Curry v. Revolution Laboratoires, LLC et al
Filing
410
MEMORANDUM OPINION AND ORDER signed by the Honorable Matthew F. Kennelly on 8/25/2023: For the reasons stated in the accompanying Memorandum Opinion and Order, the Court (1) grants plaintiff Curry's motion to determine infringing profits and aw ards $547,095.44 in defendants' profits [dkt. no. 388]; (2) denies the defendants' motion to amend or alter the judgment [dkt. no. 384]; (3) grants plaintiff Curry's motion for a finding of IUDTPA liability [dkt. no. 378]; (4) gra nts in part plaintiff Curry's motion for pre- and post-judgment interest [dkt. no. 390]; and (5) grants in part plaintiff Curry's motion for a permanent injunction [dkt. no. 392]. The parties are directed to calculate prejudgment interest in accordance with this decision through September 1, 2023 and submit a joint status report with the calculation and amount by August 30, 2023. Finally, plaintiff is directed to provide a Word version of the proposed injunction, modified as indicated in this decision, to the undersigned judge's proposed order e-mail address by August 30, 2023. (mk)
Case: 1:17-cv-02283 Document #: 410 Filed: 08/25/23 Page 1 of 55 PageID #:13603
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CHARLES CURRY, d/b/a
Get Diesel Nutrition,
Plaintiff,
vs.
REVOLUTION LABORATORIES, LLC,
REV LABS MANAGEMENT, INC.,
JOSHUA NUSSBAUM, and BARRY
NUSSBAUM,
Defendants.
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Case No. 17 C 2283
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
Charles Curry sued Revolution Laboratories, LLC, Rev Labs Management, Inc.,
Joshua Nussbaum, and Barry Nussbaum, alleging that they infringed his trademark and
violated the Illinois Consumer Fraud and Deceptive Practices Act (ICFA), the Illinois
Uniform Deceptive Trade Practices Act (IUDTPA), and the Anti-Cybersquatting
Consumer Protection Act (ACPA). The parties stipulated that Revolution is liable for
infringing Curry's Diesel Test mark and violating ACPA with respect to one domain
name. The Court granted summary judgment in favor of the defendants on Curry's
ICFA claim. The remaining claims proceeded to a jury trial in May 2022, except for the
IUDTPA claim, which the parties agreed before trial would be decided by the Court.
The jury found that Joshua and Barry Nussbaum are individually liable for
trademark infringement. The jury also found that each defendant's infringement was
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willful. The jury awarded Curry actual damages and defendants' profits and assessed
punitive damages against each of the defendants.
Both sides have filed motions regarding the judgment. The defendants have
moved under Federal Rule of Civil Procedure 59(e) to alter the judgment by striking the
punitive damages and reducing the award of profits. Curry has moved under Rule
59(e) to amend the judgment to include pre- and post-judgment interest and for entry of
a permanent injunction. Curry has also moved to find the defendants liable on his
IUDTPA claim. Lastly, Curry has moved for a ruling that the jury's award of defendants'
profits should be considered as advisory and that the Court should determine the
amount of defendants' profits itself.
For the reasons below, the Court (1) denies the defendants' motion to alter the
judgment; (2) grants in part Curry's motions for pre- and post-judgment interest and
entry of a permanent injunction; (3) finds the defendants liable for violating IUDTPA; and
(4) grants Curry's motion to consider the jury's award of defendants' profits advisory and
awards $547,095.44 in defendants' profits.
Background
The Court assumes familiarity with this case's factual and procedural
background, which this Court has discussed in prior written opinions. See, e.g., Curry v.
Revolution Lab'ys, LLC, No. 17 C 2283, 2022 WL 225877 (N.D. Ill. Jan. 26, 2022). The
following background is relevant to the post-trial motions and largely is taken from the
Court's summary judgment decision and the trial record.
A.
The parties
Curry resides in Chicago and sells nutritional supplements through his business,
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Get Diesel Nutrition. He began selling Diesel Test branded products in 2005. He has
spent thousands of dollars advertising Diesel Test online and in weightlifting
publications, such as Planet Muscle Magazine. He filed a trademark application for the
mark Diesel Test in December 2016.
Revolution Laboratories is a limited liability company that sells nutritional
supplements and apparel. Joshua Nussbaum is the President of Revolution, and his
father, Barry Nussbaum, is the CEO. (For the sake of clarity, the Court will refer to each
of the Nussbaums by his first name.) Revolution sells its products directly and through
affiliate networks. In October 2016, Revolution began marketing and selling a product
called Diesel Test. The following month, Curry sent Revolution a cease-and-desist
request stating that he had common law rights to the Diesel Test mark.
B.
Trial testimony
Because the parties stipulated that Revolution was liable for infringement, the
trial focused on whether Joshua or Barry are individually liable, whether any defendants
had willfully infringed, and damages. 1 At trial, Curry, Joshua, and Barry testified, along
with Curry's damages expert and various Revolution employees.
Both Curry and Joshua testified regarding how they came up with the name
Diesel Test. Curry testified that "Diesel" came from his nickname "Chuck Diesel," which
he said came from his past work with diesel fuel. His first product was called Diesel
Fuel, and then he began using the name Get Diesel Nutrition for his business. He
testified that he chose the name Diesel Test for his testosterone boosting product
The trial also concerned Curry's ACPA claims, but because neither party has raised
any issues with the jury's verdict on that claim, the Court will not discuss that aspect of
the trial.
1
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because he wanted to continue using the name Diesel. As noted above, he began
selling Diesel Test in 2005. In 2015 and 2016, Diesel Test received Planet Muscle
magazine's Best of the Best award.
Regarding Revolution's use of Diesel Test, Joshua testified that it was his
decision to use the Diesel Test name and that he was involved in creating the product
label. He explained that "Diesel" was a common slang word in the body building
community. Barry testified that he did not like the name at first and repeatedly rejected
it but that he eventually acquiesced due to Joshua's enthusiasm for the name. Joshua
testified that he performed a search for the name on Google and on a website called
Trademarks 411, though he did not have any records of performing this search. Joshua
explained that because he did not see the Diesel Test mark on the trademark website
he searched, he thought "it was fair game." Tr. Vol. 2 at 474:5–11. As noted above,
Revolution began selling its Diesel Test product in October 2016. In closing argument,
Curry's counsel contended that Revolution and Curry's Diesel Test labels, including the
name, color, and font, were too similar for it to be plausible that Joshua independently
created it.
Joshua and Barry both testified that they control Revolution. Joshua testified that
he managed the company on a day-to-day basis and that he asked Barry for advice
regarding Diesel Test. He explained that when Revolution began selling Diesel Test,
the company took another product called Rev Test and relabeled it as Diesel Test. He
testified that from October 2016 to June 2017, Revolution sold its Diesel Test product to
767 customers in Illinois.
Curry sent three cease-and-desist requests to Revolution in November 2016. In
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these requests, he included links to his website where he was selling his Diesel Test
products. Joshua testified that he did not reply to these requests nor click the links
because he thought it was a scam. He forwarded Curry's cease-and-desist email to
Barry and a couple of other Revolution employees. In Joshua's email, he asked a
Revolution employee to "do a search and see if Diesel Test is available for trademark or
if this guy is telling the truth." Dkt. no. 399-3 at 65:2–7. In the same email, Joshua
wrote: "I personally vote we let him sue us to get through the remainder of our labels
and then change the name to DZL Test on our next run." Id. at 65:19–21.
Barry testified that he agreed with this decision. He testified that after receiving
Curry's cease-and-desist letter, a Revolution employee discovered that the trademark
was available for purchase. Another Revolution employee asked in the same email
chain if Revolution should purchase the mark, to which Barry responded:
"Yessssssssss." Dkt. no. 399-10 at 6. Joshua then prepared and filed an application to
register the Diesel Test trademark under his own name. That application was later
denied by the U.S. Patent and Trademark Office.
Joshua testified that after he received Curry's cease-and-desist request, he
searched again on Google and Trademarks 411 for the Diesel Test mark and did not
find anything. He also stated that he spoke with two of his distributors, and they told
him that they had not heard of Diesel Test or Curry's company. At trial, however,
Joshua was confronted with evidence that one of those distributors was advertised as
Curry's exclusive distributor of Diesel Test. Barry testified that he searched on Amazon
to investigate Curry's claim, but he conceded that he searched for products with the
name testosterone in it, not Diesel Test specifically. Barry also testified that he
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instructed Revolution employees to perform searches. He explained that because he
did not find evidence of sales or a registered trademark in his searches, he thought
Curry's claim was scam.
In February 2017, Amazon banned Revolution's Diesel Test product due to
Curry's complaint that it was counterfeit. Joshua and Barry testified that Revolution
decided not to contest the Amazon ban because their Diesel Test sales on Amazon
were not significant enough. Revolution sales manager Adam Knippel testified via
deposition that Revolution continued selling Diesel Test on other channels after Amazon
banned the product.
There was conflicting evidence at trial regarding when Revolution stopped selling
Diesel Test. Knippel testified that Revolution continued to sell Diesel Test after Curry
filed suit in March 2017. Revolution warehouse manager Donna Godwin, who also
testified via deposition, explained that as of August 2018, Revolution still had Diesel
Test product. Curry testified that in May 2020, he saw a website advertising
Revolution's Diesel Test. Joshua testified, however, that Revolution had stopped selling
or advertising Diesel Test in October 2017 because it began selling and advertising the
product under a new name, RT 2.0. But he also admitted that he had previously
submitted an affidavit in this case stating that Revolution did not stop selling Diesel Test
products until the first quarter of 2018. See dkt. no. 88-1 at ¶ 3. Barry testified that
there were a small number of deliveries in 2018 but that Revolution had stopped
marketing Diesel Test in 2017.
There was also testimony at trial regarding Revolution's products that it marketed
and sold with Diesel Test. Both Joshua and Knippel testified that Diesel Test and MRX
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were marketed together as complimentary products. Knippel testified that Revolution's
sales team marketed Diesel Test and MRX as a two-step system. Joshua similarly
testified that MRX and Rev Test had been advertised as a two-step system. He
explained that this was a sales strategy to sell another product after a consumer
purchased MRX, and he stated that each step was recorded as an independent sale.
Knippel testified that some customers complained that when they purchased Diesel
Test online, they were automatically charged for MRX and did not have the option to
remove it from their order. He also stated that Revolution sometimes sold Diesel Test in
a bundle called Champion Stack with other Revolution products.
Finally, Revolution's accounting manager, Trent Turner, and Curry's expert, Joel
Herman, testified regarding damages. Turner testified that Revolution used
QuickBooks, an accounting software, to produce a profit-and-loss (P&L) report for
Diesel Test. The P&L report covered the period from August 1, 2016 to October 20,
2017. It reflected that Revolution made $1,580,000 in sales after chargebacks and
refunds, although Turner testified that this figure did not include sales made on Amazon
or eBay. The report showed that after deducting expenses, Revolution experienced a
$45,723 loss on Diesel Test during the period covered by the report.
Herman, a certified public accountant, testified that Revolution made at least
$2,052,225 in net sales from Diesel Test and $2,131,669 in sales from related products.
