Republic Dials Down Damages Push in Fake Papers Case
Republic Brands rescinded its push for $18 million in statutory damages each against Star and ZCell, two Georgia wholesalers accused of trading counterfeit versions of Republic tobacco rolling papers, reports Law360. Acknowledging that the initially sought penalty was “high,” Republic’s counsel told jurors to instead use their common sense when determining damages.
Under the U.S. Lanham Act, intentional trading of counterfeit products can be punished by up to $2 million per mark at issue. Inadvertent infringement elicits statutory damages of between $1,000 and $200,000 per mark.
U.S. District Judge Michael L. Brown ruled before trial that Star and ZCell had bought and sold counterfeit rolling papers.
In a May 2019 raid, authorities seized around 70,000 rolling paper booklets from Star’s Atlanta-area warehouse. If authentic, they would have been worth more than $110,000, according to Republic. From ZCell’s nearby warehouse, law enforcement confiscated around 180,000 booklets, worth more than $260,000 if authentic.
Republic attorney Maia T. Woodhouse said each of the defendants either knew they were dealing in counterfeit rolling papers or recklessly disregarded obvious red flags that revealed as much.
The defendants contended they were unaware that some of the papers they traded were knockoffs.
Star is one of the largest wholesalers of its kind in the American Southeast with around $100 million in annual sales. ZCell does around $16 million in annual sales.