The opinion of the court was delivered by: CHARLES KOCORAS, District Judge
This matter comes before the court on five post-trial motions
filed by Defendant-Counterplaintiff Cigarettes Cheaper! ("CC")
and two motions filed by Plaintiff-Counterdefendant R.J. Reynolds
Tobacco Company ("RJR"). For the reasons set forth below, CC's motions are denied. RJR's motion for summary judgment
is denied and its motion in limine to bar John Roscoe's damages
testimony is granted in part and denied in part.
The factual and procedural history of this case is extensive,
tortuous, and set forth in previously rendered opinions, so we
only briefly recap the highlights. RJR is a tobacco company that
manufactures Camel, Winston, and Salem cigarettes. CC is a
discount cigarette retailer owned and operated by John Roscoe and
his family. At the time pertinent to this case, RJR produced
Camels, Winstons, and Salems for the U.S. domestic market as well
as other markets overseas, in duty-free shops, and on U.S.
military bases. The parties have debated the proper moniker for
the latter category of products; for simplicity's sake, we will
refer to them as "parallel." In the late 1990s, CC began
purchasing parallel market cigarettes and selling them at its
stores within the domestic market. RJR filed suit in 1999,
alleging that CC's practices amounted to unfair competition,
including infringement and dilution of the Camel, Winston, and
In response to RJR's complaint, CC launched a counterclaim,
alleging that RJR had engaged in antitrust activities by denying
CC favorable treatment that RJR had given to its competitors.
After a considerable pretrial period and plentiful motion practice, the parties went to trial for the first time in January
2004 on both the trademark and antitrust claims. A mistrial was
declared, but not before this court ruled on several motions in
limine. Shortly thereafter, RJR filed a motion for summary
judgment on CC's counterclaims. This ruling considers that motion
as well as a motion in limine pertaining to the antitrust claims.
Before the second trial commenced, we severed the trademark and
antitrust claims. The trademark portion went to trial in April
2004 and resulted in a verdict in RJR's favor on all counts.
Finding that CC had profited from the cigarette sales to the tune
of $3,560,002, the jury awarded RJR that amount. CC's five
motions all challenge different aspects of this outcome.
A. CC's Motions for Judgment as a Matter of Law
CC moves for judgment as a matter of law on all of RJR's
claims*fn1 and separately for judgment as a matter of law on
the issues of trademark dilution and willfulness. In considering
these motions, we must view the evidence in the light most
favorable to RJR, drawing all reasonable inferences in its favor.
David v. Caterpillar, 324 F.3d 851, 858 (7th Cir. 2003). We cannot second-guess the jury's view of
evidence that was contested; instead, we must ask whether, within
the totality of the evidence, there is sufficient support for a
reasonable jury to find for RJR. Id.
1. The "Genuineness" of the Parallel Product
CC first insists that RJR could not have shown infringement of
its trademarks because the parallel market cigarettes were
manufactured by RJR. Relying on the Ninth Circuit's decision in
NEC Elec. v. CAL Circuit Abco, CC claims that this made the
cigarettes "genuine goods bearing a true mark," which cannot be
infringing. 810 F.2d 1506, 1509 (9th Cir. 1987).
CC's argument fails for two reasons. First, as we explained in
our June 30, 1999, denial of CC's motion to dismiss the original
complaint, we are convinced that the applicable rationale for
this case is supplied by two cases from the D.C. Circuit. See
Lever Bros. Co. v. U.S., 981 F.2d 1330 (D.C. Cir. 1993)
("Lever II"); Lever Bros. Co. v. U.S., 877 F.2d 101 (D.C.
Cir. 1989) ("Lever I"). The Lever cases held that goods
intended for foreign sale that are physically different from
those sold within the United States are not genuine goods from
the perspective of American consumers; as a result, their sale
can violate the provisions of the Lanham Act. See Lever II,
981 F.2d at 1338; Lever I, 877 F.2d at 111. RJR produced
evidence as to each brand that physical differences were present
between domestic and parallel cigarettes. For example, parallel Camels and Winstons lacked loyalty program
materials, parallel cigarette packages indicated that the product
they contained was tax-exempt and not for sale within the United
States, and parallel cigarette packaging differed in color and
style from its domestic counterpart. Thus, the fact that RJR
manufactured the parallel product does not mandate judgment for
Second, even if we were to follow the Ninth Circuit's lead on
the issue of when goods are "genuine," we are not persuaded that
the NEC court's reasoning would result in a victory for CC. In
NEC, a foreign manufacturer attempted to make its U.S.
subsidiary the exclusive source of NEC goods within the United
States. When an importer bought NEC products overseas and resold
them in this country in direct competition with NEC's subsidiary,
the foreign parent brought suit under U.S. trademark law. Thus,
the parent had no quarrel with the sale of its products within
the United States, as long as the product came only from its
affiliate. The Ninth Circuit found this activity an attempt to
artificially insulate the market to the detriment of American
consumers, as evidenced by the court's stinging rebuke of the
trademark holder and its parent company at the close of the
opinion. Id. at 1511. As a result of the tactic of limiting
consumer choices by invoking a law intended to foster honest
competition, the equities in NEC clearly weighed against the
trademark holder. In this case, by contrast, RJR manufactured parallel product
exclusively for non-domestic markets and made no attempt to
reintroduce the goods into the domestic market through an
exclusive source. This difference distinguishes NEC and
bolsters our conviction that the ...