He testified that ninety-six percent of customers who purchased MRX also purchased
Diesel Test at the same time or previously. Herman also testified about Revolution's
expenses. For Revolution's related products, he testified that he was not provided any
records of expenses. For Diesel Test, he stated that he did receive some documents,
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but he concluded that he did not receive enough information to verify the expenses
shown on Revolution's P&L report. He explained that to conclude that the expenses
were reported accurately, he would need supporting documentation for the expenses,
such as receipts, leases, invoices, etc., which he was not provided.
There was also evidence introduced at trial regarding the Nussbaum Family
Trust. Barry testified that he formed the trust in 2012, and Joshua testified that he is a
beneficiary of the trust. Both Barry and Herman testified that the assets held by the
trust are currently worth around $38 million. Barry testified that the funding for
Revolution came entirely from the trust. He also testified that the trust owns the
multimillion-dollar home in Maui where he resides and that the trust pays him consulting
fees. Herman testified that the trust made payments into Joshua and Barry's personal
accounts and also paid some of Barry's personal expenses. He did not render an
opinion, however, regarding whether the assets held by the trust belonged to Joshua
and/or Barry. Joshua testified that his net worth was $172,572 in March 2022 and likely
lessened since then. Barry testified that his net worth in March 2022 was $23,780 (this,
obviously, does not include the assets in the trust).
During closing argument, Curry asked the jury to award $4,183,894 in
defendants' profits and $4,183,894 in reputational and loss of goodwill damages. Curry
also asked for punitive damages in the amount of the requested trademark damages,
i.e., $8.36 million.
C.
Procedural history and jury instructions
Before trial, the defendants moved to strike Curry's jury demand, contending that
Curry was not entitled to a jury on any of his claims. The Court denied this motion,
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explaining that Curry's request for actual damages on his trademark claims and punitive
damages on his common law trademark claim entitled him to a jury trial. Given this
ruling, the Court declined to "directly address at this point [Curry]'s contention" that he
was entitled to a jury trial on his request for the disgorgement of defendants' profits.
Dkt. no. 389-1 at 7:16–25. The Court held that "[t]he jury will in this case be given the
question of determining the recoverability and the amount of defendants' profits, and if I
conclude that there's no right to a jury trial for that remedy, the jury will effectively be
acting as an advisory jury on the particular point of the amount of the profits." Id. at 8:1–
6.
Several aspects of the jury instructions are also relevant to the parties' motions.
1.
Common law trademark rights
Before trial, Curry filed a motion in limine seeking to preclude the defendants
from controverting their stipulation that Revolution is liable for infringement. In
response, the defendants contended that Curry "bears the burden of establishing where
its trademark rights exist." Dkt. no. 296 at 7. They argued that Curry is entitled to
trademark protection only in the geographic areas where he has established rights,
which they contended was a "question of fact" that depended in part on the volume of
Curry's sales. Id. at 4. The Court granted Curry's motion in limine, explaining that the
defendants' stipulation regarding Revolution's liability "necessarily includes" an
admission that Curry has "enforceable trademark rights" because "a trademark holder
who has an invalid or unenforceable mark can't establish liability." Dkt. no. 362 at 5.
During the trial, the morning after the instruction conference, the defendants
stated that they "think an instruction on what constitutes a common law trademark and
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geographic scope should have been provided." Dkt. no. 385-1 at 1095:3–5. The
defendants did not propose an instruction regarding either a common law trademark or
geographic scope at the instruction conference. The Court responded that "the
geographic scope thing I ruled on I think in a pretrial motion." Id. at 1095:6–7.
2.
Personal liability
The jury instruction regarding personal liability of the Nussbaums is also relevant
to the current motions. In moving for summary judgment, the defendants argued that to
be personally liable, the Nussbaums had to have acted beyond the scope of their duties
as officers of Revolution. The Court rejected this contention, holding that "Seventh
Circuit caselaw indicates that officers can be held liable regardless of whether they act
within the scope of their duties." Curry, 2022 WL 225877, at *4. At trial, the Court
instructed the jury that "[t]o succeed on his trademark infringement claims against the
particular individual defendant you are considering, Mr. Curry must prove by a
preponderance of the evidence that the defendant personally participated in or directed
Revolution's infringing activity." Dkt. no. 399-9 at 13:12–16.
During the jury's deliberations, the jury asked: "If a leader is participating in or
directing activities in the best interests of the company, on behalf of the company, when
is it not considered performed for personal reasons under the law? All actions are
performed by a person." Dkt. no. 374 at 1. The Court requested the parties' input on
how to respond. The defendants reasserted their argument at summary judgment that
to be personally liable, they must act outside the scope of their employment as officers.
The Court declined to give this answer to the jury, noting that the defendants' comment
did not help the jury understand their instruction, but rather took issue with the
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instruction itself. The Court instead provided the following answer to the jury, over the
defendants' objection: "As the instruction states, it focuses on whether Mr. Curry has
proven that the defendant himself participated in or directed the infringing activity. It
does not require Mr. Curry to prove that the defendant acted for personal reasons or
that the defendant did not act in the best interests of Revolution." Id. at 2.
3.
The Nussbaum Family Trust
During the instruction conference, Curry proposed the following instruction about
the Nussbaum Family Trust:
During the trial, you heard testimony and saw documents concerning the
Nussbaum Family Trust which I will refer to as simply the trust. You may
consider the trust to be an asset of Joshua Nussbaum because Joshua
Nussbaum is a beneficiary of the trust. You may consider the trust to be
an asset of Barry Nussbaum if you find any of the following to be true:
that the trust has provided benefits to Barry Nussbaum; that Barry
Nussbaum exercised authority over assets of the trust; that Barry
Nussbaum created the trust in an attempt to shield assets from existing or
future creditors; that profits from Revolution's infringement were paid to
the trust.
Tr. Vol. 4 at 1071:16–1072:1. The defendants opposed the instruction, arguing that it
would break the trust to allow the jury to consider the trust's assets as Joshua and
Barry's assets. They did not propose an alternative instruction regarding the
circumstances under which the jury could consider the trust. The Court declined to give
Curry's proposed instruction because it related to just one factor for the jury to consider
when awarding punitive damages. The Court noted, however, that the jury could decide
to consider the trust when considering the defendants' financial condition.
Curry then proposed a simpler instruction on the trust as part of the punitive
damages instruction. The Court adopted this proposal with minor modifications and
instructed the jury that "[w]hether and the extent to which you consider the Nussbaum
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Family Trust in assessing each defendants' financial condition are matters for you to
decide." Dkt. no. 399-9 at 22:12–14. The defendants objected, arguing that the
instruction would prejudice them by calling the jury's attention to the trust. In their
written objection, the defendants stated that the instruction was not necessary because
"[b]oth sides may make whatever arguments they want in closing in an effort to
persuade the jury how they should consider the Trust and for what purpose." Dkt. no.
373 at 2. (The Court notes that this is essentially what the instruction told the jury.)
The Court overruled the defendants' objection, noting that the defendants did not
challenge the correctness of the instruction, but rather the fact that the instruction draws
attention to the trust. The Court reasoned that a significant amount of evidence
admitted at trial related to the trust, and thus it was appropriate to tell the jury in a
neutral way that they must decide whether to consider the trust. The Court also noted
that the jury instructions in other spots likewise made specific references to particular
types of evidence.
4.
Defendants' profits
Finally, regarding defendants' profits, the Court instructed the jury that:
Mr. Curry is required only to prove the defendants' gross revenue, by a
preponderance of the evidence. The defendant is required to prove by a
preponderance of the evidence any expenses that it argues should be
deducted in determining its profits. Mr. Curry is entitled to recover the
defendants' total profits from its use of the trademark, unless the
defendant proves by a preponderance of the evidence that a portion of the
profit is due to other factors.
Dkt. no. 399-9 at 19:13–21. Neither party objected to this instruction. The Court further
instructed the jury that "[i]f Mr. Curry proves by a preponderance of the evidence that
the defendants profited from their infringement by the sale of other products that were
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marketed, sold, or shipped with their Diesel Test product, then he's entitled to recover
the defendants' profits from those sales." Id. at 20:4–10.
During the jury's deliberations, the jury asked the Court: "If we believe there are
other significant factors driving sales / profitability, can we conclude there are profits to
be awarded or does that mean we should not determine profits because we can't
conclude they are due to the benefit of the infringed trade name?" Dkt. no. 374 at 3.
The Court again sought the parties' input regarding the proper response. After
discussion, the Court formed a response to the jury that restated the burdens of proof
from the original instruction and clarified that "[i]f the defendants prove that a portion of
the profit is due to other factors, you should deduct that amount from the total profits in
making any monetary award." Id. at 4. The Court overruled both sides' objections to
the precise wording of this sentence; neither side objected to its substance.
Curry proposed to add to this response that "[t]here may be a windfall to the
trademark owner where it is impossible to isolate the profits which are attributable to the
use of the infringing mark." Dkt. no. 389-8 at 19:6–11. The Court overruled this
proposal, explaining that jurors are not typically told the policy reasons behind
instructions.
After deliberating, as stated above, the jury found Joshua and Barry individually
liable for trademark infringement and found that all three defendants' infringement was
willful. The jury awarded Curry $2,500 in actual damages, namely, loss of goodwill and
reputational damages, and $500,000 in defendants' profits. The jury also assessed
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$300,000 in punitive damages against each defendant. 2
Discussion
A.
Curry's motion for the Court to determine infringing profits
Curry moves under Rule 59(e) for the Court to treat the jury's determination of
defendants' profits as advisory under Rule 39(c) and determine the proper award of
profits itself. 3 In the alternative, Curry moves for an enhancement of the jury's award.
The defendants' Rule 59(e) motion to reduce the defendants' profits award is also
relevant to this issue. The Court begins its discussion with Curry's motion, noting where
it also considers the defendants' contentions raised in their Rule 59(e) motion.
1.
Right to determination by a jury
Curry contends that the Court should treat the jury's disgorged profits award as
advisory because disgorgement is an equitable remedy. As a preliminary matter, the
defendants argue that because Curry previously contended in his response to their
motion to strike his jury demand that he was entitled to a jury trial on this point, he
should be barred under the doctrine of judicial estoppel from now contradicting that
contention.
Judicial estoppel "prevents litigants from manipulating the judicial system by
As noted above, the jury also made findings and awarded damages on Curry's ACPA
claim, which is not at issue on the present motions.
3 The defendants argue in a footnote that Curry's brief should be stricken because it
exceeds the proper page limit. The Court notes that the text of the brief itself (Dkt. no.
399) was within the fifteen-page limit; only the signature line carried over to the next
page. For this reason, the defendants' argument is, quite honestly, rather ridiculous.
That aside, as both sides have at times engaged in this practice throughout this
litigation, the Court declines this request. See Stevo v. Frasor, 662 F.3d 880, 887 (7th
Cir. 2011) ("[I]t is clear that the decision whether to apply [local rules] strictly or to
overlook any transgression is one left to the district court's discretion.") (internal
quotation marks omitted).
2
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prevailing in different cases or phases of a case by adopting inconsistent positions."
