Expanding “Consumer” in Lanham Act False Advertising & Reinforcing Trade Dress Protections: Republic Technologies v. BBK Tobacco & Foods

Introduction

In Republic Technologies (NA), LLC v. BBK Tobacco & Foods, LLP, the Seventh Circuit addressed two discrete but significant issues under the federal Lanham Act and Illinois unfair competition law: (1) whether misleading statements to commercial intermediaries (e.g., distributors, wholesalers) qualify as “false advertising” when they influence purchase decisions, and (2) the sufficiency of evidence supporting a jury’s verdict finding that trade dress for “OCB” rolling papers infringed on the trade dress for “RAW” rolling papers. The parties are direct competitors in the niche market for organic hemp cigarette rolling papers—Republic Technologies manufactures and markets “OCB” brand papers, while BBK Tobacco & Foods (HBI) markets “RAW” branded papers sourced from Spain. Following a 2021 jury trial in the Northern District of Illinois, the district court imposed a permanent injunction curbing several of HBI’s advertising practices. Both sides appealed, challenging the district court’s jury‐instruction choice, the jury’s trade dress infringement finding, and the injunction’s scope and clarity.

Summary of the Judgment

The Seventh Circuit affirmed the district court’s decision to refer the jury back to its original instructions instead of issuing a supplemental explanation of “consumer” under the Lanham Act.
The court held that there was sufficient evidence for a reasonable jury to find that Republic’s red‐letter “99¢” OCB packaging created a likelihood of confusion with HBI’s RAW trade dress, and thus affirmed denial of Republic’s Rule 50 motion.
The court upheld the district court’s permanent injunction against HBI’s false and misleading advertising, ruling that (a) the injunction’s terms were sufficiently specific under Fed. R. Civ. P. 65(d) despite requiring objective verification of factual claims, and (b) its nationwide scope was permissible because state consumer‐protection laws are substantially uniform in prohibiting false or deceptive trade practices.

Analysis

1. Precedents Cited

United States v. Funds in the Amount of $100,120, 901 F.3d 758 (7th Cir. 2018) – standard for reviewing jury‐question responses for abuse of discretion.
United States v. Durham, 645 F.3d 883 (7th Cir. 2011) – a judge need not over‐explain correct jury instructions; referring jury back to them is permissible.
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992) & Taco Cabana Int’l, Inc. v. Two Pesos, Inc., 932 F.2d 1113 (5th Cir. 1991) – trade dress infringement can exist despite different product names when the overall trade dress is confusingly similar.
Bodum USA, Inc. v. A Top New Casting, Inc., 927 F.3d 486 (7th Cir. 2019) – defining trade dress and the “likelihood of confusion” test.
Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985) – limits on applying one state’s law to nationwide class‐action royalty claims (not directly controlling here but instructive on comity concerns).
Scandia Down Corp. v. Euroquilt, Inc., 772 F.2d 1423 (7th Cir. 1985) – injunctions may use “imprecise standards” when necessary to curb misleading advertising.
Califano v. Yamasaki, 442 U.S. 682 (1979) – injunctions should be no broader than required for complete relief.

2. Legal Reasoning

a. Jury Instruction on “Consumer”

The Lanham Act requires proof that a deceptive advertisement “actually deceives or has the tendency to deceive” consumers and that the deception is “likely to influence the purchasing decisions of consumers.” The jury asked whether “consumer” includes intermediaries or only end‐users. The district court, bound by the parties’ agreed instruction, referred the jury back to the full charge rather than issuing a contested supplemental instruction. The Seventh Circuit held this was not an abuse of discretion because:

The original instruction correctly stated the law and used broad language (e.g., “HBI’s audience”) that encompassed intermediaries.
Referring the jury back to an agreed instruction avoids the risk of reversible error by a judge‐crafted answer.
Republic failed to demonstrate prejudice: even if the jury viewed “consumer” as end‐users only, Republic’s own evidence showed end‐users could be misled by HBI’s claims.

b. Sufficiency of Evidence on Trade Dress Infringement

Trade dress infringement under Section 43(a) of the Lanham Act is established by proving (1) protectible trade dress and (2) a likelihood of confusion. Seven factors guide the likelihood‐of‐confusion analysis:

