This is a trademark infringement case involving the trademarked phrase “Freedom Pop”. Plaintiff Proccor Pharmaceuticals, Inc. (“Proccor”) contended that Defendant GAT Sports infringed upon its alleged trademark for a “Freedom Pop” flavored Pre-Rx pre-workout supplement. GAT Sports essentially argued that the phrase was used in a non-trademark, descriptive, way to describe the flavor of its product.
Defendants filed a motion to exclude the testimony of Neil Beaton, whose report states that the Plaintiff retained him to “calculate Defendants’ profits and, separately, Proccor’s damages measure by reasonable royalties.”
Accounting Expert Witness
Neil J. Beaton is a Certified Public Accountant who has performed a reasonable royalty analysis 60 to 70 times during his forty year career and who has testified five times as a trademark damages expert in cases specifically involving nutritional supplements. He has assisted 30 times in negotiating royalties in nonlitigation related licensing engagements.
Want to know more about the challenges Neil Beaton has faced? Get the full details with our Challenge Study report.
Discussion by the Court
The Defendants summarized several grounds for their motion:
- there was no prior trademark licensing agreement between the parties
- Plaintiff has never had a trademark licensing agreement with any party
- Beaton’s analysis was based on litigation or prelitigation agreements that are vastly different from trademark licensing agreements
- Beaton only addressed one of the applicable fifteen factors for determining what the royalty would have been had there been a hypothetical negotiation
- Beaton never actually reviewed any of the alleged agreements that he relied on for data points in his analysis — all information in his analysis was supplied verbally by Plaintiff’s CEO
- Beaton’s proposed per unit royalty rate ignores that it doubles the price of the product
- Beaton’s damages are over 35 times greater than any amounts Proccor ever earned from litigation and prelitigation settlements — combined
- Beaton did no comparability analysis between his hypothetical trademark license agreement and the litigation and prelitigation settlements he relied on, and/or
Absence of a licensing history might affect the persuasiveness of an opinion but not the admissibility of the opinion
The Court explained that many of the Defendants’ objections amount to iterations of the same assertion, which is that in the absence of a licensing history the damages caused by an infringement is not ascertainable with sufficient certainty to warrant admission into evidence of an expert opinion. The absence of a licensing history might complicate the task of formulating an opinion on damages by eliminating certain otherwise available methods of valuation, including the most popular method, the simplest method, or even the most reliable method.
But the absence of a licensing history no more prevents a reasoned and professional opinion on damages than the absence of immediately comparable sales prevents a qualified real estate appraiser from formulating an opinion on real estate value; the appraiser resorts to other useful and available means of appraisal, including more remotely comparable sales. The absence of a licensing history might affect the persuasiveness of an opinion but not the admissibility of the opinion.
The Court held that a review of Beaton’s report and his qualifications establish that he meets the threshold of possessing pertinent specialized knowledge based on training and extensive experience in a pertinent discipline and will assist a jury in determining a fact in dispute. The Defendants fail to demonstrate that Beaton’s method is based on insufficient facts or data (he appears to use the best, or perhaps the only, available in both instances); that his principles or his methods are demonstrably unreliable; or that his application of the announced facts, principles, and methods is demonstrably flawed.
Held
The Court denied the Defendants’ motion in limine to exclude the testimony of Plaintiff’s expert Neil Beaton.
Key Takeaways:
The standard for reviewing the admissibility of Rule 702 expert testimony is familiar, well understood, and explicit in the rule and the leading decisions. In each case, the rigor of the standard adapts to the subject matter of the opinion. An opinion about damages based on the loss of the probable price of something exchanged in the marketplace between a willing buyer under no compulsion to buy and a willing seller under no compulsion to sell is among the simplest and most common topics of expert testimony. Not every expert opinion demands the same level of scientific rigor, peer review, and the like.
Please refer to the blog previously published about this case:
Intellectual Property Expert Witness’ Testimony About Trademark Custom and Usage Admitted
Case Details:
| Case Caption: | Proccor Pharmaceuticals, Inc. V. World Health Products, Llc Et Al |
| Docket Number: | 8:22cv2227 |
| Court: | United States District Court, Florida Middle |
| Date: | September 30, 2024 |
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