Spaine v. Cmty. Contacts, Inc., 756 F.3d 542, 547 (7th Cir. 2014). To invoke judicial
estoppel, the invoking party typically must show: (1) the earlier and the later positions
are inconsistent; (2) the party prevailed in the earlier proceeding based on the court's
acceptance of the earlier position; and (3) allowing the party to assert an inconsistent
position would provide it with an unfair advantage if not estopped. See In re KnightCelotex, LLC, 695 F.3d 714, 721–22 (7th Cir. 2012).
Judicial estoppel does not apply in this case because the defendants have not
shown the second element. That element requires that "the party must have prevailed
on the basis of its earlier position so that judicial acceptance of an inconsistent position
in a later proceeding would create the perception that either the first or the second court
was misled." Jarrard v. CDI Telecommunications, Inc., 408 F.3d 905, 914 (7th Cir.
2005) (internal quotation marks omitted). Curry did not prevail on his previous
contention that he was entitled to a jury trial on disgorgement. Rather, the Court held
that Curry was entitled to a jury trial based on his other claims and expressly reserved
ruling on the disgorgement point until after trial. The Court specifically noted that
although the jury would be asked to determine the amount of defendants' profits, that
award could be treated as advisory depending on the Court's ultimate conclusion.
Moreover, by expressly reserving the issue, the Court was in no way misled by Curry's
prior position. Thus, judicial estoppel does not bar Curry's contention that the jury's
disgorgement award should be treated as advisory. See Kelly v. Herrell, No. 21-2442,
2022 WL 17851675, at *4 (7th Cir. Dec. 22, 2022) (affirming the denial of a motion for
judicial estoppel where the party "did not prevail" on its earlier position, "which is a
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necessary condition of judicial estoppel").
The Court therefore proceeds to consider whether the jury's disgorgement award
should be treated as advisory. As the Court noted when ruling on the defendants'
motion to strike Curry's jury demand, it has held in two other cases that "a request for
disgorgement of profits in a Lanham Act case involves equitable relief on which plaintiff
is not entitled to a jury trial." Chicago Mercantile Exch. Inc. v. Ice Clear US, Inc., No. 18
C 1376, 2020 WL 5370625, at *1 (N.D. Ill. Aug. 10, 2020); see also Ariel Invs., LLC v.
Ariel Cap. Advisors LLC, No. 15 C 3717, 2017 WL 1049464, at *2 (N.D. Ill. Mar. 20,
2017) ("[T]he request for disgorgement of profits in a Lanham Act case is a claim for
equitable relief that did not entitle Ariel Capital to a jury trial."). The Court adheres to its
decisions in those cases.
Both the Supreme Court and the Seventh Circuit have characterized
disgorgement as an equitable remedy. See Chauffeurs, Teamsters & Helpers, Loc. No.
391 v. Terry, 494 U.S. 558, 570 (1990) ("[W]e have characterized damages as equitable
where they are restitutionary, such as in actions for disgorgement of improper profits.")
(alteration accepted) (citation and internal quotation marks omitted); Fuller Prod. Co. v.
Fuller Brush Co., 299 F.2d 772, 777 (7th Cir. 1962) ("An accounting for profits, however,
is an equitable remedy subject to the principles of equity."); BASF Corp. v. Old World
Trading Co., 41 F.3d 1081, 1095 (7th Cir. 1994) (labeling disgorgement of defendants'
profits as an equitable remedy). The three circuits that have squarely addressed this
issue have concluded that "[a] claim for disgorgement of profits under § 1117(a) is
equitable, not legal" and therefore does not create a jury right. Fifty-Six Hope Rd.
Music, Ltd. v. A.V.E.L.A., Inc., 778 F.3d 1059, 1075 (9th Cir. 2015); see also Hard
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Candy, LLC v. Anastasia Beverly Hills, Inc., 921 F.3d 1343, 1358 (11th Cir. 2019) ("[A]
claim for an accounting and disgorgement of profits under the Lanham Act is equitable
in nature and, therefore, [ ] the Seventh Amendment's guarantee of a jury trial does not
apply."); Ferrari S.P.A. v. Roberts, 944 F.2d 1235, 1248 (6th Cir. 1991) (holding that the
defendant was not entitled to a jury trial where the plaintiff's complaint "requested only
equitable relief; an injunction and disgorgement of profits").
In Curry's response to the defendants' earlier motion to strike his jury demand, he
contended that he was entitled to a jury trial on this remedy because he was seeking
infringing profits as a proxy for his damages. The Eleventh Circuit rejected this
argument in Hard Candy, noting that to adopt this proposition "would make the Seventh
Amendment right fully depend on the rationale the plaintiff offered for seeking to recover
the defendant's profits," which "is inconsistent with the longstanding interpretation of the
Seventh Amendment set out by the Supreme Court." Hard Candy, 921 F.3d at 1352,
1360. Curry also argued that this request for relief was intertwined with his other claims
and required credibility determinations, but he did not cite any authority for the
proposition that this would entitle him to a jury trial on this claim. And, in any event, the
defendants do not assert any of these arguments in contesting Curry's current motion.
In sum, the Court concludes that there is no right to a jury trial for Curry's
requested remedy of defendants' profits. The jury's award of $500,000 in defendants'
profits is therefore advisory under Rule 39(c)(1).
2.
Calculation of defendants' profits
Because the jury's award is advisory, the Court must determine the appropriate
amount of defendants' profits to award under section 1117(a) of the Lanham Act. See
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Fed. R. Civ. P. 52(a)(1) ("In an action tried on the facts . . . with an advisory jury, the
court must find the facts specially and state its conclusions of law separately."). 4
To recover the defendants' profits under the Lanham Act, Curry's only burden is
to prove the defendants' sales. See 15 U.S.C. § 1117(a). The burden then shifts to the
defendants to "prove all elements of cost or deduction claimed." Id. "If the court shall
find that the amount of the recovery based on profits is either inadequate or excessive
the court may in its discretion enter judgment for such sum as the court shall find to be
just, according to the circumstances of the case." Id.
First, the defendants contend in their Rule 59(e) motion that under Sands, Taylor
& Wood Co. v. Quaker Oats Co., 978 F.2d 947, 963 (7th Cir. 1992), the Court should
award profits by using a reasonable royalty. But the Seventh Circuit's holding in Sands
that the district court must use a reasonable royalty as a "starting point" for damages
was unique to the facts of that case. Id. at 963 n.19. In Sands, the defendant ran an
infringing advertising campaign without intending to trade on the plaintiff's goodwill or
reputation, and the plaintiff had previously licensed its mark to a third party. Id. at 950,
961–963. Given these circumstances, the Seventh Circuit held that "[a] reasonable
royalty, perhaps related in some way to the fee [the plaintiff] was paid by [the previous
licensee], would more accurately reflect both the extent of [the defendant]'s unjust
enrichment and the interest of [the plaintiff] that ha[d] been infringed." Id. at 963.
These circumstances are absent from this case. First, there is no evidence that
Curry has previously licensed his trademark. The Seventh Circuit subsequently
Because the Court grants Curry's motion to treat the jury's award as advisory and
determines the proper amount of profits itself, it need not address Curry's contention
that the jury was given an incomplete instruction on apportionment.
4
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emphasized in Sands that a reasonable royalty "could be said to reflect the actual loss
of" the plaintiff, "if ascertained with reasonable certainty." Sands, Taylor & Wood v.
Quaker Oats Co., 34 F.3d 1340, 1350 (7th Cir. 1994), on reh'g in part, 44 F.3d 579 (7th
Cir. 1995). Although the defendants suggested factors that the Court could consider
when determining a reasonable royalty, they conceded that there is no evidence in the
record of the trial regarding most of those factors. The lack of evidence is unsurprising
given that the defendants failed to raise this theory until their post-trial motion.
Moreover, the defendants do not support their own proposed royalty rate of 1% to 3% of
Revolution's gross sales of Diesel Test with any evidence, such as comparable
licenses. The defendants note that Curry offered minimal evidence of sales, but they do
not attempt to explain how that equates to a royalty rate of 1% to 3%. The Court
concludes that the defendants' proposed rate is pure speculation and finds that a royalty
rate in this case could not be ascertained with any reasonable certainty.
Second, this case does not involve an infringing advertising campaign, but rather
an infringing product name. The Seventh Circuit explained that the district court's
finding that "ten percent of [the defendant]'s profits from the sale of Gatorade could be
attributed to the advertising campaign that infringed upon [the plaintiff]'s mark" was
"methodologically flawed." Sands, 34 F.3d at 1350. Because the defendants in this
case sold infringing Diesel Test products and never contended at trial that any portion of
those sales were attributable to factors other than their infringement, an award of the
defendants' profits from those infringing sales is methodologically sound. Indeed, the
Seventh Circuit has held in subsequent cases that plaintiffs are entitled to the full
amount of defendants' profits from infringing sales established at trial and that courts
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need not make "sua sponte reductions" simply because profits awards are "subject to
the principles of equity." 4SEMO.com Inc. v. S. Illinois Storm Shelters, Inc., 939 F.3d
905, 912 (7th Cir. 2019).
The defendants' contention that any award higher than "$15,000 to $45,000"
would be an inequitable windfall under Sands lacks merit. Defs.' Rule 59(e) Mot.,
Opening Mem. at 5. The Seventh Circuit in Sands expressly stated its "discomfort with
that award was grounded in a concern not so much with the amount of the award but
with the approach of the district court." Sands, 34 F.3d at 1350. Indeed, the Seventh
Circuit "expressed concern that the mere award of a royalty would not be an adequate
measure of damages." Id. at 1352. Although the defendants contend that Curry did not
prove a substantial amount of sales of his products, a plaintiff is not required to prove
his sales to be entitled to a defendant's profits. See Roulo v. Russ Berrie & Co., 886
F.2d 931, 941 (7th Cir. 1989) ("[A]n award of profits was appropriate under either a
deterrence or unjust enrichment theory even if plaintiff's actual sustained losses may
have been less."); Web Printing Controls Co. v. Oxy-Dry Corp., 906 F.2d 1202, 1205
(7th Cir. 1990) (noting that an award of defendants' profits "flow[s] not from the plaintiff's
proof of its injury or damage, but from its proof of the defendant's unjust enrichment or
the need for deterrence"). The defendants have not cited any authority to the contrary.
The defendants rely heavily on comparisons between the evidence of bad faith in
this case and that in Sands. But as explained further below in discussing punitive
damages, there was stronger evidence of bad faith in this case than in Sands. Unlike in
Sands, the defendants here did not rely on advice of legal counsel. See Sands, 978
F.2d at 962. And in Sands, there was "no question that [the defendant] developed the
20
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'Thirst Aid' campaign entirely independently, with no knowledge of [the plaintiff]'s
marks." Id. at 963. Here, the parties disputed at trial whether the defendants' knowingly
copied Curry's mark. And, in any event, Sands is inapplicable to this case for the
reasons explained above.
In short, the Court declines to use a reasonable royalty to award defendants'
profits. The Court therefore turns to calculating the appropriate amount of defendants'
profits using the burden-shifting test outlined in section 1117(a).
