe in the final version of that article.

By letter dated July 11, 2007, Special Master Beebe informed the Court that in August 2006, at Sheffs initiative, the two had briefly corresponded regarding Sheffs legal article on issues of trademark law as well as the legal market for professorships.

Special Master Beebe confirms that he has never met or spoken with Sheff, and that his limited review of Sheffs article and the correspondence itself stemmed from his duties as part of Cardozo Law School’s Hiring Committee, as well as his own sense of obligation as “a member of the legal academic community.”

Special Master Beebe further wrote that he does not recall Sheffs paper, and is not aware of Sheffs current employment situation.

Under Rule 53(a)(2), a special master “must not have a relationship to the parties, counsel, action, or court that would require disqualification of a judge under 28 U.S.C. § 455 (“section 455”) unless the parties consent with the court’s approval to appointment ... after disclosure of any potential grounds for disqualification.”

Section 455(a) requires a judge’s disqualification “in any proceeding in which his impartiality might reasonably be questioned.”

The Second Circuit has stated that section 455(a) “sets out an objective standard for recusal,”

that is, “ ‘whether an objective, disinterested observer fully informed of the facts underlying the grounds on which recusal was sought would entertain a significant doubt that justice would be done in the case.’ ”

Section 455(b)(1) requires the disqualification of a judge “[wjhere he has personal bias or prejudice concerning a party, or personal knowledge of disputed evidentia-ry facts concerning the proceeding.”

Section 455 neither requires the disqualification of Special Master Beebe nor the disregard of the R & R. The Court’s review of the correspondence between Special Master Beebe and Sheff confirms that their “connection” was isolated, brief, and limited to the discussion of Sheffs draft article and the legal market for professorships. The fact that the article’s subject matter is also trademark law and

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dilution is unremarkable given that Special Master Beebe specializes in intellectual property law. As such, it follows that his comments in that area of law are frequently solicited. Significantly, at no point in their brief correspondence did Sheff mention the instant litigation, his law firm’s representation of Dooney & Bourke, or his own prior participation in that representation.

Considering the facts underlying the request to disqualify Special Master Beebe, no objective observer “would entertain a significant doubt that justice would be done in the case”

or that the closely-reasoned and well-supported R & R should be wholesale rejected. Moreover, disqualification is not warranted under section 455(b)(1) as Louis Vuitton has offered absolutely no facts to demonstrate that Special Master Beebe harbors a “personal bias or prejudice concerning a party” or has “personal knowledge of disputed evidentia-ry facts” regarding this action.

Indeed, courts in this circuit have held that section 455 does not require disqualification or recusal in far closer cases.

While the pre-appointment disclosure of any such interactions are ideal, I am confident that this particular disclosure would not have precluded Special Master Beebe’s appointment had it been disclosed at the outset.

For the foregoing reasons, Louis Vuitton’s motion to disqualify Special Master Beebe and to disregard the R

R is denied.

A. Plaintiffs Experts

1. Dr. Eugene Ericksen

Dr. Eugene Ericksen “conducted a hybrid consumer confusion and trademark dilution survey for Louis Vuitton between December 6, 2006 and December 31, 2006 ( [the] ‘Ericksen Survey’).”

The Special Masters recommended the exclusion of the Ericksen Survey in its entirety under Federal Rules of Evidence 403 and 702 due to the cumulative effect of a number of flaws. These flaws include the use of an improper stimulus, the poor choice of a control bag, the failure to instruct respondents against guessing, the improper classification of respondents, as well as other significant

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methodological errors.

Moreover, with respect to the trademark dilution component of the Ericksen Survey, the Special Masters found that Dr. Ericksen’s analysis was plagued by the same methodological flaws present in the confusion component, and also “proceeds from a fundamental misunderstanding of the theory of dilution by blurring,”

improperly conflating it with consumer confusion.

Finding no clear error in the Special Masters’ factual findings and reviewing their legal conclusions de novo, I adopt the Special Masters’ recommendation that Dr. Ericksen’s report and testimony be excluded in their entirety under Rules 702 and 403. The cumulative effect of the flaws outlined in the R & R render the report and testimony unreliable, and any probative value is substantially outweighed by the danger of unfair prejudice and misleading the jury.

2. Dr. Jacob Jacoby

Dr. Jacob Jacoby was retained by Louis Vuitton to conduct a trademark confusion survey (the “Jacoby Confusion Survey”) and a dilution survey (the “Jacoby Dilution Survey”), both of which have been discussed by this Court in a prior opinion.

As I have previously noted and as the Special Masters have also found, the “Ja-coby Confusion Survey [Report] does not, in fact, describe the actual survey that was undertaken.”

The Special Masters found that the facts strongly suggest'that the Jacoby Confusion Survey was “not reported in an accurate manner and ... was not conducted in an objective manner,”

and is therefore not reliable under Rule 702. The Special Masters also found significant flaws in the survey including the improper definition of its universe,

the use of a survey question that asked respondents for a legal conclusion,

, and the improper classification of certain respondents as confused “based on factors not relevant to the marks at issue.”

In addition, the Special Masters found numerous, fundamental deficiencies in the Jacoby Dilution Study such as a lack of fit between the survey’s questions and the law of dilution,

the improper coding and classification of several responses to the survey thus resulting in an “overstate[ment] of the number of respondents who were ‘diluted,’ ”

and the unexplained inconsistency between the results of Dr. Jacoby’s pilot dilution study, which found “little to no net dilution”

and the subsequent survey which found dilution.

Finding no clear error in the Special Masters’ factual findings and reviewing their legal conclusions de novo, I adopt the Special Masters’ recommendation that Dr. Jacoby’s report and testimony be excluded

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in their entirety under Rules 702 and 403. In considering the cumulative effect of the numerous flaws identified by the Special Masters, it is clear that Dr. Jacoby’s report and testimony on the issues of both trademark confusion and dilution are unreliable. Moreover, any probative value is substantially outweighed by the danger of unfair prejudice and misleading the jury.

3. Dr. Richard A. Holub

Dr. Richard Holub was retained by Louis Vuitton “to study and compare the use of color in the multicolor handbags of Dooney & Bourke and Louis Vuitton.”

Specifically, Louis Vuitton offers Dr. Ho-lub’s testimony “for two purposes: (1) to prove the likelihood of confusion presented by Dooney [ & Bourkej’s multicolor logo; and (2) to prove Dooney [ & Bourkej’s willful intent to copy the Louis Vuitton Multicolore Monogram mark.”

The Special Masters recommended that Dr. Ho-lub’s report and testimony be excluded in their entirety.

With respect to the first purpose, the Special Masters concluded that Dr. Ho-lub’s highly technical report and testimony on the similarity of colors between the parties’ handbags would not be helpful to the jury because the jury members can observe for themselves whether Dooney & Bourke’s mark is confusingly similar to Louis Vuitton’s Multicolore Monogram mark.

The jury can make that determination without the help of an expert and certainly without the expert’s “digital photography ... technical jargon and colorim-eter approximation.”

