Affirmation of Lanham Act Statutory Damages Within Congressional Range and Limits

Introduction

Top Tobacco, L.P., Republic Technologies (NA), LLC, and Republic Tobacco, L.P. (collectively “Republic”) sued Star Importers & Wholesalers, Inc. (“Star”) and its president Amin Hudda for distributing counterfeit TOP® and JOB® cigarette rolling papers in violation of the Lanham Act (15 U.S.C. §§ 1114, 1125(a), 1117(c)) and related Georgia statutes. After summary judgment on liability, a jury determined that Star’s infringement was not “willful” but awarded Republic $123,000 in statutory damages per counterfeit mark—well within the $1,000–$200,000 cap for nonwillful infringement set by § 1117(c)(1). Star moved for judgment as a matter of law or, in the alternative, for remittitur or a new trial, arguing that the damages award (1) bore no relationship to actual harm, (2) impermissibly included punitive or deterrent elements absent a finding of willfulness, and (3) violated due process. The Eleventh Circuit affirmed, holding that a within-range jury verdict under § 1117(c) is conclusive, that deterrence need not be tied to willfulness, and that statutory caps safeguard constitutional due process.

Summary of the Judgment

The district court granted summary judgment on liability for trademark infringement and counterfeiting against Star but not against Hudda personally.
At trial, the jury found no willfulness and awarded Republic $123,000 per mark (nine marks infringed; total $1,107,000). It also held Hudda personally liable.
Star’s post-verdict motion under Rule 50(b) was denied. Star appealed only the denial of its Rule 50(b) motion, forfeiting alternative challenges under Rule 59.
The Eleventh Circuit, reviewing de novo, affirmed. It held that:
- A within-range statutory damages verdict is lawful regardless of actual damages (Seventh Amendment protection; F. W. Woolworth Co. v. Contemporary Arts, 344 U.S. 228 (1952)).
- Deterrence as a factor does not require a finding of willfulness (15 U.S.C. § 1117(c) and jury instructions were correct and unobjected to).
- Due process is satisfied because Congress established a damages range and the award was neither extreme nor oppressive (St. Louis, Iron Mountain & Southern Ry. Co. v. Williams, 251 U.S. 63 (1919)).

Analysis

1. Precedents Cited

The court’s opinion draws on several landmark decisions and statutory provisions:

Lanham Act § 1117(c) (15 U.S.C. § 1117(c)): Establishes a statutory damages range of $1,000–$200,000 per counterfeit mark for nonwillful infringement, rising to $2,000,000 per mark for willful infringement.
F. W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228 (1952): Held that statutory damages must fall between the Congressional minimum and maximum; once inside that bracket, courts exercise broad discretion.
Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (1998): Recognized the jury’s role in determining statutory damages in copyright cases under the Seventh Amendment—extended by analogy to trademark cases.
Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829 (11th Cir. 1990): Affirmed wide discretion in awarding statutory damages under the Copyright Act, bounded only by statute, and endorsed deterrence as a factor for punitive effect.
St. Louis, Iron Mountain & Southern Ry. Co. v. Williams, 251 U.S. 63 (1919): Held that a statutory penalty is unconstitutional only if so “severe and oppressive” as to be “wholly disproportioned to the offense.”
In re Egidi, 571 F.3d 1156 (11th Cir. 2009): Requires issues to be raised in initial briefs or else forfeited.

2. Legal Reasoning

The Eleventh Circuit’s reasoning can be distilled into three pillars:

Statutory Range Trumps Actual Damages. Congress empowered plaintiffs to elect statutory damages “instead of actual damages and profits.” Once a jury verdict falls within the statutory floor and ceiling, it is legally binding—even if it exceeds the evidence of actual harm. This rule preserves both constitutional jury rights (Seventh Amendment) and statutory objectives.
Deterrence Is Always a Valid Factor. The Lanham Act and jury instructions listed deterrence among nonexclusive factors. Contrary to Star’s argument, deterrence need not await a willfulness finding. The jury may consider brand value, enforcement costs, public safety risks, and the need to discourage future infringement, regardless of willfulness.
Due Process Boundaries Are Respected by Statutory Caps. A within-range award cannot be “so severe and oppressive” as to violate due process when Congress has already balanced compensatory and punitive aims in the statutory scheme. The maximum ratio in this case—$123,000 per mark versus up to $200,000 allowed—falls well below any constitutional threshold.

3. Impact on Future Cases and Trademark Law

This decision reinforces a uniform national approach to statutory damages under the Lanham Act:

District courts cannot unilaterally reduce a jury’s within-range statutory damages verdict on the ground that it exceeds actual damages. Parties must request remittitur or new trial under Rule 59—and preserve those arguments on appeal.
Litigants and juries have clear guidance that deterrence and brand-protection considerations remain valid, even where willfulness is absent.
Statutory caps themselves serve as a constitutionally sufficient check on excessive awards, minimizing due process challenges to statutory damages.

Complex Concepts Simplified

Statutory vs. Actual Damages: Plaintiffs can choose a fixed, formulaic award (statutory) rather than proving real-world loss (actual). This eases litigation when harm is hard to quantify.
Willfulness: A defendant “willfully” infringes when it knowingly or recklessly violates a trademark. Statutory damages double for willful misconduct, but nonwillful infringement still allows recovery up to a statutory maximum.
Remittitur vs. Rule 50(b): A Rule 50(b) motion argues insufficient evidence to support a verdict; remittitur (Rule 59) asks the court to reduce an excessive damages award. Star forfeited remittitur by not appealing its denial.
Due Process and Judicial Review: The Fifth Amendment prohibits grossly unfair punishments by the federal government. Congress’ preset statutory range ensures that courts and juries stay within constitutional boundaries.

Conclusion

The Eleventh Circuit’s decision in Top Tobacco, L.P. v. Star Importers & Wholesalers, Inc. cements two key principles: (1) a jury’s within-range statutory damages verdict under the Lanham Act is conclusive and cannot be reduced based on actual harm once that range is set by Congress; and (2) factors such as deterrence, brand value, and public safety may be weighed even if no willfulness is found. Together, these holdings clarify the interplay between statutory design, jury fact-finding rights, and constitutional limits—providing predictability for trademark owners and alleged infringers alike.