As a general matter, "[r]emedies are intended to make violations of the Act
unprofitable, but not to act as a penalty." BASF Corp., 41 F.3d at 1092. Disgorgement
is appropriate where "damages are otherwise nominal," however, disgorgement in some
cases "may overcompensate for a plaintiff's actual injury and create a windfall
judgment." Id. at 1096 (quoting George Basch Co. v. Blue Coral, Inc., 968 F.2d 1532,
1540 (2d Cir. 1992)); see also Gen. Elec. Co. v. Speicher, 877 F.2d 531, 535 (7th Cir.
1989) ("[A]n automatic award of profits in a trademark infringement case could confer a
windfall on the plaintiff."). "Therefore, the monetary relief granted by the district court
must be great enough to further the statute's goal of discouraging trademark
infringement but must not be so large as to constitute a penalty." Otis Clapp & Son, Inc.
v. Filmore Vitamin Co., 754 F.2d 738, 744 (7th Cir. 1985).
In Curry's motion, he seeks $4.18 million in defendants' profits—$2.05 million
from sales of Diesel Test and $2.13 million from sales of Revolution's other products
that he contends were marketed, sold, or shipped with Diesel Test. The defendants
contend that they experienced a loss on sales of Diesel Test and that the profits from
Revolution's other products were not due to their infringement of the Diesel Test mark.
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The Court begins with the parties' contentions regarding Revolution's infringing
Diesel Test sales. Curry's damages expert, Herman, testified that Revolution's net
proceeds from sales of Diesel Test were $2,052,225. He explained that he arrived at
that amount by totaling Revolution's sales from various sources, including Amazon,
eBay, and Limelight. Where the sales data indicated that certain sales were voided,
refunded, or discounted, Herman subtracted those amounts from his gross sales figure
to arrive at $2,052,225 in net sales. The Court finds that this evidence was sufficient to
establish that the defendants made $2,052,225 in net revenues from sales of Diesel
Test. Although Revolution's accountant, Turner, presented his own amount of net sales
revenues, the defendants did not contest the accuracy of Herman's calculation of the
amount of Diesel Test sales revenue either at trial or in response to Curry's motion.
Curry contends that he is entitled to the full $2.05 million because the defendants
failed to prove any expenses related to their sales of Diesel Test products. The Court
disagrees. Curry primarily relies on Herman's testimony that the P&L summary is
insufficient to prove that "the expenses entered were actually incurred or were recorded
accurately." Pl.'s Mem. in Supp. of Pl.'s Mot. for Ct. to Determine Profits at 5. But
Turner testified regarding Revolution's process for recording expenses in QuickBooks,
which generated the P&L report. Turner explained that every financial transaction is
tracked in QuickBooks and that QuickBooks is integrated with Revolution's bank
accounts. At the end of each month, Turner testified, Revolution reconciled its bank
records with QuickBooks to ensure that the transactions matched. Turner stated that
the accounting manager would then double-check the reconciliation. The Court finds
this testimony credible, and it supports that the expenses reported on the P&L were
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actually incurred and were accurately recorded. Indeed, although Herman testified that
he did not have sufficient information to verify Revolution's expenses, he also stated
that QuickBooks "is a good product" and that he did not believe anyone manipulated or
changed the information inputted into QuickBooks. Tr. Vol. 4 at 940:24–941:18.
Furthermore, most of the expenses reported on the P&L summary are supported
elsewhere in the record. For example, regarding Revolution's marketing expenses,
Barry testified that he was familiar with Revolution's use of affiliated marketing to sell
Diesel Test and that it cost approximately $45 to $50 per customer. Herman also
agreed based on "listening to testimony" during trial that Revolution incurred marketing
expenses. Tr. Vol. 4 at 937:25.
For various overhead expenses—chargeback services, computer expenses,
payroll expenses, and rent or lease expenses—Turner testified that these expenses
were allocated to Diesel Test based on percentage sales. In other words, because
Diesel Test comprised 23% of Revolution's total sales, 23% of Revolution's overhead
expenses were allocated to Diesel Test's P&L. Herman testified at trial that he "would
suspect" that Revolution did incur overhead expenses, such as payroll, in selling Diesel
Test. Tr. Vol. 4 at 938:9–939:1. The Court finds that the defendants presented a
reasonable formula for the allocation of overhead. See In Design v. K-Mart Apparel
Corp., 13 F.3d 559, 566 (2d Cir. 1994) (holding that a deduction for overhead expense
was proper where the defendant "met its burden of offering a reasonable formula,"
noting that "absolute certainty . . . is not required").
Curry contends that Turner's testimony that he worked for companies other than
Revolution shows that the payroll expenses relate to products other than Diesel Test.
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This contention does not alter the Court's conclusion. First, as a factual matter, Turner
credibly testified that during the period of the P&L report, he did not work for any
companies not owned by Revolution. And, in any event, overhead will necessarily
include expenses that do not relate specifically to the infringing product, which is why
the expenses must be allocated to the infringing sales using a reasonable formula.
Curry does not argue that overhead expenses are not properly deductible or that the
defendants' allocation formula is unreasonable. Thus, the Court finds that the
defendants have satisfied their burden of proof for those expenses.
Regarding Revolution's shipping expenses, Turner testified that Revolution
incurred expenses for purchasing boxes to package its Diesel Test products and paid a
vendor to ship Diesel Test. Joshua also testified regarding Diesel Test shipments that
were sent to supplement distributors. Goodwin, Revolution's warehouse manager,
testified about Revolution's fulfillment process, including shipping orders to customers.
Even Herman testified that he "would think that there's a shipping cost to somebody
when a product is shipped out." Tr. Vol. 4 at 938:3–4. The Court finds that the
defendants have established that Revolution incurred shipping expenses and also finds
that the amounts presented in the P&L summary for "Shipping & Delivery" and
"Packaging Expense" are sufficiently accurate for the reasons explained above.
Similarly, for "Merchant Processing Fees," Turner testified that these fees were
the charges imposed by credit card companies. Curry did not present any contrary
evidence to contest this expense. He also has not challenged this amount beyond the
general contention that the P&L summary is unsupported, a contention the Court has
already rejected. The Court finds that the defendants have proven this expense as well.
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The remaining expenses presented on the P&L are "Cost of Goods Sold" and
"Product for Old Co." Dkt. no. 285-1. The Court finds that the defendants have not
sufficiently proven these expenses. Turner's testimony about both categories was
minimal. For cost of goods sold, Turner simply stated that it "would include what we
paid for the Diesel Test product," without any further elaboration. Tr. Vol. 4 at 1002:22–
23. Although in the typical case there would logically be some costs associated with
manufacturing a physical product, Curry presented evidence at trial that Revolution had
the unusual practice of "making" Diesel Test by relabeling its prior Rev Test product.
Goodwin testified that at least some of Revolution's Diesel Test sales were actually
fulfilled using returns of a prior product, Rev Test, that Revolution relabeled as Diesel
Test. She explained that in August 2016, she had made five hundred bottles of Diesel
Test this way. Joshua similarly testified that when Revolution began selling Diesel Test,
it relabeled existing Rev Test products as Diesel Test. Thus, it is not clear from the
record what amount Revolution paid, if anything, to manufacture its Diesel Test product
specifically. The Court therefore declines to deduct the purported "Cost of Goods Sold"
amount.
For the last expense category, "Products for Old Co," no explanation of this
amount appears in the record. Turner unhelpfully described this expense as "product
that was designated as given to old co." Tr. Vol. 4 at 1003:6–7. Without any further
information, the Court cannot evaluate whether this expense is properly deductible as a
cost of selling Diesel Test. Thus, the Court also declines to deduct "Products for Old
Co."
In sum, the Court finds that Revolution had net sales of $2,052,225 and the
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following deductible expenses: packaging of $25,152.67; chargeback services of
$55,763.97; computer, software, and internet of $5,472.99; payroll of $288,576.43, rent
or lease of $28,047.05; marketing of $789,290; merchant processing fees of
$244,805.07; and shipping & delivery of $68,021.38. This results in an award of
defendants' profits in the amount $547,095.44.
This leaves Curry's request for $2.13 million in sales of Revolution's other
products that he contends were marketed, sold, or shipped with Diesel Test. The Court
denies this request on multiple grounds.
First, as the Court instructed at trial, Curry is entitled to recover the defendants'
profits from sales of "other products that were marketed, sold, or shipped with their
Diesel Test product" only "if Mr. Curry proves by a preponderance of the evidence that
the defendants profited from their infringement by the sale of [those] other products."
Dkt. no. 399-9 at 20:4–10 (emphasis added); see Bucklew v. Hawkins, Ash, Baptie &
Co., LLP., 329 F.3d 923, 933 (7th Cir. 2003) (observing that because "the purpose of
allowing suit for the infringer's lost profits is to make infringement worthless to the
infringer," a proper award "will sometimes require tracing those profits into another
product, as where it is bundled with the infringing product"); Otis Clapp, 754 F.2d at 745
("[T]he plaintiff may not recover if he fails to prove that the defendant's actions caused
the claimed harm.").
Although Curry emphasizes in his motion that he presented evidence that
Revolution marketed, sold, or shipped other products with Diesel Test, he has not
established that the defendants profited from those sales due to the defendants'
infringement of Diesel Test. Rather, Joshua testified that Revolution's other products
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were often marketed and sold independently and were established products in the
market before Revolution began selling Diesel Test.
Curry did present evidence at trial that Diesel Test products sometimes helped
with the sale of Revolution's other products because the products were
"complementary," dkt. no. 389-2 at 99:22–100:5. The Seventh Circuit addressed a
similar theory of damages in Bucklew. In that case, the plaintiff sought the defendant's
profits from a noninfringing product on the theory that the defendants' sales of its
infringing product attracted customers to purchase a noninfringing product through the
prospect of "one-stop shopping." Bucklew, 329 F.3d at 933. The Seventh Circuit held
that the plaintiff's evidence supporting this theory "was too speculative to sustain an
award of damages." Id. Although one of the defendant's "employees testified that the
infringing forms would indeed help with the sale of" the noninfringing product, "no
evidence was presented that would have enabled the market value of this 'help' to be
gauged." Id. The plaintiff's expert witness testified "that 10 percent of the profits on [the
defendant]'s sales of [the noninfringing product] were due to the buyers' being able to
buy the infringing forms from" the defendant, but the Seventh Circuit rejected this
damages calculation because it "had no factual basis whatsoever." Id.
Similarly, in this case, Curry did not present evidence at trial that quantifies the
value of complementary products. Although the evidence at trial established that at
least some sales of Revolution's other products were bundled with Diesel Test, such as
the MRX products that were automatically added to online orders of Diesel Test and
some iterations of the Champion Stack bundle, Curry made no attempt to quantify the
amount of those specific sales. Instead, Curry seeks the full amount of all Revolution's
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sales of MRX and RevTest from August 1, 2016 through October 20, 2017. But his
entitlement to all those sales is not supported by the record. And because these are not
infringing sales, the usual assumption that "that the wrongdoer who makes profits from
the sales of goods bearing a mark belonging to another was enabled to do so because
he was drawing upon the good will generated by that mark" does not apply. WMS
Gaming Inc. v. WPC Prods. Ltd., 542 F.3d 601, 608 (7th Cir. 2008) (quoting Mishawaka
Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203, 206–07 (1942)), as
amended (Sept. 16, 2008).