Finding no clear error in the Special Masters’ factual findings and reviewing their legal conclusions de novo, I adopt the Special Masters’ recommendation that Dr. Holub’s report and testimony should be excluded to the extent they are offered for the purpose of proving the likelihood of confusion.

With respect to Dr. Holub’s report and testimony offered for the purpose of proving intent to copy, the Special Masters noted that this presented a closer question

as “Dooney

Bourke’s intent is potentially important in this case because, among other things, Louis Vuitton is seeking an accounting of Dooney & Bourke’s profits, and such an accounting is possible only upon a finding of willful intent on Dooney & Bourke’s part.”

Further, with respect to damages, if Louis Vuitton can establish that Dooney & Bourke’s actions were intentionally deceptive, that gives rise to a rebuttable presumption of confusion.

Indeed, the Special Masters recognized the potential probative value of Dr. Holub’s testimony on the issue of intent, noting “while it is true that Dooney & Bourke would not be liable for using even the same exact colors as Louis Vuitton ..., it is also true that evidence of copying the colors is at least probative of an intent

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to copy the Louis Vuitton mark itself.”

Accordingly, the Special Masters stated that “on the question of intent[,] it could be helpful for the jurors to know exactly how much of the pallette was used in each mark, and the exact extent to which the colors used by Dooney & Bourke overlap with the colors used by Louis Vuitton.”

“If Dooney & Bourke chose identical or very similar color combinations as were chosen by Louis Vuitton, that fact at least tends to prove an intent to infringe on Louis Vuitton’s mark.”

Ultimately, however, the Special Masters concluded the risk is too great that the jury may be influenced by Dr. Holub’s testimony and improperly use it toward resolving the likelihood of confusion issue, even if instructed by the Court to consider it only for the issue of intent.

Moreover, according to the Special Masters, the probative value of expert testimony on the overlapping colors, even on the intent issue, is diminished by the fact that the colors are not themselves the mark that Louis Vuitton seeks to protect.

Additionally, the similarity between the colors may be supported by inferences other than an intent to copy, such as fashion trends.

There is no clear error in the Special Masters’ factual findings. Reviewing their legal conclusions de novo, however, I hold that Dr. Holub’s testimony and report are admissible for the purpose of proving intent. Dr. Holub, however, may only testify to the extent of the overlapping use of colors in the Dooney

Bourke and Louis Vuitton multicolored monogram handbags.

In doing so, I adopt the Special Masters’ suggestion that, should the Court allow Dr. Holub to testify on intent, he should “not be permitted to testify that his findings

in fact

indicated that Dooney & Bourke intentionally copied Louis Vuitton’s colors.”

Although I recognize that there is a risk that the jury “may take [Dr. Holub’s] testimony [on the intent issue] as an instruction on how to decide the question of likelihood of confusion,”

that risk can be minimized by a limiting instruction.

In fact, although the Special Masters ultimately rejected this approach, they did note that the risk of prejudice and confusion posed by Dr. Holub’s testimony may be “lessened somewhat by a limiting instruction.”

This Court has routinely relied upon limiting instructions to “remind[] the jury of its role and of the limits of expert testimony [and] clarify the extent of their consideration of such testimony.”

Further, the Second Circuit has recognized a “strong presumption that ju-

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ríes follow limiting instructions.”

With respect to the factors that the Special Masters found to diminish the testimony’s probative value, including the fact that the mark at issue consists of more than just colors, as well as inferences that may support color overlap other than intent to copy, those are relatively minor and can be addressed on cross-examination and opening and closing statements.

The probative value of Dr. Holub’s report and testimony, limited to the overlap of colors between the Louis Vuitton and Dooney

Bourke marks, is not substantially outweighed by the dangers of unfair prejudice or confusing the jury. As a result, I will allow limited testimony by Dr. Holub.

4. Mr. Weston Anson

Mr. Weston Anson was retained by Louis Vuitton to review financial documents and accounting information produced by Dooney & Bourke during the course of discovery and “to prove the amount of net profit that Dooney

Bourke derived from its assumed infringement on the Louis Vuitton Multicolore [Monogram] mark; and [] to prove that Louis Vuitton suffered dilution of its Mul-ticolore Monogram mark as a result of Dooney

Bourke’s infringement.”

The Special Masters recommended that Mr. Anson’s report and testimony be excluded but for his testimony on the “amount of net profits that Dooney

Bourke obtained from the allegedly infringing sales.”

Mr. Anson’s method of calculating net profits deducted only those costs directly incurred in the production of the allegedly infringing Dooney & Bourke handbags, but did not deduct a proportionate amount of general expenses such as overhead.

Because the deduction of general expenses is required only if defendant can prove the connection between those expenses and the sales of the allegedly infringing items, the Special Masters qualified their recommendation to permit Mr. Anson’s testimony.

Specifically, they recommended that Mr. Anson be permitted to testify to his calculation of Dooney & Bourke’s net profits, but only if Dooney & Bourke is unable to connect any general expenses to the sales generating those profits.

100

If, however, Dooney

Bourke is able to do so, then Mr. Anson’s testimony must be adjusted to reflect the deduction.

101

The Special Masters found that Mr. An-son’s dilution study does not “fit” with the substantive law of dilution because he “does not purport to connect a loss of sales [by Louis Vuitton] in the United States to a loss of reputation on the part of Louis Vuitton.”

102

The Special Masters further found that Louis Vuitton had failed to cite any case “to support the proposition that a plaintiffs loss of sales coincident with a defendant’s achievefment of a] ‘critical mass’ in the marketplace necessarily implies a loss of reputation.”

103

Moreover, the Special Masters identified a number of flaws in the dilution study. Chief among

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those flaws is a lack of fit between the basic premise of the

study

— ie., that Louis Vuitton suffered a loss of sales in the United States resulting from Dooney & Bourke’s marketing efforts — and Louis Vuitton’s oft-expressed position in this liti

gation

— ie., that it does not claim lost profits.

104

The Special Masters also found Mr. Anson’s opinion “that there is a statistically significant difference between sales of [Louis Vuitton’s] handbags in the United States and the rest of the world .... ” to be unreliable under Rule 702 due to his complete reliance on another expert who has not been produced in this action.

105

The Special Masters concluded that Mr. Anson’s testimony on dilution constitutes “nothing but conduit testimony from an expert on a matter outside his field of expertise.”

106

Finding no clear error in the Special Masters’ factual findings and reviewing their legal conclusions de novo, I adopt the Special Masters’ recommendation that Mr. Anson’s report and testimony be admitted in part and excluded in part, as set forth above, under Rules 702 and 403. In light of the number of serious flaws that plague Mr. Anson’s report and testimony, specifically on the issue of dilution, the probative value is substantially outweighed by the prejudicial effect and the serious potential to mislead the jury.

