Seventh Circuit Affirms $1.9 Million in Damages for Trademark Infringement and Punitive Awards in “Diesel Test” Case

Curry v. Revolution Labs., LLC, Case No. 23-2850, 2024 U.S. App. LEXIS 32188 (7th Cir. Dec. 19, 2024)

The Seventh Circuit affirmed a $1.9 million judgment in favor of Charles Curry, Jr., the owner of “Diesel Test,” against Revolution Laboratories, LLC, for trademark infringement under the Lanham Act and Illinois common law. The court upheld a jury verdict that included punitive damages and disgorgement of profits, rejecting Revolution’s arguments that the awards were excessive or unconstitutional. This decision provides significant guidance on punitive damages in trademark cases, emphasizing factors like bad faith and financial disparities between parties.

Case Background

Charles Curry, a former competitive powerlifter and owner of Get Diesel Nutrition, began selling his “Diesel Test” testosterone-boosting supplement in 2005. In 2016, Revolution Laboratories launched a competing product under the same name despite knowing of Curry’s earlier use. Revolution ignored multiple cease-and-desist letters from Curry and continued selling its product, prompting Curry to sue for trademark infringement in 2017.

After a jury trial in 2023, Curry was awarded $2,500 in actual damages, $547,095.44 in disgorged profits, and $900,000 in punitive damages ($300,000 against each defendant). Revolution appealed, arguing that the punitive damages were unconstitutional and that Curry’s claims should not have been presented to a jury.

Seventh Circuit’s Analysis

Punitive Damages and Bad Faith Conduct
The court upheld the punitive damages, focusing on the “degree of reprehensibility” of Revolution’s conduct—a key factor under BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996). The court highlighted several factors that justified the punitive awards:

• Intentional Infringement: Revolution knowingly continued to sell its product under the infringing name after receiving cease-and-desist notices. Internal emails revealed the company’s strategy to “let him [Curry] sue us” while continuing sales.
• Financial Vulnerability: Curry, a small business owner who started his company by selling his home, lacked the resources to match Revolution’s financial capacity. This imbalance supported punitive damages as a deterrent.
• Repeated Violations: Even after Amazon removed Revolution’s “Diesel Test” listing in response to a counterfeit claim, Revolution continued selling the product on other platforms for years.

The court emphasized that punitive damages in trademark cases serve a dual purpose: punishing egregious conduct and deterring similar behavior in the future.

Proportionality of Punitive Damages
Revolution argued that the punitive damages were disproportionate to the harm suffered. The court disagreed, noting that the punitive damages (less than 1:1 compared to the $547,095.44 disgorgement award) were “easily permissible” under constitutional standards. The court reiterated that punitive damages may exceed compensatory damages in cases involving small compensatory awards or egregious conduct, citing State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003).

Disgorgement of Profits as a Proxy for Harm
Revolution challenged the inclusion of disgorged profits in the punitive damages ratio analysis. The court rejected this argument, holding that disgorged profits reflect the harm caused by the infringing activity and are a valid measure for proportionality under the Lanham Act.

Presentation of Punitive Damages to the Jury
Revolution also contended that the district court erred by allowing Curry to seek punitive damages despite his complaint’s lack of specificity. The Seventh Circuit rejected this claim, finding that Revolution had ample notice of Curry’s intent to seek punitive damages based on pretrial motions and discovery requests.

Key Takeaways

This decision reinforces the importance of deterring bad faith in trademark infringement cases and underscores courts’ willingness to impose punitive damages when defendants knowingly engage in infringing conduct. Key lessons include:

• Punitive Damages in Trademark Law: Egregious conduct, financial imbalances, and repeated violations can justify significant punitive awards, even when compensatory damages are small.
• Disgorgement Reflects Harm: Courts may consider disgorged profits as a proxy for harm in assessing proportionality under due process standards.
• Strategic Missteps Matter: Internal communications that reveal intent to disregard trademark rights can significantly impact damages assessments.

Conclusion

The Seventh Circuit’s ruling in Curry v. Revolution Labs., LLC illustrates the financial and reputational risks of willful trademark infringement. It underscores the importance of addressing trademark disputes proactively and the consequences of ignoring clear cease-and-desist notices.

To learn more about these issues, contact the author of this article, Arvind Jayakumar. Arvind is a brand protection attorney who counsels brands on how to prevent unfair competition, avoid unnecessary liability, and enforce their intellectual property rights. He has successfully litigated various commercial issues related to unfair competition, false advertising, trademark infringement, copyright infringement, breach of contract, and other business disputes. In addition to his litigation practice, Arvind boasts a robust trademark and copyright prosecution practice in which he helps brands register their intellectual property and secure IP rights.