Second, the Court concludes that an award of $2.13 million in sales of
Revolution's other products would not be equitable, which is an independent reason to
deny the relief Curry seeks. See 15 U.S.C. § 1117(a) ("If the court shall find that the
amount of the recovery based on profits is either inadequate or excessive the court may
in its discretion enter judgment for such sum as the court shall find to be just, according
to the circumstances of the case."). Curry's requested profits award for these products
is not required "merely because there has been an infringement." Champion Spark
Plug Co. v. Sanders, 331 U.S. 125, 131 (1947). Indeed, the Seventh Circuit has held
that disgorgement of profits is not required where, as in this case, it "might have
required the district court to engage in undue speculation as to the amount." BASF
Corp., 41 F.3d at 1096. The Court finds that its award of $547,095.44 in defendants'
profits is "sufficient to render [the defendants'] violations unprofitable," id., and that
considerations of "unjust enrichment or the need for deterrence" do not support
additional disgorgement of Revolution's other sales, Web Printing, 906 F.2d at 1205.
Indeed, further disgorgement likely would constitute an impermissible penalty. See
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BASF Corp., 41 F.3d at 1092; Otis Clapp, 754 F.2d at 744 ("[Section] 1117 forbids the
district court from allowing recoveries that are so excessive as to amount to a penalty.").
Curry also contends that the Court should use its equitable authority to enhance
the profits award. 5 First, he argues that an enhancement is necessary to ensure that
the defendants "do not profit from their infringement." Pl.'s Mem. in Supp. of Pl.'s Mot.
for Ct. to Determine Profits at 11. Because the Court has concluded that its award is
sufficient to ensure that the defendants' infringement is not profitable, it overrules
Curry's contention that the Court should enhance the award on that ground.
Second, Curry argues that the award should be enhanced because the
defendants concealed their business records. The defendants contest this
characterization of their discovery responses. The Court has already addressed this
issue several times, including when granting Curry's motion in limine to exclude
unproduced QuickBooks documents. The Court need not address this issue again
because any discovery failures would not justify enhancing the profits award to $4.18
million as Curry seeks. Curry does not tie any proposed missing records to his request
for $4.18 million. Although he contends that supporting records of expenses were not
produced, the Court has concluded that the evidence at trial was sufficient to support
the defendants' expenses that it deducted. Where the evidence was insufficient, the
Court did resolve doubts in Curry's favor as he requests by declining to deduct those
asserted expenses. Curry also argues that sales records past October 2017 are
In Curry's motion, he asked the Court to enhance the jury's profits award as an
alternative to his motion that the Court treat the jury's award as advisory. Although the
Court grants Curry's motion to treat the jury's award as advisory, the Court nonetheless
addresses his arguments for an enhancement of the award given that the amount the
Court has awarded is similar to the jury's award.
5
29
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missing. But given the undisputed evidence at trial that any sales past that date were
minimal, enhancing the profits award to $4.18 million based on this asserted lack of
evidence would improperly penalize the defendants. The Court also notes that when it
offered to order a protocol for inspection of the QuickBooks material, Curry expressly
advised the Court that he sought "no further relief from the Court on this matter." Dkt.
no. 344 at 1.
In short, the Court concludes that an enhancement of the defendants' profits
award is not warranted.
To summarize, the Court grants Curry's motion to treat the jury's award as
advisory and awards Curry $547,095.44 in defendants' profits. The Court overrules the
defendants' contention that an award of this size constitutes an impermissible windfall to
Curry.
B.
The defendants' motion to alter the judgment
The defendants have moved under Rule 59(e) to alter or amend the judgment by
reducing the profits award and striking the punitive damages award. "Rule 59(e) allows
a court to alter or amend a judgment only if the petitioner can demonstrate a manifest
error of law or present newly discovered evidence." Obriecht v. Raemisch, 517 F.3d
489, 494 (7th Cir. 2008). The defendants premise their motion on five arguments: 1)
the jury's profits award provides an inequitable windfall to Curry; 2) the jury's punitive
damages award was in error because the jury was not properly instructed on common
law trademark rights; 3) the punitive damages award was excessive; 4) the Court erred
in instructing the jury on the Nussbaum Family Trust; and 5) the jury was improperly
instructed on personal liability. The Court has already addressed the defendants' first
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contention in the previous section of this decision. The Court addresses the remaining
contentions in turn.
1.
Common law trademark rights instruction
The defendants contend that because the jury was not properly instructed
regarding how common law trademark rights arise, the jury could not evaluate
willfulness. But the defendants never made this argument at trial. When the Court
addressed this issue in deciding Curry's motion in limine, the defendants contended that
Curry must prove that he has enforceable common law trademark rights in certain
geographic areas. The Court overruled this contention because they had already
stipulated that Curry had enforceable common law trademark rights that were not
limited to any particular geographic area. See Dkt. no. 362 at 4–5. At trial, the
defendants sought an instruction on common law trademark rights and geographic
scope, but they never suggested that these instructions were necessary for the jury to
determine willfulness. They also did not object to the willfulness instructions at trial.
Thus, the defendants' contention is forfeited. See Schobert v. Illinois Dep't of Transp.,
304 F.3d 725, 730 (7th Cir. 2002) ("[T]o preserve the objection, the party must state the
same grounds when objecting to the jury instruction as it does in its motion for a new
trial or on appeal."); Petkus v. Richland County, 767 F.3d 647, 654 (7th Cir.2014)
("Although it submitted its own instructions, which the judge declined to give, it failed to
object to the instructions that the judge did give. That was another forfeiture.").
Even if the issue were not forfeited, the Court is not persuaded that the absence
of an instruction on common law trademark rights was a "manifest error of law."
Obriecht, 517 F.3d at 494. The defendants have not cited any authority for the
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proposition that the jury had to be informed regarding how Curry's common law
trademark rights developed to properly determine whether the defendants willfully
infringed his mark. Moreover, as previously discussed, the defendants' stipulation
admitted in substance that Curry had enforceable common law trademark rights
nationwide. Thus, instructing the jury regarding "how common law trademark rights
arise" or that those rights "are limited to the geographic areas in which a plaintiff
establishes such rights through sales" as the defendants propose, Defs.' Rule 59(e)
Mot., Opening Mem. at 7, would have been unnecessary and confusing to the jury.
The defendants also contend that the Court erred by not permitted the jury "to
consider the effect of the dismissal of the case," id., that is, the earlier dismissal for lack
of personal jurisdiction that the Seventh Circuit overturned. When this issue was raised
at trial, the Court concluded that evidence that the case was dismissed for lack of
personal jurisdiction and then reinstated was inadmissible under Rule 403. It would
have caused a significant diversion from the issues of the case to explain the procedural
history of the case to the jury, and it risked confusing the jury regarding the implications
of the Court's prior dismissal. The defendants do not point to any new considerations
that affect the Court's prior ruling. Rather, they simply continue to press their argument
that the evidence has substantial probative value. The Court still disagrees. The
defendants contend that the fact that the defendants did not sell Diesel Test products
while the case was dismissed shows a lack of malice, but the evidence at trial showed
that the defendants did continue selling Diesel Test during at least part of that time.
Thus, although the evidence may have some probative value, as the Court
acknowledged at trial, it is minimal and significantly outweighed by the other factors the
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Court noted.
Because the Court concludes that the jury was properly instructed, it denies the
defendants' motion to overturn the jury's finding of willfulness and its award of punitive
damages on this ground.
2.
Punitive damages
In the alternative, the defendants renew, in a footnote, their motion for judgment
as a matter of law in their favor on punitive damages because they contend that there
was insufficient evidence of their reckless disregard for Curry's rights.
Under Federal Rule of Civil Procedure 50(b), judgment as a matter of law is
proper if "a reasonable jury would not have a legally sufficient evidentiary basis" to
support a verdict for the nonmovant. Fed. R. Civ. P. 50(a)(1), (b). On a Rule 50(b)
motion, a court "construes the evidence strictly in favor of the party who prevailed
before the jury and examines the evidence only to determine whether the jury's verdict
could reasonably be based on that evidence." Passananti v. Cook County, 689 F.3d
655, 659 (7th Cir. 2012). "That includes drawing all reasonable inferences in that
party's favor and disregarding all evidence favorable to the moving party that the jury is
not required to believe." May v. Chrysler Group, LLC, 716 F.3d 963, 971 (7th Cir.
2012). Courts are "obliged to review the record to ensure that sufficient evidence exists
to support the verdict, but [courts] will not otherwise consider the weight of the
evidence" or "reevaluate the credibility of witnesses." McNabola v. Chi. Transit Auth.,
10 F.3d 501, 515 (7th Cir. 1993). Consequently, a jury verdict will be overturned only if
the court concludes that "no rational jury could have found for the prevailing party."
Stragapede v. City of Evanston, 865 F.3d 861, 865 (7th Cir. 2017) (internal quotation
33
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marks omitted).
As the jury was instructed, it could award punitive damages only if it found that
"the defendants' acts were willful and malicious or were in reckless disregard of Mr.
Curry's rights." Dkt. no. 399–9 at 21:1–9. The defendants do not contend that this
instruction was improper, nor did they object to the instruction at trial.
There was ample evidence to support the jury's decision to impose punitive
damages in this case. For starters, the jury reasonably could have agreed with Curry
that the similarities between his mark and the defendants were too significant to be a
coincidence and that the defendants intentionally copied Curry's mark. Moreover, in
response to Curry's cease-and-desist request, the defendants decided to ignore it and
"let him sue" while they continued to sell their infringing products. Dkt. no. 399-3 at
65:19–21. The defendants also continued selling Diesel Test even after it was banned
on Amazon and Curry had filed suit.
In contending that the evidence reflected that they acted in good faith, the
defendants point to their testimony that they engaged in "extensive searches" in
response to Curry's cease-and-desist requests. Defs.' Rule 59(e) Mot., Opening Mem.
at 6. But the defendants did not offer any records of these searches. Curry argued at
trial that had the defendants performed the searches as they contended, they would
have discovered his product. The credibility of the defendants' testimony on this point
was for the jury to assess, not the Court. See Venson v. Altamirano, 749 F.3d 641, 647
(7th Cir. 2014) ("[T]he credibility of the officers' testimony . . . was for the jury, not us, to
assess."); Whitehead v. Bond, 680 F.3d 919, 928 (7th Cir. 2012) ("Since the credibility
of witnesses is peculiarly for the jury, it is an invasion of the jury's province to grant a
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new trial merely because the evidence was sharply in conflict.") (alteration accepted)
(internal quotation marks omitted).
In short, the Court denies the defendants' motion in the alternative for judgment
as a matter of law in their favor on punitive damages.
The defendants also contend that the jury's punitive damages award is "grossly
excessive" and must be reduced. BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 562
(1996). "The Supreme Court, in testing awards of punitive damages for compliance with
due process, has established three guideposts: (1) the reprehensibility of the
defendant's conduct; (2) the disparity between the actual harm suffered and the punitive
award; and (3) the difference between the award authorized by the jury and the
penalties imposed in comparable cases." Epic Sys. Corp. v. Tata Consultancy Servs.
Ltd., 980 F.3d 1117, 1140 (7th Cir. 2020) (internal quotation marks omitted).