B. Defendant’s Experts

1. Dr. Bradford Cornell

I find no clear error in the Special Masters’ factual findings with respect to Dr. Bradford Cornell’s testimony and report on the issue of Louis Vuitton’s damages and Dooney

Bourke’s profits, and come to the same legal conclusions upon a de novo review. For those reasons and because neither party objects to the adoption of the R & R with respect to Dr. Cornell,

107

I adopt the Special Masters’ recommendation and allow his testimony and report subject to the limitations set forth in the R

2. Dr. Robert N. Reitter

Dr. Robert N. Reitter was retained by Dooney & Bourke to conduct a trademark confusion survey and trademark recognition survey in 2004.

108

Both surveys have been previously discussed by the Court.

109

In 2006, Dr. Reitter was once again commissioned to conduct a second trademark confusion survey and a dilution survey.

110

The Special Masters recommended that Dr. Reitter’s reports and testimony on all of these surveys be excluded in their entirety.

Dooney & Bourke “does not challenge the Special Masters’ recommendation with respect to the 2004 [trademark confusion survey] or with the efforts to revive it”

111

through the 2006 confusion survey. Rather, Dooney & Bourke objects on the ground that the Special Masters considered the 2006 confusion survey solely as a means to revive the 2004 confusion survey

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previously criticized by the Court.

112

As such, Dooney & Bourke contends that the Special Masters failed to regard the 2006 confusion survey, standing alone, “as an independent study that found

de minimis

confusion as of late 2006”

113

— specifically, November and December 2006.

114

Although the Special Masters primarily regarded the 2006 confusion survey as a response to the Court’s criticisms of the 2004 survey, the Special Masters did conduct a careful analysis of the 2006 confusion survey, independent of the 2004 survey. In doing so, the Special Masters identified a number of flaws in the methodology of the 2006 confusion survey and explicitly noted that the 2006 survey “suffers from some of the same methodological flaws that beset the 2004 survey.”

115

These flaws include: inappropriate selection of non-upscale malls for the survey; a low screening standard for respondents; a “far from ideal”

116

sampling method that precluded within-location comparisons among respondents who were exposed to the control bag versus Dooney & Bourke bags with name hangtags versus Dooney

Bourke bags without name hangtags;

117

the low number of respondents participating in the survey;

118

and the failure to employ a methodology involving sequential presentation or “line-up” of stimuli which better approximates marketplace conditions.

119

While the Special Masters remarked that each methodological flaw, standing alone, may not mandate exclusion, each flaw diminished the 2006 confusion survey’s reliability and probative value.

120

Although a survey measuring the level of consumer confusion in late 2006 is of some probative value, the cumulative effect of the methodological flaws identified by the Special Masters so diminishes the reliability and probative value of the 2006 confusion survey that its exclusion is warranted under Rules 403 and 702.

With respect to Dr. Reitter’s dilution study conducted in 2006, the Special Masters recommended that it be excluded in its entirety because “as designed, it could provide no reliable indication of whether the [Louis Vuitton] Multicolore mark was diluted.”

121

Finding that Dr. Reitter’s dilution study “ ‘reveals little except that there is a high consumer recognition of the

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Louis Vuitton Monogram Multicolore marks’ ” and failed to measure dilution,

122

the Special Masters recommended exclusion under Rules 702 and 403. Specifically, they concluded that Dr. Reitter failed to “preclude the possibility that ... the recognition level of the Louis Vuitton Mul-ticolore [m]ark might have been higher but for the existence in the marketplace of Dooney & Bourke It-Bags.”

123

As such, it was conducted pursuant to “fundamentally flawed”

124

reasoning that rendered it irrelevant to the dilution question and inadmissible. In addition, the Special Masters addressed other flaws that do not, standing alone, require exclusion but “quell[ ] any doubt about [the study’s] exclusion.”

125

These flaws include the improper grouping of handbags in the study, which failed to simulate market conditions,

126

and the failure to utilize follow-up questions to prompt respondents to explain their answers.

127

Taken cumulatively, the methodological flaws identified by the Special Masters and the “fundamentally flawed reasoning”

128

of the Reitter dilution study warrant its exclusion. Dooney

Bourke objects to the Special Masters’ recommended exclusion on the ground that “surely it is ‘relevant’ to know how strong the claimed mark is as a source-identifier-”

129

But the study’s conclusion that the Louis Vuitton Multico-lore Monogram mark is still very strong does not address whether it has been diluted — rather, it speaks more to the strength of the mark itself and its fame, neither of which are disputed. To admit it as a “dilution” study poses a real threat of unfair prejudice and of misleading the jury. Rather than “settling] too high a bar for what evidence is ‘relevant,’ ” as Dooney

Bourke contends,

130

the Special Masters properly found that the Reitter dilution study “casts no light” on the issue of dilution and amounts to an “ad hoc use of a new theory of testing dilution”

131

that is unreliable. Finding no clear error in the Special Masters’ factual findings and reviewing their legal conclusions de novo, I adopt the Special Masters’ recommendation that Dr. Reitter’s report and testimony, including the 2006 confusion study and the dilution study, be excluded in their entirety.

V. CONCLUSION

For the reasons stated above, plaintiffs motions are granted in part and denied in part, and defendant’s motions are denied. The Clerk of the Court is directed to close the following motions: [Docket Entry Nos. 188, 194, 199, 204, 206]. A teleconference is scheduled for December 21, 2007, at 11:45 a.m.

SO ORDERED.

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REPORT AND RECOMMENDATION OF THE SPECIAL MASTERS

Professors BARTON BEEBE and DANIEL CAPRA, Special Masters.

I.Legal Standards for Determining Admissibility of Expert Testimony IC

A. Rule 702 and Daubert. U<) fc-lO

B. Rule 403 . W OO

C. Survey Evidence. OO lo

D. Daubert Hearings. T — f OO

II. The Survey Experts. UN|

A. Dr. Eugene Ericksen. UNI

1. Facts. TO

a. The Ericksen Survey Universe. TO

b. The Ericksen Survey Stimuli. •■ÑP

c. The Ericksen Survey Questions. C*

d. Dr. Ericksen’s Confusion Analysis. ir-

e. Dr. Ericksen’s Blurring Analysis . UJ

2. Discussion. T-1

a. Dr. Ericksen Used an Improper Stimulus. r-1

b. Dr. Ericksen’s Control Was Flawed.

c. Dr. Ericksen’s Confusion Analysis Is Flawed.

d. Dr. Ericksen’s Blurring Analysis Is Flawed. TO

3. Summary on Admissibility of Testimony, Survey, and Expert Report of Dr. Ericksen .

B. Dr. Jacob Jacoby .

1. The Jacoby Confusion Survey.

2. The Jacoby Dilution Survey.

a. Facts .

i. The Jacoby Dilution Survey Universe.

ii. The Jacoby Dilution Survey Stimuli.

iii. The Jacoby Dilution Survey Questions .

iv. The Jacoby Dilution Survey Dilution Analysis.

v. The Jacoby Dilution Survey Pilot Survey.

b. Discussion.

i. The Jacoby Dilution Survey is Not Relevant to the Issue of Dilution.

ii. The Flaws in the Jacoby Dilution Survey’s Categorization of Results .

iii. The Objectivity of the Jacoby Dilution Survey.

