Chums, Ltd., a Utah Corporation Plaintiff-appellant, v. Snugz/usa, Inc., Defendant-appelleeandhoward James Adamson, an Individual, Defendant-appellee, 64 F.3d 669 (10th Cir. 1995)

Plaintiff-appellant Chums, Ltd. (Chums) appeals from a jury verdict in favor of Defendants-appellees Snugz/USA, Inc. (Snugz) and Howard J. Adamson. Our jurisdiction arises pursuant to 28 U.S.C. 1291 and we affirm.

Background

Both Chums and Snugz are in the business of making eponymous eyeglass retainers, those stringy objects that dangle from the back of sunglasses or eyeglasses to keep them from straying from the head of their owner. Believing that Snugz' product too closely resembled its own eyeglass retainers, Chums filed suit in federal district court, charging Snugz and Adamson with having violated the Lanham Act, 15 U.S.C. 1125(a) (1982), and the Utah Unfair Practices Act, Utah Code Ann. 13-5-2.5 (1992). Following trial, the jury found that while Chums' trade dress was either inherently distinctive or had acquired a secondary meaning, there was no likelihood of confusion between Chums' and Snugz' eyeglass retainers. Pursuant to this verdict, the district court thereafter entered a judgment of "no cause of action." Chums now appeals on numerous grounds.

Discussion

Chums argues that the district court erred in excluding the testimony of two witnesses regarding conversations in which other unidentified third parties allegedly had misidentified Chums as Snugz or vice versa. In one instance, the court excluded the testimony on hearsay and Fed.R.Evid. 403 prejudice grounds, and in the other, only on hearsay grounds.

We review the evidentiary rulings of a trial court for abuse of discretion. Faulkner v. Super Valu Stores, Inc., 3 F.3d 1419, 1433 (10th Cir. 1993). Under this standard, a trial court's decision will not be disturbed absent our firm and definite conviction that the lower court "made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances." Moothart v. Bell, 21 F.3d 1499, 1504 (10th Cir. 1994) (quotation omitted).

Under this deferential standard, the district court did not abuse its discretion in excluding the testimony of either witness. Fed.R.Evid. 801(c) defines hearsay as "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." To our mind, it is clear that Chums wished to offer the excluded conversations precisely for the truth of what the third parties said. Moreover, recognizing that the trial judge is uniquely suited to the task of balancing probative worth against likely harm, C.A. Assocs. v. Dow Chemical Co., 918 F.2d 1485, 1489 (10th Cir. 1990), we find no reversible error in the district court's excluding nameless third-party testimony on the grounds that the evidence's "probative value [was] substantially outweighed by the danger of unfair prejudice...." Fed.R.Evid. 403.

Chums next alleges that the district court wrongfully, and off the record, dismissed its claim that Snugz had violated the Utah Unfair Practices Act, Utah Code Ann. 13-5-2.5 (1992), and thereby prevented the jury from considering this theory of liability.

This argument, however, misapprehends the record, for the district court did indeed instruct the jury regarding Chums' state unfair competition claims. See Aplt.App. at 244-45. Reviewing the jury instructions as a whole, we find that they clearly state "the applicable law and provide the jury with ample understanding of the issues and standards of the case." Shamrock Drilling Fluids, Inc. v. Miller, 32 F.3d 455, 459 (10th Cir. 1994) (internal quotations and citations omitted). Specifically, Instructions 30 and 31 speak to the very sort of unfair competition contentions raised by Chums at trial, and cover the heart of Chums' proffered unfair competition jury instructions. The jury decided based on the instructions given, and as there has been no substantive challenge to their findings, our analysis on this issue need go no further.

Chums also argues that the district court erred in refusing to give Chums' proposed Jury Instruction 8, concerning likelihood of confusion, and in giving Instruction 25. We "apply a de novo standard of review to determine the propriety of tendering an individual jury instruction." United States v. Harmon, 996 F.2d 256, 258 (10th Cir. 1993).

In its order regarding, among other things, the preparation of jury instructions, the district court noted the following: "All instructions should be short, concise, understandable, and neutral statements of law" (emphasis in original). Proposed Instruction 8 does not fit this description. It is long, convoluted, and confusing. Moreover, its subject matter, likelihood of confusion, is stated in far more succinct fashion by actual Instruction 26. We think the district court was entirely correct in substituting clarity for cloudiness.

As to Instruction 25, Chums contends that the district court misled the jury by failing to indicate that the adoption of a trade dress similar to one already established in the marketplace raised a presumption of illegality. Chums' reliance upon Beer Nuts, Inc. v. Clover Club Foods Co. (Beer Nuts II), 805 F.2d 920, 927 (10th Cir. 1986), to support its argument is misplaced, for this statement appears in the larger context of a discussion about intent as a factor in assessing likelihood of confusion. In Beer Nuts II, we noted that "deliberate adoption of a similar mark may lead to an inference of intent to pass off goods as those of another which in turn supports a finding of likelihood of confusion." Id. This reasoning does not establish a presumption of illegality whenever one good, similar to a pre-existing good, enters the market.

Next on the list of Chums' issues on appeal is its contention that the district court erred by denying its motion for a mistrial following a juror's referencing a dictionary for aid in defining the term "likelihood," and his subsequent introduction of the dictionary into the jury room. We review the denial of a motion for mistrial for abuse of discretion. United States v. Pinelli, 890 F.2d 1461, 1482-83 (10th Cir. 1989), cert. denied, 495 U.S. 960 (1990); United States v. Peveto, 881 F.2d 844, 859 (10th Cir.), cert. denied, 493 U.S. 943 (1989). We reverse for abuse of discretion only if we have "a definite and firm conviction that the lower court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances." United States v. Thompson, 908 F.2d 648, 650 (10th Cir. 1990) (quotation omitted). As with a review of a motion for new trial, this latitude is based on a recognition that the trial judge "was uniquely able to assess the likelihood that the extraneous information was prejudicial." Mayhue v. St. Francis Hosp. of Wichita, Inc., 969 F.2d 919, 922 (10th Cir. 1992).

No such error in judgment or overstepping of permissible choice occurred in this case. It is true that a "rebuttable presumption of prejudice arises whenever a jury is exposed to external information in contravention of a district court's instructions." Id. The district court, however, found that this presumption had been rebutted, noting that (1) only one juror had seen the dictionary; (2) the dictionary was confiscated by a marshal; (3) the jury was re-instructed not to use or refer to extraneous sources of information; (4) the dictionary definition at issue comported with common-sense meaning; and (5) Chums' counsel argued only that the jury should be re-instructed to rely on ordinary and common meaning. We agree that these facts and circumstances rebut any presumption of prejudice.

The district court denied Chums' motion for new trial. We generally review this decision under an abuse of discretion standard. See FDIC v. United Pac. Ins. Co., 20 F.3d 1070, 1079 (10th Cir. 1994). Essentially, on appeal Chums makes a sufficiency of the evidence argument: that the verdict was clearly against the weight of the evidence. We disagree. Ample evidence was adduced to support the jury findings, and it was not an abuse of discretion for the district court to deny Chums' motion.

AFFIRMED.