To determine the reprehensibility of the defendants conduct, the Court considers
whether: (1) "the harm caused was physical as opposed to economic;" (2) "the tortious
conduct evinced an indifference to or a reckless disregard of the health or safety of
others;" (3) "the target of the conduct had financial vulnerability;" (4) "the conduct
involved repeated actions or was an isolated incident;" and (5) "the harm was the result
of intentional malice, trickery, or deceit, or mere accident." Id. at 1141.
The defendants do not expressly address any of the five factors the Seventh
Circuit has instructed courts to consider on the first guidepost. Instead, they assert that
they "inadvertently ran afoul of another's trademark," which is "not a reprehensible act,"
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and they note in passing that their infringement did not cause any physical injury. 6
Defs.' Rule 59(e) Mot., Opening Mem. at 9. Contrary to the defendants' characterization
of their infringement as a "mistake," id., the Court has already concluded above that the
evidence supports that their infringement was not a "mere accident," Epic, 980 F.3d at
1141. For the remaining three factors, the defendants do not contest that each factor
weighs in favor of the jury's punitive damages award.
The parties primarily contest the second guidepost. This requires the Court to
"analyze the ratio of punitive damages to the 'harm, or potential harm' inflicted on the
plaintiff." Id. at 1142 (quoting State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408,
424 (2003)). The defendants contend that Curry's harm was $2,500 and the punitive
damages award is $900,000, making the ratio 360:1.
For starters, Curry contends that the ratio calculation must be calculated on a
per-defendant basis, in other words, based on the award against each defendant of
$300,000, not the aggregate total of $900,000. See Planned Parenthood of
Columbia/Willamette Inc. v. Am. Coal. of Life Activists, 422 F.3d 949, 960 (9th Cir.
2005) ("[T]o compare the amount of compensatory damages awarded to one plaintiff
with the total amount of punitive damages awarded to that plaintiff from all defendants
shifts the focus away from a particular defendant's conduct to the defendants' conduct
en grosse."). The defendants do not respond to this contention, thereby forfeiting the
issue. See Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466 (7th Cir. 2010) ("Failure to
Curry contends that this factor still weighs in his favor because he experienced mental
and emotional distress. Because the defendants do not contest that the other four
factors support the jury's award of punitive damages, the Court need not resolve the
parties' dispute on this point.
6
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respond to an argument . . . results in waiver.").
The more difficult issue is the proper amount of harm to include in the ratio.
Curry contends that the ratio should include the defendants' profits award. The
defendants argue that because that award is distinct from the award for his actual harm,
it should not be included.
"In most cases, the compensatory-damages award approximates the plaintiff's
harm." Epic, 980 F.3d at 1142. The Seventh Circuit has noted, however, that
computing the appropriate ratio may "pose a challenging task" where damages are
"based on the benefit to [the defendant], not because of any harm suffered by" the
plaintiff. Id. at 1143. Although the Seventh Circuit did not have to reach the issue in
Epic, it noted that "at least one other court has compared an unjust enrichment award to
the punitive-damages award under this guidepost when state law allowed punitive
damages to be imposed for the underlying claim." Id.; see also Rhone-Poulenc Agro,
S.A. v. DeKalb Genetics Corp., 272 F.3d 1335, 1351 (Fed. Cir. 2001) ("[T]he unjust
enrichment gained by DeKalb is logically related to the harm or potential harm caused
RPA, and it was appropriate to base the award of punitive damages on the unjust
enrichment award."), vacated, 538 U.S. 974 (2003), reinstated as modified, 345 F.3d
1366 (2003); TXO Prod. Corp. v. All. Res. Corp., 509 U.S. 443, 460 (1993) ("It is
appropriate to consider . . . the possible harm to other victims that might have resulted if
similar future behavior were not deterred."). Because the defendants' profits award
stems from considerations of unjust enrichment and deterrence, Web Printing, 906 F.2d
at 1205, the Court concludes that it is properly included as potential harm in the ratio.
In sum, the proper ratio is $547,095.44 in defendants' profits plus $2,500 in
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actual damages, for a total of $549,595.44, to the per-defendant punitive damages
award of $300,000. Thus, the ratio is less than 1:1, which "is easily permissible."
Kapelanski v. Johnson, 390 F.3d 525, 534 (7th Cir. 2004).
The final guidepost is "the difference between the punitive award authorized by
the jury and civil penalties imposed in comparable cases." Epic, 980 F.3d at 1145. The
defendants cite a few cases with lower punitive damages awards. "But even if the
punitive award is higher than those in comparable cases, this guidepost generally
deserves less weight than the other two." Rainey v. Taylor, 941 F.3d 243, 255 (7th Cir.
2019). Having found that the ratio is in the easily permissible range, the third guidepost
does not alter the Court's conclusion that the jury's punitive damages award is not
excessive. See id. ("We are reluctant to overturn the punitive damages award on the
basis of the third guidepost alone." (alterations accepted) (quoting Willow Inn, Inc. v.
Pub. Serv. Mut. Ins. Co., 399 F.3d 224, 238 (3d Cir. 2005))).
In sum, the Court denies the defendants' motion to reduce the jury's punitive
damages award.
3.
Nussbaum Family Trust instruction
Next, the defendants contend that the jury instruction that "[w]hether and the
extent to which you consider the Nussbaum Family Trust in assessing each defendants'
financial condition are matters for you to decide" was improper for two reasons. Dkt. no.
399-9 at 22:12–14.
First, the defendants contend that it "effectively allowed the jury to pierce the
corporate veil [sic] by considering the Trust's assets to be the assets of Defendants for
purposes of determining the punitive damage award, without ever instructing the jury on
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the necessary standards to allow the corporate veil [sic] to be pierced." Defs.' Rule
59(e) Mot., Opening Mem. at 12. But any argument that the Court should have
instructed the jury on the circumstances under which the jury could "pierce the
corporate veil" is forfeited. This objection was not made at trial. See Dkt. no. 385-1 at
1094:3–5 ("And I think the issue that defendants raise is not that it's incorrect but rather
that it's calling attention to it."). Nor was it made in the defendants' filed written
objections to the Court's instructions. See Dkt. no. 373. Indeed, Curry proposed an
instruction at trial regarding the circumstances under which the jury could consider the
trust, and the defendants objected. Thus, the defendants' first contention regarding this
instruction is forfeited. See Schobert, 304 F.3d at 730.
The defendants' second reason is the same as the objection they made at trial,
namely, that the instruction improperly brought attention to the trust. As the Court
explained at trial, the instruction was necessary because the parties disputed whether
the jury should consider the trust and evidence regarding the trust comprised a
substantial amount of the evidence introduced at trial. And this was not the only place
where the instructions addressed how the jury should consider particular evidence. In
particular, the jury instructions stated that the jury did not have to accept the testimony
of Curry's expert witness, Herman. In overruling the defendants' objection at trial, the
Court also emphasized that the instruction was neutrally worded.
In their motion, the defendants do not contest any aspects of the Court's prior
reasoning. Rather, they argue that their failure to object to the instruction about expert
testimony "does not waive or diminish" their objection to the trust instruction. Defs.'
Rule 59(e) Mot., Opening Mem. at 12. But this does not engage with the logic of the
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Court's reasoning. The defendants also do not cite any authority for the proposition that
instructing the jury in a neutral way that it had to decide whether and the extent to which
it should consider a specific subject of evidence could constitute a manifest error of law.
Thus, the Court concludes that the instruction regarding the Nussbaum Family Trust
was not improper and that giving the instruction cannot be grounds for altering the
judgment.
4.
Personal liability instruction
Lastly, the defendants contend that the personal liability instruction was
improper. They continue to press the argument that to be individually liable, the officers
must act outside the scope of their duties or misuse the corporate form. As the Court
held in denying their motion for summary judgment, this is not the law. See Peaceable
Planet, Inc. v. Ty, Inc., 362 F.3d 986, 994 (7th Cir. 2004) ("[T]here is some evidence
that Warner may have been personally involved in the decision to use the name Niles
on a Ty camel, and if so he may be . . . a joint tortfeasor and therefore suable."); Weller
Mfg. Co. v. Wen Prods., Inc., 231 F.2d 795, 801 (7th Cir. 1956) (finding individual
liability where "[t]his individual admitted that he was at all times in control of the
administrative and managerial policy of the corporation" and "had before him the Weller
device when he designed his infringing gun, which he deliberately made identical with
Weller"). "Indeed, courts in this district have rejected the argument that even if an
officer personally participates in the manufacture or infringement, such acts cannot lead
to liability unless they fall outside of the officer's job description." UIRC-GSA Holdings
Inc. v. William Blair & Co., L.L.C., No. 15 C 9518, 2017 WL 3593117, at *4 (N.D. Ill.
Aug. 21, 2017) (internal quotation marks omitted). The Court concludes that the jury
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instruction on personal liability was proper and therefore denies the defendants' motion
to alter the judgment on this ground. 7
In sum, the Court denies the defendants' Rule 59(e) motion.
C.
Curry's motion for a finding of IUDTPA liability
Curry has moved for the Court to find the defendants liable for violating the
IUDTPA. Curry's state unfair competition claim—which is what the IUDTPA claim is—
"mirrors" the federal "infringement analysis." AHP Subsidiary Holding Co. v. Stuart Hale
Co., 1 F.3d 611, 619 (7th Cir. 1993); UL LLC v. Am. Energy Prod., LLC, 358 F. Supp.
3d 753, 758 n.2 (N.D. Ill. 2019) (Kennelly, J.) (noting that IUDTPA claims "are subject to
precisely the same standards as [ ] federal infringement claims"). Curry contends that
because the defendants stipulated that Revolution is liable for infringement and the jury
found that all the defendants willfully infringed Curry's mark, the Court should also find
that the defendants willfully violated the IUDTPA.
As a preliminary matter, the defendants argue that they should not be found
liable because Curry does not have common law trademark rights in Illinois. Although
the defendants concede that they stipulated that Revolution was liable for Counts III and
At some points in their motion, the defendants appear to argue that the evidence at
trial did not establish that Joshua and Barry were personally liable even under the
proper standard. But this argument, assuming it was clearly asserted, is forfeited
because it was not raised as grounds for their Rule 50(a) motion made at trial. Rule
59(e) "may not be used . . . to raise arguments or present evidence that could have
been raised prior to the entry of judgment." Exxon Shipping Co. v. Baker, 554 U.S. 471,
486 n.5 (2008); see also ING Glob. v. United Parcel Serv. Oasis Supply Corp., 757 F.3d
92, 96 (2d Cir. 2014) ("[W]e do not believe that the Rule permits a party to obtain
judgment as a matter of law under Rule 59(e) after failing to comply with the carefully
crafted structure and standards of Rules 50 and 51."). In any event, the Court explains
below in addressing Curry's IUDTPA claim that the evidence sufficiently established
Joshua and Barry's personal liability.