C. Robert N. Reitter.

1. Facts.

a. The 2004 Reitter Confusion Survey.

i. The 2004 Reitter Confusion Survey Universe and Sample

ii. The 2004 Reitter Confusion Survey Stimuli.

iii. The 2004 Reitter Confusion Survey Questions.

iv. The 2004 Reitter Confusion Survey Confusion Analysis ..

b. The 2006 Reitter Confusion Survey.

i. The 2006 Reitter Confusion Survey Universe and Sample

ii. The 2006 Reitter Confusion Survey Stimuli.

iii. The 2006 Reitter Confusion Survey Questions.

iv. The 2006 Reitter Confusion Survey Confusion Analysis ..

c. The 2006 Reitter Dilution Survey.

i. The 2006 Reitter Dilution Survey Universe and Sample..

ii. The 2006 Reitter Dilution Survey Stimuli.

iii. The 2006 Reitter Dilution Survey Questions.

iv. The 2006 Reitter Dilution Survey Dilution Analysis.

*577

2. Discussion.

a. The Reitter Confusion Surveys.

b. The Flaws in the 2004 Survey.

i. Reading Test.

ii. Ineffective Control Bag .

iii. Coding Errors.

iv. Choice of Malls and Universe of Respondents.

v. The “Permission” Question .

vi. Preliminary Summary on the Admissibility of the 2004 Reitter Confusion Survey. 05 CO

c. Flaws in Methodology of the 2006 Confusion Survey. 05 CO

i. Mall Selection. Oí CO

ii. Sampling Method. 05 CO

iii. Sample Sizes. 05 CO

iv. Eveready Presentation. 05 CO

v. Other Alleged Methodological Flaws in the 2006 Confusion Survey . CO CO

(a) Poor Choice of Control Bag. CO CO

(b) Reading Test. CO CO

d. The Relation Between the 2004 Reitter Confusion Survey and the 2006 Reitter Confusion Survey. 05 CO ^

e. The 2006 Reitter Dilution Survey. 05 CO 05

i. The Relevance of the 2006 Reitter Dilution Survey. 05 CO 05

ii. The 2006 Reitter Dilution Survey Stimuli. 05 CO <1

iii. Reitter’s Failure to Ask the 2006 Dilution Survey Respondents to Explain Their Answers. OO CO CO

3. Summary on Reitter Surveys. 05 CO CO

III. Dr. Richard A. Holub.

A. Facts.

B. Discussion.

1. Opinion offered to prove the likelihood of confusion.

a. Qualifications:...

i. Colorimetry...

ii. Statistical probability.

b. Reliability of conclusions on statistical probability.

c. Proper Subject Matter.

2. Opinion offered to prove intent.

a. Reliability.

b. Proper Subject Matter.

e. Rule 403.

C. Summary on Dr. Holub.

IV. The Damages Experts. 05 cn

A. Weston Anson. 05 cn

1. Facts. 05 cn

2. Discussion. 05 ai

a. Opinion Offered to Prove Dooney & Bourke’s Net Profits. 05 cti

i. Qualifications. 05 cn

ii. Statements in Anson’s Report Concerning the Existence of Infringement and Dilution. 05 or to

iii. Reliability of Methods Used to Determine Dooney & Bourke’s Profits. ^ iO CO

(a) Use of “incremental method” of deducting costs.

(b) Attributing 100 percent of the net profits to the alleged infringement.1. LO co

b. Opinion on Dilution. CO CO

i. Lack of “Fit”/ Problem of Prejudice and Jury Confusion-CO co

*578

ii. Lack of “fit” with the substantive law of dilution.662

iii. Improper reliance on another expert.664

iv. Unreliability of regression analysis .666

3. Summary.669

B. Dr. Bradford Cornell.669

1. Facts.669

2. Discussion.671

a. Qualifications:.672

b. The Challenge to Dr. Cornell’s Four-Factor Test for Assessing Damages.672

c. The Challenge to Cornell’s Statistical Analysis of Louis Vuitton’s United States Sales.675

d. The Challenge to Cornell’s Report as Exceeding the Proper Scope of Expert Testimony.677

e. The Challenge to Cornell’s Use of the “Full Absorption” Method.678

3. Summary.679

V. Conclusion.679

Louis Vuitton Malletier (“Louis Vuitton”) brings this action against Dooney & Bourke, Inc. (“Dooney & Bourke”) alleging trademark infringement, trademark dilution, and unfair competition under the Lanham Act, 15 U.S.C. §§ 1051

et seq.,

and Section 301 of New York General Business Law. In her opinion dated August 27, 2004,

Louis Vuitton Malletier v. Dooney & Bourke, Inc.,

340 F.Supp.2d 415 (S.D.N.Y.2004)

(“Vuitton

/”), Judge Shira A. Scheindlin denied Louis Vuitton’s motion for a preliminary injunction. In its opinion dated June 30, 2006,

Louis Vuitton Malletier v. Dooney & Bourke, Inc.,

454 F.3d 108 (2d Cir.2006)

(“Vuitton

II”), the Second Circuit affirmed in part and vacated and remanded in part Judge Scheind-lin’s ruling in light of the Second Circuit’s opinion in

Louis Vuitton Malletier v. Burlington Coat Factory Warehouse Corp.,

426 F.3d 532 (2d Cir.2005). In anticipation now of a jury trial, the parties have fully submitted five motions in limine seeking to exclude the reports and testimony of six proposed experts. By Order dated May 18, 2007, Judge Scheindlin appointed the undersigned as Special Masters in this case and directed us to submit a collaborative Report and Recommendation to aid the Court in resolving these motions in limine.

For the reasons given below, we respectfully recommend that (1) Dooney & Bourke’s Motion in Limine to Exclude the Reports, Testimony, and Opinions of Dr. Eugene Ericksen and Dr. Jacob Jacoby be granted in its entirety, (2) Louis Vuitton’s Motion in Limine to Exclude Dooney & Bourke’s Proposed Expert Opinions, Testimony, and Surveys of Dr. Robert N. Reit-ter be granted in its entirety; (3) Dooney & Bourke’s Motion in Limine to Exclude the Report, Testimony, and Opinions of Richard A. Holub be granted in its entirety (4) Dooney & Bourke’s Motion in Li-mine to Preclude the Report, Testimony, and Opinions of Mr. Weston Anson be granted in part and denied in part, and (5) Louis Vuitton’s Motion to Exclude Defendant Dooney & Bourke’s Proposed Expert Testimony of Dr. Bradford Cornell be granted in part and denied in part.

The underlying facts of this case are set forth in

Vuitton I,

340 F.Supp.2d at 424-428 , and

Vuitton II,

454 F.3d at 112-13 , familiarity with which is assumed. In what follows, we use the term “Louis Vuitton Monogram Multicolore Mark” to denote the Louis Vuitton mark consisting of “(1) the interlocking initials [“L” and “V”] interspersed in a repeating pattern with

*579

the registered geometric shapes, (2) used in combination with the thirty-three special Murakami colors, (3) set against a white or black background.”