Similarity of the marks
Similarity of the products
Area and manner of concurrent use
Degree of consumer care
Strength of plaintiﬀ’s mark
Evidence of actual confusion
Defendant’s intent to misappropriate source identification

Here, the jury heard testimony and viewed store‐shelf photographs showing overlapping design elements (distressed fonts, textured backgrounds, button icons, green accents) between OCB’s bright‐red “99¢” packaging and RAW’s red‐letter packaging. Surveys and retailer statements demonstrated actual confusion or inquiries. Although the brand names “OCB” and “RAW” are dissimilar, the Seventh Circuit held that brand‐name distinction goes to the weight of evidence, not its legal sufficiency, especially in light of Two Pesos (disparate names with confusingly similar décor). Weighing all factors in Republic’s favor, a reasonable jury could find a likelihood of confusion as to the 99¢ red‐letter package, so denial of judgment as a matter of law was affirmed.

c. Scope and Specificity of the Permanent Injunction

The district court enjoined HBI from making certain false or misleading claims (e.g., “world’s first organic hemp rolling paper,” “made using wind power,” etc.) and required that any future factual advertising be backed by “tangible, objective verification” or be clearly framed as opinion. HBI challenged the injunction as vague and overbroad under Fed. R. Civ. P. 65(d). The Seventh Circuit held:

The injunction’s command—“factual statements must be objectively verifiable or opinions”—tracks settled false‐advertising principles and is sufficiently definite. Courts routinely distinguish between verifiable facts and non‐actionable opinion in advertising law.
“Imprecise standards” are acceptable when the underlying wrongful conduct is inherently subtle (misleading implications). The requirement of objective verification is tailored to deter HBI’s demonstrated propensity for unsubstantiated claims.
A nationwide injunction is permissible because state laws uniformly prohibit false or deceptive trade practices; applying Illinois law across the United States does not conflict materially with any sister state’s standards. Injunctive relief need only be “no broader than necessary to provide complete relief,” which in this competitive marketplace spans all 50 states.

3. Potential Impact

Republic v. BBK clarifies three important points for future Lanham Act and trade dress litigation:

Courts have discretion to stick with agreed jury instructions and may refuse to spin out contested supplemental instructions if the original charge is legally correct and comprehensive.
Trade dress claims are fact‐intensive. Disparate brand names do not preclude a finding of confusion when overall packaging elements are substantially similar and actual confusion evidence exists.
Permanent injunctions in false advertising cases can require objective verification of factual claims and may run nationwide, provided the enjoined party competes across state lines and no material conflicts exist in state consumer‐protection laws.

Complex Concepts Simplified

Lanham Act False Advertising: An advertisement is “false” if it conveys a misleading impression—even if literally true—and actually deceives or tends to deceive consumers (including distributors). The deception must be material to purchase decisions.
Trade Dress: The “look and feel” of a product’s packaging or design that identifies its source. Trade dress is protected when it is nonfunctional, distinctive, and likely to confuse prospective buyers if imitated.
Likelihood of Confusion Factors: Seven non‐exclusive factors (similarity of marks, actual confusion, defendant’s intent, etc.) guide courts in trade dress disputes. No single factor is dispositive; courts assess them holistically.
Rule 65(d) Specificity Requirement: Injunctions must describe in “reasonable detail” the prohibited or required acts. They need not recite every legal nuance but must give fair notice of the scope of the order.
Nationwide Injunctions: When a defendant’s wrongful conduct is national in scope and state laws substantially align, courts may impose nationwide relief to ensure the plaintiff’s complete redress.

Conclusion

Republic Technologies v. BBK Tobacco & Foods cements important guidelines for Lanham Act practitioners and district courts. First, agreed jury instructions remain the safest path, and trial courts need not risk reversible error by crafting contested clarifications. Second, trade dress infringement verdicts will stand where a coherent body of evidence supports consumer confusion, even if product names differ. Finally, courts have broad equity power to craft specific, effective injunctions—requiring objective verification of factual claims—and to enforce them nationwide when the competitive marketplace transcends state borders. This decision thus strengthens brand‐protection tools and underscores the judiciary’s role in policing truthful commercial speech.