7
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V, they argue that they refused to stipulate to liability on Curry's IUDTPA claim in order
to retain their right to contest that Curry had enforceable rights in Illinois. This
contention cannot be reconciled with the stipulation. The defendants stipulated that
"Revolution is liable for infringing Plaintiff's Diesel Test mark under Count III and Count
V of Plaintiff's Complaint." Dkt. no. 156 at ¶ 2. Count V of the complaint, in turn, states
that "Defendants' acts constitute trademark infringement in violation of the common law
of the State of Illinois." Dkt. no. 1 at ¶ 76. Given this context, the stipulation
straightforwardly admits that Curry has enforceable common law trademark rights in
Illinois. As the Court explained in granting Curry's motion in limine, Revolution could not
conceivably be liable for violating the Illinois common law of trademark infringement if
Curry did not have enforceable common law trademark rights in Illinois.
That said, under "the long-standing rule of construction in Illinois," "a statute is
without extraterritorial effect unless a clear intent in this respect appears from the
express provisions of the statute." Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill. 2d
100, 184–85, 835 N.E.2d 801, 852 (2005) (internal quotation marks omitted). No such
intent is expressed in IUDTPA. See IPOX Schuster, LLC v. Nikko Asset Mgmt. Co., 191
F. Supp. 3d 790, 807 (N.D. Ill. 2016) (Kennelly, J.). Curry is therefore required to show
that "the circumstances relating to [his] disputed transactions with [the defendants]
occurred primarily and substantially in Illinois." Avery, 216 Ill. 2d at 187, 835 N.E.2d at
854. To make this determination, courts consider the following factors: "(1) the
plaintiff's residence, (2) where the misrepresentation was made, (3) where the damage
to the plaintiff occurred, and (4) whether the plaintiff communicated with the defendant
in Illinois." Specht v. Google, Inc., 660 F. Supp. 2d 858, 866 (N.D. Ill. 2009) (citing
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Avery, 216 Ill. 2d at 186–88, 835 N.E.2d at 853–54).
First, it is undisputed that Curry's residence is in Illinois. Because he resides in
Illinois, the damage analyzed under the third factor occurred in Illinois. See Republic
Techs. (NA), LLC v. BBK Tobacco & Foods, LLP, No. 16 C 3401, 2022 WL 910862, at
*3 (N.D. Ill. Mar. 29, 2022) ("Courts in this district have found that when the plaintiff
resides in Illinois, damages are often suffered in Illinois.").
Second, the misrepresentation, namely, the defendants' use of Curry's mark,
occurred in Illinois. Joshua testified at trial that Revolution sold its Diesel Test product
to hundreds of customers in Illinois. Although the defendants sold their products in
other states as well, there is no requirement that the sales be exclusively in Illinois. See
id. (finding that this factor weighed in the plaintiff's favor where "the evidence showed[]
that HBI's false advertising claims occurred nationwide, including in Illinois"); Specht,
660 F. Supp. 2d at 866 (holding that the plaintiff stated a IUDTPA claim where "[t]he
alleged infringement took place on the Internet and was international in scope,
presumably occurring in Illinois"). In contending that this factor weighs in their favor, the
defendants argue that Curry failed to establish that he had trademark rights in Illinois or
that he made sales in Illinois. But, as explained above, the defendants—despite their
contention to the contrary—stipulated to this via their stipulation to liability on this claim.
Given the stipulation, Curry was not required to provide evidence of his sales for this
factor to weigh in his favor. The defendants do not cite any authority to the contrary.
Lastly, Curry communicated with the defendants via Facebook in Illinois.
Although the defendants assert that they could not have known Curry's location through
his Facebook message, they do not cite any authority for the proposition that their
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knowledge of Curry's location is relevant to the analysis.
In short, the Court finds that each factor weighs in favor of finding that the
defendants' misconduct occurred "primarily and substantially" in Illinois.
The defendants assert two other arguments against liability, but the Court has
already rejected both. First, they again contend that neither Joshua nor Barry can be
held individually liable because they did not act outside their scope of duties as officers.
As stated earlier, to be held individually liable, the evidence need only show that Joshua
and Barry "personally participate[d]" in the infringement. 4SEMO.com, 939 F.3d at
912–13 ("A corporate officer is individually liable if he 'personally participates in the
manufacture or sale of the infringing article, uses the corporation as an instrument to
carry out his own willful and deliberate infringements, or knowingly uses an
irresponsible corporation with the purpose of avoiding personal liability.'" (alterations
accepted) (quoting Dangler v. Imperial Mach. Co., 11 F.2d 945, 947 (7th Cir. 1926))).
The evidence at trial established that Joshua personally participated in the
infringement. Joshua decided to use the Diesel Test name, was involved in creating the
label, managed the sales of Diesel Test, made the decision to continue selling Diesel
Test after Curry's cease-and-desist request, and attempted to register for a federal
trademark on Diesel Test after learning of Curry's common law trademark. The
defendants' characterizations of Joshua's activities as "generic," Defs.' Opp. to Pl.'s
IUDTPA Mot. at 11, is incorrect.
The evidence was also sufficient to establish Barry's personal liability. He
consulted with Joshua on the Diesel Test name, was involved in the decision to ignore
Curry's cease-and-desist request, and encouraged Joshua's filing of Revolution's Diesel
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Test trademark application. Contrary to the defendants' assertion, the evidence
established Barry's involvement beyond merely failing to stop the infringing sales.
Next, the defendants contend that the Court should find that the defendants did
not act willfully because the jury was improperly instructed. The Court has already
concluded that the jury was properly instructed on willfulness and that the evidence was
sufficient to support the jury's finding. The defendants' arguments for why the Court
should nonetheless find that they did not act willfully are unpersuasive. First, they again
point to their decision to stop selling Diesel Test while the case was dismissed. But this
assertion is contrary to the evidence presented at trial that the defendants did continue
making infringing sales for months after the case was dismissed. Second, they also
emphasize their searches that informed their claimed good-faith belief that Curry did not
have any trademark rights. But, as noted above, the defendants did not produce any
evidence of these searches aside from their testimony. The Court, like the jury, finds
the testimony on this point to lack credibility. In Joshua's email asking a Revolution
employee to perform a search, he also "vote[d] to let [Curry] sue" while they sold their
remaining Diesel Test products. Dkt. no. 399-3 at 65:19–21. This suggests that the
defendants had already decided they would continue selling their infringing product
regardless of the outcome of any searches performed.
The defendants contend that Curry's willfulness argument is predicated on their
decision not to stop selling immediately after receiving his cease-and-desist request.
But this characterization is incorrect. The record at trial contained further evidence of
willfulness as previously described, including that the defendants did not perform
adequate searches in response to Curry's cease-and-desist letters and continued to sell
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their infringing products even after Amazon's ban.
Moreover, the defendants do not cite any authority for the proposition that
deciding to continue infringing despite Curry's cease-and-desist requests cannot sustain
a willfulness finding. They contend that in the patent infringement context, "the mere
fact that an accused infringer continues its infringing activity cannot support a finding of
willfulness where the accused infringer presents legitimate defenses and did not know
of the asserted patents until the filing of the suit." Defs.' Opp. to Pl.'s IUDTPA Mot. at 14
(quoting Civix-DDI, LLC v. Cellco P'ship, 387 F. Supp. 2d 869, 903 (N.D. Ill. 2005)). But
the defendants did know of Curry's mark before he filed suit. Moreover, the Federal
Circuit requires an accused infringer with notice to exercise "due care to avoid
infringement" which, as stated above, the defendants failed to do in this case. Crystal
Semiconductor Corp. v. TriTech Microelecs. Int'l, Inc., 246 F.3d 1336, 1351 (Fed. Cir.
2001). The fact that the accused infringer "presents a non-frivolous defense to
infringement" does not preclude a willfulness finding. Id.
In sum, the Court concludes that the evidence at trial establishes by a
preponderance of the evidence that the defendants willfully violated the IUDTPA. See
Bingham v. Inter-Track Partners, 234 Ill. App. 3d 615, 621, 600 N.E.2d 70, 75 (1992)
(finding willfulness where "the defendant made a reasoned, deliberate business
decision to proceed with [the trademark] despite plaintiffs' protest").
D.
Curry's motion for pre- and post-judgment interest
Curry has also moved under Rule 59(e) to amend the judgment to include pre-
and post-judgment interest. The defendants do not object to Curry's request for postjudgment interest, and the Court notes that post-judgment interest applies by operation
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of law. See 28 U.S.C. § 1961(a). Regarding Curry's motion for prejudgment interest,
the defendants only contest the proper rate and the applicable period.
Curry contends that the defendants should pay prejudgment interest at the prime
rate plus 2%. The defendants contend that an increase above the prime rate is
unwarranted. The Court agrees. The Seventh Circuit has repeatedly stated that the
prime rate is the preferred rate for awarding prejudgment interest. See Gorenstein
Enters., Inc. v. Quality Care-USA, Inc., 874 F.2d 431, 436 (7th Cir. 1989) ("[W]e suggest
that district judges use the prime rate for fixing prejudgment interest where there is no
statutory interest rate."); First Nat. Bank of Chi. v. Standard Bank & Tr., 172 F.3d 472,
480 (7th Cir. 1999) ("We hold today that to . . . award something other than the prime
rate is an abuse of discretion, unless the district court engages in such a refined
calculation."); Matter of Oil Spill by Amoco Cadiz Off Coast of France, 954 F.2d 1279,
1332 (7th Cir. 1992) ("[U]nless it engages in such refined rate-setting, a court should
use the 'prime rate' . . . .").
Curry contends that a prime rate-plus formula is necessary because the
defendants are distressed borrowers. But the Seventh Circuit has acknowledged that
the prime rate, as "a market-based estimate," "may miss the mark for any particular
party." Matter of Oil Spill, 954 F.2d at 1332. Still, the Seventh Circuit has encouraged
application of the prime rate because it "is a readily ascertainable figure which provides
a reasonable although rough estimate of the interest rate necessary to compensate
plaintiffs not only for the loss of the use of their money but also for the risk of default."
Gorenstein, 874 F.2d at 436. The Court concludes that the prime rate is the appropriate
rate of prejudgment interest in this case.
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Curry argues that district courts are permitted to engage in "refined rate-setting."
First Nat. Bank of Chi., 172 F.3d at 480. But even so, he acknowledges that the
decision to award pre-judgment interest at a rate above the prime rate "is fully within the
Court's discretion." Pl.'s Reply in Supp. of Mot. for Interest at 5. The Court declines to
exercise its discretion to engage in such rate-setting, especially where Curry's proposed
2% increase itself does not appear to be the result of "refined rate-setting." Among
other things, Curry does not point to any interest rates charged on the defendants' loans
as evidence for his 2% adjustment. See Matter of Oil Spill, 954 F.2d at 1332 (noting
that "a court could draw an interest rate directly from" the defendant's "publicly traded
notes and debentures"). Rather, he asserts that it is his "conservative estimate." Pl.'s
Mem. in Supp. of Mot. for Interest at 7.
Regarding the applicable time period, the defendants contend that it should
exclude the time during which the case was dismissed and the period when the trial was
rescheduled. But they do not cite any authority for their position. Rather, "prejudgment
interest typically accrues from the date of the loss or from the date on which the claim
accrued." Am. Nat. Fire Ins. Co. ex rel. Tabacalera Contreras Cigar Co. v. Yellow
Freight Sys., Inc., 325 F.3d 924, 935 (7th Cir. 2003); see also W. Virginia v. United
States, 479 U.S. 305, 311 n.2 (1987) ("Prejudgment interest serves to compensate for
the loss of use of money due as damages from the time the claim accrues until
judgment is entered, thereby achieving full compensation for the injury those damages
are intended to redress."). Because excluding the time as the defendants suggest
would undercompensate Curry, the Court declines to do so. See City of Milwaukee v.