Vuitton I,

340 F.Supp.2d at 438 .

See also

RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 25, comment f (1995), Reporter’s Note (“Although in a particular case the use of another’s mark may confuse some consumers and dilute the value of the mark in the minds of other consumers, the state of mind required for confusion and dilution are distinct and inconsistent. The confused consumer believes that the actor’s use of the mark is connected with the trademark owner, and thus for such consumers the use does not dilute the distinctiveness of the mark.”). We recognize that dicta in the Second Circuit has confused the binary relationship between confusion and dilution.

Compare Nabisco, Inc. v. PF Brands, Inc.,

191 F.3d 208, 219 (2d Cir.1999) (“A junior use that confuses consumers as to which mark is which surely dilutes the distinctiveness of the senior mark.”),

with: McCarthy,

§ 24.72 (referring to the Nabisco dictum as a “misunderstanding of the nature of ‘dilution’ by blurring.”). Nevertheless, the basic logic of the theory of dilution by blurring requires that any consumer — or survey respondent — who is confused cannot also demonstrate blurring. To the extent that the respondents whom Dr. Ericksen classified as “confused” make up a large majority of those whom he also counted as demonstrating blurring, we find this to be an additional independent basis to reject Dr. Ericksen’s survey results and testimony with respect to blurring.

3. Summary on Admissibility of Testimony, Survey, and Expert Report of Dr. Ericksen

We conclude that Dr. Ericksen’s survey, when offered to prove confusion and especially when offered to prove dilution, is inadmissible in its entirety under Rules 702 and 403. Accordingly, Dr. Ericksen’s expert report should be excluded and he

*600

should not be permitted to testify to any aspect of his survey.

B. Dr. Jacob Jacoby

Louis Vuitton retained Dr. Jacob Jaco-by

to conduct a trademark confusion survey (the “Jacoby Confusion Survey”),

which Judge Scheindlin has previously reviewed,

Vuitton I,

340 F.Supp.2d at 442-45 , and a trademark dilution survey (the “Jacoby Dilution Survey”),

which Judge Scheindlin has also previously discussed,

id.

at. 449-51. The Jacoby Confusion Survey consisted of a mall intercept survey in which respondents were shown an advertisement for Louis Vuitton’s Murakami bags and then exposed to a Dooney & Bourke It-Bag and two control bags made by third-party manufacturers.

The respondent was then asked a series of questions designed to elicit whether the respondent believed that any of the bags placed before her (1) “came from the same company whose bag was shown in the ad,” (2) was “put out” by a company that has “some business relationship” with the company whose bag was shown in the advertisement, or (3) came from a company that needed to “get permission or a license from the company whose bags were shown in the ad.”

Based on the respondents’ answers to these and related follow-up questions, and taking into account their responses to the control bags, Dr. Jacoby found that a net of eleven percent of the respondents incorrectly believed that the IL-Bag “came from” Louis Vuitton, a net of seven percent believed that the It-Bag was “put out” by a company that has “some business relationship” with Louis Vuitton, and a net of seven percent believed that the Ib-Bag came from a company that needed to obtain permission or a license from Louis Vuitton.

The Jacoby Dilution Survey consisted of a mall intercept survey in which ninety-six respondents were shown two It-Bags, two Murakami bags, and a control bag in the form of a Dooney & Bourke bag bearing the interlocking initials “D” and “B” imprinted in red on a red background. While being shown these bags, the respondents were asked a lengthy series of questions designed, in essence, to elicit how knowledge of the availability in the marketplace of the It-Bags influenced the respondent’s perception of the Murakami bags and vice-versa. Dr. Jacoby found that twenty-three percent of the respondents “reported” “feeling one or more” of the following “aspects of dilution”

for

*601

reasons relating specifically to the IN Bags’ use of the Dooney & Bourke Multicolor Monogram Mark: nineteen percent reported a “negative reaction” to the Mu-rakami bags or otherwise thought the IN Bags were a “copy” of the Murakami bags; one percent were “less likely to buy” the Murakami bags; five percent were “more likely to buy” the INBags; fourteen percent felt the Murakami bags were “less distinctive;” three percent felt they were “less valuable;” and seven percent felt they were “less exclusive.”

With respect to the Jacoby Confusion Study, we find that there are very serious discrepancies between that Study Report’s account of the conduct of the survey and the survey that was actually conducted, as Dr. Jacoby described it in his deposition testimony — discrepancies that Judge Scheindlin has already noted.

Vuitton I,

340 F.Supp.2d at 444 . The Jacoby Confusion Study Report did not accurately report the data collected and moreover the Jacoby Confusion Study was not conducted in a manner to ensure objectivity.

See

MANUAL FOR COMPLEX LITIGATION, FOURTH § 11:493 (Federal Judicial Center 2004) (factors relevant to determining whether a survey “conform[s] to generally recognized statistical standards” include whether “the data gathered were accurately reported” and whether “the process was conducted so as to ensure objectivity.”). Because of the seriousness of these discrepancies, as well as other significant methodological flaws in the survey, we will devote relatively brief attention to it. With respect to the Jacoby Dilution Survey, we find that the survey is not relevant to the issue of dilution and that it suffers from several serious methodological flaws, rendering it inadmissible under Rules 702 and 403. We therefore recommend that Dr. Jacoby’s testimony be excluded in its entirety and that his reports if offered be excluded as well.

1. The Jacoby Confusion Survey

In its initial overview of the survey’s “principal findings and conclusions,” the Jacoby Confusion Study Report describes the survey process as follows:

After the respondent indicated she was finished looking at the advertisement, it was removed from view. Next, the respondent was shown a set of three bags, one of the allegedly infringing Dooney bags and two “control” bags (a Coach bag and either an Etienne Aigner or Guess bag). With these bags in view, the respondent was then asked a series of questions designed to determine the degree to which (if at all) she was confused either as to source, affiliation or connection, and/or sponsorship or approval.

After eliminating two respondent data sheets that failed the quality checks at check-in and another respondent data sheet that failed the post-survey validation, data analysis was confined to the remaining 109 respondent data sheets.

The Jacoby Confusion Study Report subsequently states: “To be able to show that the effects obtained were not due to having used a single, perhaps atypical, Dooney bag, respondents were shown one of two Dooney Test bags. Approximately half the respondents were shown Dooney’s large ‘It Bag’ Wristlet; the other half was shown Dooney’s ‘It Bag’ ID/coin purse.”

The clear implication of this statement is that the survey used two bags as stimuli, with the “Wristlet” bag exposed to approximately half of the 109 respondents, and

*602

the “ID/coin purse” bag shown to the other half. Notably, the report does not provide in an appendix any photographs of the Dooney & Bourke bags used as stimuli in the survey, though it does provide a photograph of the advertisement used to prime the respondents. Thus, the reader of the report has no way of knowing, for example, what the background color of the “Wristlet” bag was or what the background color of the “ID/coin purse” bag was. Also notable is that the Jacoby Confusion Study does not specify what proportion of respondents exposed to the “Wrist-let” were coded as confused, nor does it specify what proportion of the respondents exposed to the “ID/coin purse” were coded as confused. Instead, the report sets forth a table that purports to summarize the survey’s results with respect to the 109 respondents surveyed.

