A company that sold counterfeit Top Tobacco LP cigarette rolling papers likely won’t escape a $1.1 million jury verdict, an Eleventh Circuit panel indicated during oral argument. A jury found Star Importers and Wholesalers Inc. sold counterfeit papers, though not willfully. Although Star proved it profited just $7,000 from accidental infringement, Top Tobacco elected statutory damages, which for non-willful infringement range from $1,000 to $200,000 per mark, and the jury awarded $123,000 for each of nine infringed trademarks.
The panel suggested that overruling the properly instructed jury’s verdict, which fits within statutory damages boundaries in trademark law, would undercut Top Tobacco’s right to a jury trial.
Circuit Chief Judge William H. Pryor said the jury was free to consider factors including the value of the brand and deterrence. He noted that statutory damages can be punitive, so no actual losses or profits are required, nor is willfulness.
“It seems to me hard to accept an argument that there has to be this relation to actual damages, because the entire point of statutory damages is as an alternative to actual damages,” Pryor said. “We’re trying to deter negligence in the distribution of counterfeit products that pose a risk to public safety and that harm the reputation of a brand that a seller has spent millions of dollars every year in marketing.”
Star was one of several entities sued by Top Tobacco in the U.S. District Court for the Northern District of Georgia over counterfeit papers in 2019. Another, Gabsons Novelties, filed a failed petition to the Supreme Court arguing its principal couldn’t be personally liable as he didn’t know of the ongoing infringement that had started before his tenure.
