Top Tobacco, L.P. v. Midwestern Cash & Carry, LLC

Uncontroverted sale of counterfeit trademarked articles alone established infringement against corporate defendants but, without proof of willfulness on the part of individuals, did not establish infringement against individually named defendants.

Opinion (Valdez): Midwestern Cash and Carry, LLC ("MCC") is a wholesaler of groceries and tobacco products. Top Tobacco, L.P. ("Top") sells tobacco and roll-your-own cigarettes. On October 15, 2010, investigators purchased what purported to be Top rolling papers from four gas stations supplied by MCC. Tests of the papers revealed them to be counterfeit. In April 2011, Top followed up on its investigation by purchasing cases of “Top” brand papers directly from MCC. Of the four cases bought from MCC, three of them were counterfeit. Top filed suit against MCC, the four gas stations supplied with counterfeit papers by MCC, and owner-operators of the gas stations. Top alleged eight causes of action grounded in trademark infringement as well as trademark dilution. Both parties filed cross motions for summary judgment. The court held that, as for the corporate defendants, there was no genuine disagreement that Top owned protected trademarks and that the corporate defendants used in commerce a counterfeit of the registered mark. The court therefore GRANTED Top’s motion for summary judgment on the infringement claims. As for Top’s claims against the owner-operators, the court found that there was an issue of material fact as to whether the individual defendants had wilfully participated in the infringement. The court also found that whether Top's federal word and design marks ("TOP marks") were famous marks was an issue of material fact bearing on the claim for dilution. The court, therefore, DENIED both parties’ motions for summary judgment on the dilution claims and the claims against individual defendants.