This table contains a column headed simply “D

B.” The clear implication of this heading is that it refers to results obtained with respect to both the “Wristlet” and the “ID/coin purse,” and only the “Wristlet” and “ID/coin purse.”

As Judge Scheindlin has recognized,

Vuitton I,

340 F.Supp.2d at 444 , the Jaco-by Confusion Survey Report does not, in fact, describe the actual survey that was undertaken. As Judge Scheindlin explained:

Dr. Jacoby testified that the survey was conducted in two parts. During phase one, fifty-eight respondents were interviewed, and shown one of four different Dooney

Bourke bags or accessories. A percentage of the respondents expressed confusion as to each of the four bags as follows: 10 % (Bag 33); 7% (Bag 34); 6% (Bag 35); 5% (Bag 36). During phase two, fifty-one additional interviews were performed, and rather than being shown four bags, respondents were shown only one of the four Dooney & Bourke items-Bag 33. Dr. Jacoby explained that, although phase two of the study should have been run with two bags, the white and black wristlets, due to a “mistake” on the part of Dr. Kaplan (who was responsible for the interview process), only the white wristlet was used.

Id.

Louis Vuitton offers no explanation for why the report failed to state 1) that the survey was conducted in two phases, the first of which used

four

different IL-Bags, or 2) that Dr. Kaplan made a “mistake” in his presentation of the survey stimuli to the survey respondents, so that in the second phase only

one

Dooney

Bourke bag was used — the one that happened to yield the highest confusion level in the first phase of the survey.

See

Shari Seidman Diamond,

Reference Guide on Survey Research,

in REFERENCE MANUAL ON SCIENTIFIC EVIDENCE at 270 (Federal Judicial Center 2000) (“The completeness of the survey report is one indicator of the trustworthiness of the survey and the professionalism of the expert who is presenting the details of the survey.”); and

id.

(noting that a survey report should provide in detail all visual exhibits used and a description of special scoring).

In his deposition testimony, Dr. Jacoby offers an explanation for the disjointed nature of the survey: the survey initially took the form of an extended questionnaire that sought to test both for confusion and dilution, but after it became apparent that respondents were fatigued by the number of questions, the survey was broken into a confusion component and a dilution component. Dr. Jacoby then retained the confusion-related data he had already collected with respect to the fifty-eight respondents interviewed up to that time, and sought to

*603

interview an additional set of respondents to achieve a sufficient sample size. This may be a reasonable explanation for the peculiar conduct of the survey itself, but the Jacoby Confusion Survey Report alludes to none of this, and appears to have been written in a deliberately ambiguous manner.

More significantly, the Jacoby Confusion Survey Report’s failure to explicate the survey’s results with respect to “Bag 35” and “Bag 36” and the survey’s failure to continue to use those stimuli, as well as Bag 34, very strongly suggest that the survey was not reported in an accurate manner and that the survey was not conducted in an objective manner. We therefore conclude that Louis Vuitton has not proved that the Jacoby Confusion Survey was produced through a reliable application of reliable methods, and accordingly the Survey should be excluded under Rule 702.

Furthermore, because of the serious questions surrounding the implementation of survey methods and the reporting of its results, the Jacoby Confusion Study’s probative value, if any, is substantially outweighed by its potential to mislead the jury and to create unfair prejudice. Therefore it should be excluded under Rule 403 as well.

See Sterling Drug, Inc. v. Bayer AG,

14 F.3d 733, 741 (2d Cir.1994) (“To be probative on the issue of confusion, a survey must have been fairly prepared and its results directed to the relevant issues.” (citation omitted)).

While we find that the above concerns are alone sufficient to require the exclusion of the Jacoby Confusion Survey, we note other fundamental problems with the survey that, taken together with the problems of disjointed implementation and ambiguous reports, leave no doubt that the cumulative errors render the survey inadmissible.

See Mastercard Int’l Inc. v. First Nat’l Bank of Omaha,

No, 02 Civ. 3691, 2004 WL 326708 , at *30 (S.D.N.Y. Feb.23, 2004) (court excludes survey on the basis of cumulative errors, even if each error considered alone might be thought a question of weight). First, the survey improperly defined its universe. The Jacoby Confusion Survey Report states that “the relevant population was defined as females who were 16 years of age or older and were potential Louis Vuitton or Dooney & Bourke customers (or potential customers of both).” The report continues:

To be classified as a potential Louis Vuitton customer, in the past year or two, the respondent had to have bought a handbag costing more than $350, or a purse or wallet costing more than $100, or say she was likely to do so in the next year or so. To be classified as a potential Dooney & Bourke customer, in the past year or two, the respondent had to have bought a handbag costing $100 to $350, or a purse or wallet costing $50 to $100, or say she was likely to do so in the next year or so. Some respondents qualified for both groups.

*604

As Judge Scheindlin has previously noted,

Vuitton I,

340 F.Supp.2d at 443 , the qualifying questions used to filter for this universe employed the ambiguous term “purse,” which is synonymous with “handbag.”

See id.

Furthermore, an unknown proportion of respondents may have qualified only because they had bought a “handbag” or “purse or wallet” costing more than the required amount “in the past year or two,” but were not likely to do so in “the next year or so.” It is well-established that only potential future purchasers, not past purchasers, are relevant to a confusion study.

See Universal City Studios, Inc. v. Nintendo Co., Ltd.,

746 F.2d 112, 118 (2d Cir.1984) (“[T]he survey utilized an improper universe in that it was conducted among individuals who had already purchased or leased Donkey Kong machines rather than those who were contemplating a purchase or lease.”);

American Footwear Corp. v. General Footwear Co.,

609 F.2d 655, 660-661, n. 4 (2d Cir.1979) (holding that a survey was defective where survey participants, although former purchasers of the product at issue, did not necessarily have any present purchasing interest in the particular matter being surveyed);

Jordache Enterprises, Inc. v. Levi Strauss & Co.,

841 F.Supp. 506, 518-519 (S.D.N.Y.1993) (survey that “interviewed participants who had purchased or worn jeans within the past six months” but “did not inquire as to whether those participants intended to purchase jeans in the future ... does not necessarily include potential purchasers of jeans” and “does not constitute acceptable evidence of actual confusion”). Consequently, the Jacoby Confusion Survey failed in establishing the proper universe of respondents.

Second, the Jacoby Confusion Survey asked improper questions, and of the respondents whom the survey classified as confused, more than half were classified as confused based on their responses to these questions.

The survey’s second main question consisted of the following:

If you have any thoughts about it, do you think the company that put out this bag is not part of and has no business relationship with the company whose bags were shown in the ad, or do you think the company that put out this bag is part of, or does have some business relationship with the company whose bags were shown in the ad?