Cement Div., Nat'l Gypsum Co., 515 U.S. 189, 195 (1995) ("The essential rationale for
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awarding prejudgment interest is to ensure that an injured party is fully compensated for
its loss."). The Court therefore awards prejudgment interest at the prime rate beginning
with the date of the first known infringing sale, which the defendants do not dispute is
October 19, 2016.
Curry contends that, in the event the Court later awards attorney's fees, the Court
should also award prejudgment interest on the amount of attorney's fees. Because no
motion for attorney's fees has yet been filed, the Court declines to address this issue at
this juncture. Curry contends that "there is no doubt he will seek attorneys' fees." Pl.'s
Reply in Supp. of Mot. for Interest at 13. If so, the Court will address the issue in
connection with that motion. The Court overrules Curry's contention that the defendants
"have forfeited any substantive objection" to this by correctly arguing that the matter is
not yet ripe. Id.
The parties agree on the applicable formula for calculating interest. Because the
Court has modified the profits award, the parties are directed to calculate prejudgment
interest using the prime rate from October 19, 2016 through September 1, 2023 and
submit a joint status report with the calculation and figure by August 30, 2023.
E.
Curry's motion for a permanent injunction
Lastly, Curry has moved under Rule 59(e) for the Court to enter a permanent
injunction.
To be entitled to a permanent injunction, Curry must establish: "(1) that it has
suffered an irreparable injury; (2) that remedies available at law, such as monetary
damages, are inadequate to compensate for that injury; (3) that, considering the
balance of hardships between the plaintiff and defendant, a remedy in equity is
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warranted; and (4) that the public interest would not be disserved by a permanent
injunction." eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006). The Court
concludes that each factor is met in this case.
First, the Seventh Circuit has "clearly and repeatedly held that damage to a
trademark holder's goodwill can constitute irreparable injury for which the trademark
owner has no adequate legal remedy." Re/Max N. Cent., Inc. v. Cook, 272 F.3d 424,
432 (7th Cir. 2001). In this case, the defendants stipulated to actual confusion, and the
jury found that Curry's goodwill was damaged by the defendants' infringement.
Moreover, Curry's trademark and the defendants' "infringing use are identical, [ ] the
products are the same, and [ ] the markets are the same," which are factors "indicative
of irreparable injury." Ideal Indus., Inc. v. Gardner Bender, Inc., 612 F.2d 1018, 1025
(7th Cir. 1979). The Court concludes that Curry has established irreparable injury and
that "[m]onetary damages are likely to be inadequate compensation for such harm." Id.
at 1026. Given the Court's conclusion, it need not address the parties' dispute
regarding whether there is a presumption of rebuttable harm in trademark actions. See
Chi. Mercantile Exch. Inc. v. Ice Clear US, Inc., No. 18 C 1376, 2021 WL 3630091, at
*29 (N.D. Ill. Aug. 17, 2021) (Kennelly, J.) (concluding that "there does not appear to be
a basis for applying a one-off rule regarding presumed harm in trademark cases").
The defendants contend that the first factor for issuance of an injunction is not
met because they have stopped infringing, relying on this Court's decision in Chicago
Mercantile Exchange. But in that case, the defendants had "stopped using the
[infringing] mark and there [wa]s no evidence in the record to suggest otherwise." Id. at
30. In this case, by contrast, there was evidence in the record contradicting the
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defendants' assertion that they voluntarily stopped using Curry's trademark in 2018. For
example, Curry testified to seeing advertisements for Revolution's Diesel Test as late as
2020. Moreover, the evidence at trial established that the defendants created new
products by simply relabeling old products, which suggests that it would be particularly
easy for them to infringe again. See United Air Lines, Inc. v. Air Line Pilots Ass'n, Int'l,
563 F.3d 257, 275 (7th Cir. 2009) ("The court may consider how easily former practices
might be resumed at any time in determining the appropriateness of injunctive relief.").
Next, the Court concludes that the balance of hardships favors Curry. If it is true,
as the defendants contend, that they stopped selling Diesel Test in 2018, then it is
unclear what hardship an injunction would impose on them. Indeed, the defendants did
not clearly articulate any hardship, contending instead that Curry's "trademark rights are
not permanent" and are limited in geographic scope. Defs.' Opp. to Pl.'s Mot. for
Permanent Inj. at 4–5. Though this contention arguably casts doubt on the believability
of their assertion that they have no "intention of utilizing the Diesel Test mark in any
capacity whatsoever," id. at 5, it does not establish any hardship.
Lastly, a permanent injunction would serve the public interest. "[T]he public
interest is served by the injunction because enforcement of the trademark laws prevents
consumer confusion." Eli Lilly & Co. v. Nat. Answers, Inc., 233 F.3d 456, 469 (7th Cir.
2000); see also Abbott Lab'ys v. Mead Johnson & Co., 971 F.2d 6, 19 (7th Cir. 1992)
("[Injunctive] relief would serve, rather than disserve, the public interest in truthful
advertising, an interest that lies at the heart of the Lanham Act."). In contending that the
public interest would be disserved, the defendants argue that "any injunction would
need to account for the scenario of [Curry]'s loss of rights." Defs.' Opp. to Pl.'s Mot. for
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Permanent Inj. at 5. But the defendants do not cite any authority for this proposition.
Nor do the defendants explain how an injunction might take Curry's potential "loss of
rights" into account. Rather, the defendants contend that an injunction is not necessary
because "[i]f Curry has trademark rights, that is sufficient to prevent Defendants from
using the mark." Id. This contention is unpersuasive given the jury's finding of willful
infringement. Moreover, adopting the defendants' position essentially would mean that
an injunction never serves the public interest in a trademark case, which is not the law.
In sum, the Court concludes that Curry is entitled to a permanent injunction.
Curry requests that the Court enter an injunction incorporating the terms of the
preliminary injunction and including a few additional terms. The defendants object to
several of the proposed terms.
First, Curry's proposed injunction would cover trademarks that were not asserted
at trial. The defendants contend that the injunction should be limited to Diesel Test.
Neither party provides any authority on the issue of whether, or under what
circumstances, related marks not asserted at trial can be included in an injunction.
Curry cites Ariel Investments, LLC V. Ariel Capital Advisors LLC, No. 15 C 3717, Dkt.
199-1 ¶ 2(a) (N.D. Ill. Mar. 9, 2017), but the related marks in that case were raised at
trial.
Although the preliminary injunction in this case included related marks, Curry did
not litigate a theory of a family of marks after that point. Curry contends that the
defendants should not be able to infringe Curry's "other marks in the 'Diesel' family."
Pl.'s Reply in Supp. of Mot. for Permanent Inj. at 12. But he never attempted to
establish that he had a family of "Diesel" marks. See AM Gen. Corp. v. DaimlerChrysler
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Corp., 311 F.3d 796, 819 (7th Cir. 2002) ("[T]he proponent of a family of marks must
prove that, prior to the junior user's entry, all or many of the marks in the alleged family
were used and promoted in such a way as to create public perception of the family mark
as an indicator of source.") (internal quotation marks omitted). Given Curry's decision to
pursue only the Diesel Test mark at trial, the permanent injunction will be limited to
Diesel Test accordingly.
Next, Curry contends that the injunction should require the defendants to
withdraw their pending opposition to Curry's federal trademark application for Diesel
Test. The defendants' objection to this proposal is hard to follow. They contend that
their opposition to Curry's federal trademark application is warranted because it is
"solely focused" on Curry's attempt to trademark the word "Test" apart from "Diesel
Test." Defs.' Opp. to Pl.'s Mot. for Permanent Inj. at 10. But Curry's application is for
the phrase "Diesel Test," not simply "Test." The opposition that the defendants attach
to their motion also plainly asserts further objections to Curry's application. See Dkt. no.
398-2. The Court therefore grants Curry's request to include this in the injunction.
Without citing relevant authority, the defendants raise various other objections,
none of which have merit. First, the defendants contend that the proposed injunction is
too broad because it is not limited to "testosterone boosting nutritional supplement"
goods specifically. Defs.' Opp. to Pl.'s Mot. for Permanent Inj. at 7. Limiting the
injunction in this manner is unwarranted, however, given the evidence at trial that the
defendants sold other kinds of goods displaying their brand names to develop their
brand.
Second, the defendants argue that Curry's "requests for certifications and
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delivery of labels and signs are unnecessary." Id. at 7. But the defendants concede
that Curry's requests for certifications and materials bearing Curry's mark is permitted
by 15 U.S.C. § 1116(a). Moreover, their assertion that this proposed term is "nothing
but busy work" because Revolution stopped selling infringing products years ago, id. at
8, is unpersuasive given the dispute at trial regarding when the defendants stopped
infringing Curry's mark. The defendants do not cite any authority for the proposition that
they must retain all such materials as litigation documents.
Finally, the defendants contend that the proposed injunction is not sufficiently
definitive in part because it precludes any trademark that is "confusingly similar" to
Curry's mark. Defs.' Opp. to Pl.'s Mot. for Permanent Inj. at 9. But the defendants
themselves state that this requirement "is just a reiteration that [they] are prohibited from
violating trademark law." Id. at 9. The Court concludes that this language is not
impermissibly vague. See Eli Lilly & Co. v. Arla Foods, Inc., 893 F.3d 375, 384 (7th Cir.
2018) ("The Lanham Act's prohibition on implied falsehoods makes the use of
somewhat inexact language unavoidable.").
The defendants also object on vagueness grounds to Curry's proposed term
prohibiting the defendants from "doing any other act likely to induce the mistaken belief
that Curry is the source of products that are not actually manufactured or sold by Curry."
Defs.' Opp. to Pl.'s Mot. for Permanent Inj. at 9. Curry does not respond to this
objection, thereby forfeiting the point. See Bonte, 624 F.3d at 466. The Court therefore
will exclude this term from the injunction.
In sum, the Court grants Curry's motion to enter a permanent injunction in
accordance with this decision.
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Conclusion
For the foregoing reasons, the Court (1) grants plaintiff Curry's motion to
determine infringing profits and awards $547,095.44 in defendants' profits [dkt. no. 388];
(2) denies the defendants' motion to amend or alter the judgment [dkt. no. 384]; (3)
grants plaintiff Curry's motion for a finding of IUDTPA liability [dkt. no. 378]; (4) grants in
part plaintiff Curry's motion for pre- and post-judgment interest [dkt. no. 390]; and (5)
grants in part plaintiff Curry's motion for a permanent injunction [dkt. no. 392]. The
parties are directed to calculate prejudgment interest in accordance with this decision
through September 1, 2023 and submit a joint status report with the calculation and
amount by August 30, 2023. Finally, plaintiff is directed to provide a Word version of the
proposed injunction, modified as indicated in this decision, to the undersigned judge's
proposed order e-mail address by August 30, 2023.
________________________________
MATTHEW F. KENNELLY
United States District Judge
Date: August 23, 2023
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