Republic Technologies (NA), LLC v. BBK Tobacco & Foods, LLP

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

RE PUBLIC TECHNOLOGIES (NA), LLC

and REPUBLIC TOBACCO, L.P.,

Plaintiffs,

Case No. 16-cv-03401

vs.

Judge Thomas M. Durkin

BBK TOBACCO & FOODS, LLP d/b/a

HBI INTERNATIONAL,

Defendant.

REPUBLIC’S RULE 50(a) MOTION

“Federal Rule of Civil Procedure 50(a)(1) allows a district court to enter

judgment against a party who has been fully heard on an issue during a jury

trial ‘if a reasonable jury would not have a legally sufficient evidentiary basis to

find for the party on that issue.’” Howell v. Wexford Health Sources, Inc., 987

F.3d 647, 658 (7th Cir. 2021).

HBI has now been fully heard on its claims of copyright and trade dress

infringement, and the result is clear. HBI has failed to prove a likelihood of

confusion between its trade dress for RAW Organic Hemp and the trade dress

for OCB Organic Hemp. Moreover, HBI has failed to prove copying of any

original or creative element of its copyrighted materials.

I. TRADE DRESS

The Court is well familiar with HBI’s claimed trade dress. It involves the

word “RAW” in a distinctive tone of red, pitched at an upward angle from left to

right, in a distressed serif font that, as Mr. Kesselman described it, looks as

though it has been “stamped” instead of printed. HBI’s trade dress includes

none of those things.

Ian Kobe, HBI’s graphics director, testified that the key elements that

make the “RAW” brand recognizable to consumers were: (1) the “RAW” as

described above; (2) the realistic-looking “string” graphic that appears to

encircle the package as though the package were actually tied up in string; (3)

an image of green grass at the foot of the packaging; (4) a round “button” or

“stamp” with “purest natural hemp fibers” or similar language; (5) particular

language (“natural unrefined hemp rolling papers”) beneath the “RAW,” also

pitched at an angle; (6) a pleasant beige background; and (7) specific colors of

red and brown.

Republic’s OCB Organic Hemp trade dress shares but one of these

elements, a beige background. As the evidence has shown, beige or tan

backgrounds are not at all unusual, particularly for rolling papers targeting the

“natural” segment of the rolling paper market. Moreover, OCB’s tan color is on

a distinctly burlap-looking background; the beige background on the RAW

packages is smooth.

Every other one of the identified distinctive elements of the RAW trade

dress is absent on the OCB trade dress. The introductory 99-cent OCB trade

dress has its “OCB” lettering in red, but it is not pitched at an angle, is a sans-

serif font, is not distressed, and bears a double-strike through the “C” that is

characteristic of many OCB brands world-wide, and does not resemble any

element of the RAW packaging. The full-priced package is even further from the

RAW look, with the “OCB” in what most any lay person would describe as

brown, not red.

“This circuit uses the following seven factors to determine

the likelihood of confusion: (1) the similarity between the marks in appearance

and suggestion; (2) the similarity of the products; (3) the area and manner of

concurrent use; (4) the degree of care likely to be exercised by consumers; (5)

the strength of the plaintiff's mark; (6) any evidence of actual confusion; and (7)

the intent of the defendant to ‘palm off’ his product as that of another. No

single factor is dispositive, but we have said that three are especially

important: the similarity of the marks, the intent of the defendant, and

evidence of actual confusion.” Sorensen v. WD-40 Co., 792 F.3d 712, 726 (7th

Cir. 2015).

Not only are the two products’ trade dresses quite dissimilar, HBI’s effort

to demonstrate actual confusion is second-hand and anecdotal (at best). Not a

single would-be purchaser (neither a consumer or reseller) testified of having

the slightest confusion between the competing products. And even the second-

hand evidence was not indicative of actual confusion, such as Mr. Colvard’s

mini-mart manager who already carried the RAW Organic Hemp product, and

decided to pick up a box of the OCB Organic Hemp at a “cash-and-carry”

because he thought it looked similar and wanted to give it a try. This actually

constitutes affirmative evidence of non-confusion; he knew it was a distinct

product (he already carried the RAW), and wanted to try it. That’s not

confusion; it’s competition.

A reasonable jury would not have a legally sufficient evidentiary basis to

find for HBI on trade dress infringement. Judgment on trade dress

infringement should be entered in Republic’s favor.

II. COPYRIGHT

A. NO INFRINGEMENT

As with the trade dress claims, Republic’s products and marketing

materials are so completely different from HBI’s that no inference of copying is

permissible on this record.

HBI has not even identified any protected expression in its claimed

copyrights. To the extent there is anything in HBI’s works that even

conceivably meets the “minimal degree of creativity” threshold to set them

apart from the hundreds of other rolling papers sold in rectangular booklets

and their marketing materials, there is no evidence that Republic has copied it

B. NO DISGORGEMENT

Even if any portion of HBI’s copyright infringement were to go to the jury,

the issue of disgorgement of profits should not. Disgorgement of profits from

sales of an infringing good may be available for a copyright claim, but where, as

here, the copyright is allegedly being infringed to sell something distinct from

the copyrighted work itself, the claimant (here HBI) has a burden to

demonstrate how much of the infringer’s profits came about as a result of the

alleged infringement. See Taylor v. Meirick, 712 F.2d 1112, 1122 (7th Cir. 1983)

(“If General Motors were to steal your copyright and put it in a sales brochure,

you could not just put a copy of General Motors’ corporate income tax return in

the record and rest your case for an award of an infringer’s profits”). A case

where an accused copyright infringer “did not sell the copyrighted work, but

used the copyrighted work to sell another product” is an “[i]ndirect profit case.”

Bergt v. McDougal Littell, 661 F. Supp. 2d 9116, 927 (N.D. Ill. 2009). “A plaintiff

cannot simply presume that the sales of a defendant’s products are due to

copyright infringement.” Fox Controls, Inc. v. Honeywell, Inc., No. 02 C 346,

2005 WL 1605832, *8 (N.D. Ill. July 14, 2005) (Honeywell used plaintiff’s

copyrighted training manuals; where plaintiff “fail[ed] to present any basis

upon which to conclude that Honeywell derived any profit from the use of

plaintiff’s works, much less any particular amounts,” plaintiff’s evidence was

“insufficient to create a triable issue of fact”).

HBI has not met its burden. Its damages expert, Mr. Burns, attempted to

apportion the profits earned by HBI to each assertedly false advertising claim,

but neither he nor any other witness even attempted to ascertain or

demonstrate what portion of Republic’s profits on OCB Organic Hemp rolling

papers are related to the alleged infringement of HBI’s copyrights. This is a

complete absence of proof, and the jury has been provided no basis for

evaluating the issue, and thus it should not go to the jury.

Dated: June 22, 2021 Respectfully submitted,

REPUBLIC TECHNOLOGIES (NA), LLC,

REPUBLIC TOBACCO, L.P.,

By: /s/ Peter S. Roeser

One of their attorneys

Charles S. Bergen

Peter S. Roeser

Matthew D. Tanner

ROESER TANNER & GRAHAM LLC

Two North Riverside Plaza, Suite 1850

Chicago, IL 60606

(312) 300-2525

CERTIFICATE OF SERVICE

I hereby certify that on June 22, 2021, the above and foregoing was filed

electronically with the Clerk of the Court using the CM/ECF system, which sent

notification to all ECF registrants that are counsel of record for this matter

/s/ Peter S. Roeser