The phrase “some business relationship” is highly ambiguous.

See

Shari Seidman Diamond,

Reference Guide on Survey Research

in MANUAL ON SCIENTIFIC EVIDENCE 2d at 248 (Federal Judicial Center 2000) (“When unclear questions are included in a survey, they may threaten the validity of the survey by systematically distorting responses if respondents are misled in a particular direction, or by inflating random error if respondents guess because they do not understand the question. If the crucial question is sufficiently ambiguous or unclear, it may be the basis for rejecting the survey.”). Notably, if the respondent answered yes to this question, the follow-up question did not ask about the nature of this “business relationship,” but rather asked about the bag: “What, in particular, makes you think that bag number [ ] come from a company that is part of, or has some business relationship with, the company whose bags were shown in the ad?” Thus, the respondents’ understanding of the term “business relationship” cannot be evaluated.

The survey’s third main question consisted of the following:

If you have any thoughts on this, do you think that, in order to come out with this bag the company did not need to get

*605

permission or a license from the company whose bags were shown in the ad, or do you think the company that put out this bag did need to get permission or a license from the company whose bags were shown in the ad?

As Judge Scheindlin has noted, this kind of question has been criticized by courts because it “improperly ask[s] respondents for a legal conclusion.”

Vuitton I,

340 F.Supp.2d at 445 . Indeed, the question asked the respondents the very question that this litigation seeks to answer.

Finally, the Jacoby Confusion Survey classified several respondents as confused based on factors not relevant to the marks at issue. For example, one respondent was classified as confused based on her identification of the It-Bag as “[coming] from the same company whose bag was shown in the ad.” Yet when asked what made her say so, the respondent responded: “white background, it has capital letter initials.”

Two other respondents identified the It-Bag in response to the survey’s second main question. When asked what made them say so, one referred only to “the initial on the bag”

while the other responded: “The style is familiar because of the lettering.”

But Louis Vuitton has not argued that the mere interlocking initials “D” and “B” infringe on any Louis Vuitton mark. Rather, the mark at issue is the Dooney

Bourke Monogram Multicolor Mark. These respondents failed to refer to the multicolor aspect of this mark and are not properly classified as showing confusion.

See Revlon Consumer Products Corp. v. Jennifer Leather Broadway, Inc.,

858 F.Supp. 1268, 1275-76 (S.D.N.Y.1994) (inconsistent scoring and subjective coding rendered survey of no probative value).

We conclude that the cumulative effect of all the errors discussed above — errors of methodology, implementation, and reporting of results — renders the Jacoby Confusion Survey inadmissible under Rules 702 and 403.

2. The Jacoby Dilution Survey

a. Facts

i. The Jacoby Dilution Survey Universe

Dr. Jacoby defined the relevant universe for his dilution study exactly as he defined it for his confusion study, as “potential Louis Vuitton or Dooney & Bourke customers (or potential customers of both) who had bought a “handbag” or “purse or wallet”

within the price ranges specified above.” While the Jacoby Confusion Survey Report stated ambiguously that “[s]ome respondents qualified for both groups,”

the Jacoby Dilution Survey Report notes specifically that “[n]early seven in ten respondents (69%) qualified for both groups”

— that is, they qualified both as Louis Vuitton and as Dooney & Bourke customers. The Jacoby Dilution Survey sampled this universe by conducting a mall intercept survey in four malls distributed by U.S. Census region.

Respondents were interviewed from March 9 to March 30, 2004.

*606

ii. The Jacoby Dilution Survey Stimuli

As noted above, the Jacoby Dilution Survey had three basic stimuli: the It-Bags, the Murakami bags, and the control bag. More precisely, respondents were exposed to two of four different IL-Bags: the “Large Wristlet” with either a white or a black background and the “ID/Coin purse” with either a white or a black background. Similarly, respondents were exposed to two of four different Murakami bags: the “Pochette Accessoire” with either a white or a black background and the “Pochette Cles” with either a white or black background. As the names of these Dooney & Bourke and Louis Vuitton bags suggest, these bags are all relatively small in size. Finally, all respondents were exposed to a Dooney

Bourke “Small Zip Top” bag as the control.

As above with the Jacoby Confusion Survey, the Jacoby Dilution Survey had no separate control group. All respondents were shown the test bags and the control bag.

iii. The Jacoby Dilution Survey Questions

The Jacoby Dilution Survey used eight versions of the main questionnaire to rotate the order in which respondents were exposed to the bags and to rotate the order of the various questions asked of the respondents. Because the parties dispute whether the Jacoby Dilution Survey’s questions were proper, we review them in some detail. We take the first version of the main questionnaire as an example and, for the sake of clarity, refer to “stages” of the interview — even though Dr. Jacoby himself does not use this term. In each stage, the respondent was asked a series of questions that required the respondent to compare each of the basic stimuli to the other two.

The first stage of the interview proceeded as follows. After being seated in the testing room and told not to guess,

the respondent was first exposed to the Large Wristlet and the ID/Coin purse and asked to verify the identification numbers on the bags. Then the respondent was exposed to the Pochette Accessoire and Pochette Cles bags and asked to verify their identification numbers. From thenceforth, the interviewer referred to the bags by these numbers. The interviewer then touched the It-Bags and asked the following: “Does knowing that these bags are being sold in this pattern make it less likely you would want to buy [the Murakami bags], more likely that you would want to buy [the Murakami bags], or does this not affect whether you would want to buy [the Murakami bags]?” If the respondent answered that she would be less likely to want to buy the Murakami bags, the respondent was then asked: ‘What, in particular, is it about the appearance of [the It-Bags] that makes it less likely you would want to buy [the Murakami bags]?” This was followed by a probe in the form of the question: “Anything else?” If the respondent mentioned “look(s),” “design,” “colors,” “pattern,” or “style,” in her response to these follow-up questions, the interviewer then asked: “What, in particular, is it about the [design, color, pattern etc.]”? This was followed by the probe “Can you describe that in more detail?” and then by the probe “Anything else?”

The respondent was then asked essentially the same series of questions, but the interviewer began by touching the Mura-kami bags and asking about the Ib-Bags.

*607

Finally, the It-Bags were removed from view and the control bag was placed in front of the respondent next to the Mura-kami bags. After asking the respondent to verify the identification number on the control bag, the interviewer then asked the respondent essentially the same questions as above, by first touching the control bag and asking about the Murakami bags, and then by touching the Murakami bags and asking about the control bag.

In the second stage of the interview, with the control bag still present in front of the respondent, the interviewer handed the Murakami bags to the respondent and asked the following question, recorded here as it was in the questionnaire’s instructions to the interviewer:

For my next questions, I’d like you to suppose you actually owned one or both of the bags I am handing to you. PAUSE FOR THREE SECONDS, THEN CONTINUE: If you actually owned one or both of these bags, how would knowing that [the control bag] was being sold in this red-on-red pattern make you feel? RECORD VERBATIM. FOLLOW UP WITH: Why do you say that? PROBE ONCE WITH: Anything else?

The interviewer then asked a series of questions, the first of which was as follows: “Would the fact that [the control bag] was being sold in the red-on-red pattern make you feel that the bag you owned was less distinctive, was more distinctive, or would it not affect how you felt about the distinctiveness of the bag?” The respondent was not asked to explain her answer. Then the interviewer asked the same question, but referred to whether the availability in the marketplace of the control bag would make the respondent feel that the bags she was holding were “more valuable,” “less valuable,” or it would not affect how she “felt about the value of your bag.” This process continued with a third question — “less exclusive,” “more exclusive,” or no affect on the “exclusiveness of your bag” — and a fourth question — “more desirable,” “less desirable,” or no affect on the “desirability of your bag.”

This process was then repeated, but the interviewer removed the control bag from view and instead placed the It-Bags in front of the respondent. The respondent was again told to imagine that she “actually owned” the Murakami bags she was holding and was asked how knowledge that the It-Bags “were also being sold in the multi-color pattern on white or black” would make her feel about the Murakami bags.

Finally, in the third stage of the interview, the respondent was shown only'the It-Bags and asked the following, as recorded in the questionnaire:

Without handling them, if you know, which company puts out these bags? RECORD VERBATIM.

IF RESPONDENT GIVES INITIALS, SAY: What do those initials stand for? IF RESPONDENT SAYS SOMETHING LIKE: “I don’t know how to spell it,” SAY: Please spell it as best you can.

The respondent was then shown only the control bag and asked this line of questions and then shown the Murakami bags and asked this line of questions.

iv. The Jacoby Dilution Survey Dilution Analysis

In the Jacoby Dilution Survey Report, Dr. Jacoby defined dilution as follows: “Dilution was assessed as exerting an adverse impact on perceptions of the Louis Vuitton Multicolore bags, as exerting an adverse impact on the desire to buy the Louis Vuitton Multicolore bags, or as exerting a positive impact on the desire to

*608

buy the Dooney & Bourke ‘It-Bags.’ ”

With respect in particular to the questions asked of respondents in stage one of the interview, which were addressed to the respondent’s purchasing intentions, Dr. Ja-coby specified that respondents would be classified as indicating dilution only if they “explained these intentions by referring to one or more elements of the multi-color monogram pattern or design.”

100

Here, Dr. Jacoby found that a net of one percent of the respondents (which given the sample size, translates into one person) stated that they were less likely to want to buy the Murakami bags in light of the availability in the marketplace of the It-Bags. Meanwhile, Dr. Jacoby found that a net of five percent of the respondents stated that they were more likely to want to buy the It-Bags in light of the availability in the marketplace of the Murakami bags.

With respect to the questions asked in stage two of the interview, Dr. Jacoby found that, in response to the first open-ended “how would it make you feel?” question, a net of nineteen percent of the respondents said either (1) that the availability in the marketplace of the IL-Bags would cause them to have, in Dr. Jacoby’s words, “negative feelings” towards the Murakami bags, or (2) that the It-Bags were knock-offs of the Murakami bags, which Dr. Jacoby coded as indicating dilution. But as Dooney & Bourke points out, many of the verbatim responses that Dr. Jacoby coded as indicating dilution did no such thing. Remarkably, Dr. Jacoby coded the following verbatims as indicating dilution: “Even though they have the same color pattern and letter pattern it wouldn’t make a difference.”

101

“I’m not big on the multi-color pattern but I do like the wrist bag. I like the little [Dooney

Bourke] heart.”

102

“It would make me want to buy one of these [It-Bags]. They are more my style. I like the pattern better.”

103

“It really wouldn’t make a difference. I like all of them. The pattern or color do not make a big difference. I like them all and I like all the purses.”

104

“It wouldn’t matter because I like the mul-ticolors on both of them.”

105

“It wouldn’t matter to me one little bit. I do own a Louis Vuitton purse but I still don’t care if some other company want[s] to make their purses like LV. Why should I care?”

106

With respect to the questions going to the “distinctiveness,” “value,” “exclusivity,” and “desirability” of the Murakami bags, Dr. Jacoby reported that a net of fourteen percent of the respondents stated that the It-Bags made the Murakami bags “less distinctive,”

107

and three percent stated that the former made the latter “less valuable.”

108

However, Dr. Jacoby reported, but neglected to include in his principal findings, that a roughly equivalent net of two percent of the respondents stated that the It-Bags made the Murakami bags “more valuable.”

109

Dr. Jacoby also reported, but neglected to include in his principal findings, that a net of seven percent of the respondents stated that the It-

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Bags made the Murakami bags “more desirable.”

110

With respect to the third stage of the interview, Dr. Jacoby reports that “consumers of the sort tested in this investigation, in overwhelming proportion, are able to correctly identify the Louis Vuitton Multicolore bag as emanating from Louis Vuitton.”

111

Specifically, seventy-six percent of the respondents recognized the Louis Vuitton Multicolore Mark as referring to Louis Vuitton.

112

v. The Jacoby Dilution Survey Pilot Survey

Finally, we note that, before initiating the Jacoby Dilution Survey, Dr. Jacoby ran a pilot survey, the results of which showed “little to no net dilution.”

Vuitton I,

340 F.Supp.2d at 450 n. 196. Dr. Jacoby states that he discarded the results of the pilot survey on the ground that the respondents were fatigued by the length of the interview. Louis Vuitton has produced no other evidence to support this assertion. The Jacoby Dilution Survey used essentially the same questions as the pilot survey, but with slight modifications such as the insertion of the words as “also” or the “appearance of’ and the addition of “in this pattern” to the question asked in stage one.

Id.

b. Discussion

Dooney

Bourke criticizes the Jacoby Dilution Survey on a variety of grounds, the most significant of which are the following:

1. The Jacoby Dilution Survey used an improper universe.

2. The Jacoby Dilution Survey is not relevant to the issue of dilution.

3. The Jacoby Dilution Survey’s analysis of dilution was fundamentally flawed.

4. The Jacoby Dilution Survey was subject to methodological flaws that overstated the number of respondents who could fairly be categorized as subject to some diluting influence.

In reviewing the Jacoby Confusion Survey,

supra,

we found that the universe was improperly defined and that this error diminished the reliability and probative value of the survey. This discussion is equally applicable to the Jacoby Dilution Survey. We now consider the second, third, and fourth of Dooney & Bourke’s criticisms of the Jacoby Dilution Survey.

i. The Jacoby Dilution Survey is Not Relevant to the Issue of Dilution

As Judge Scheindlin repeatedly pointed out in

Vuitton I,

the central question informing a dilution analysis in this case is the following: “does Dooney

Bourke’s use of the multicolored monogram printed on the white and black backgrounds of its handbags lessen the capacity of Louis Vuitton’s Monogram Multicolore trademarks to identify and distinguish goods or services?”

Vuitton I,

340 F.Supp.2d at 448 (quotation omitted).