Judge slashes damages in Toyo-Atturo 'trade-dress' lawsuit

ELK GROVE VILLAGE, Ill.—A federal judge in Illinois has voided most of $110 million in damages awarded Atturo Tire Corp. last year in a protracted legal battle with Toyo Tire Corp., but kept in place judgments totaling $10.1 million in compensatory and punitive damages.

Toyo and Toyo Tire U.S.A. Corp. have filed their intention to appeal the decision handed down May 10 by U.S. District Judge Mary Rowland of the U.S. District Court for the Northern District of Illinois.

Rowland's ruling was based on post-trial rulings filed by both parties following an October 2021 jury trial that ruled in favor of Atturo in a patent infringement and business defamation suit that dates to 2014.

The case centered originally on whether Atturo's Trail Blade M/T tire infringed on the "trade dress" rights Toyo claimed for its Open Country M/T tire line. Trade dress is defined as the "design or packaging of a product that is so distinctive as to identify the manufacturer or source."

The dispute dates back to 2013, when Toyo filed a complaint with the U.S. International Trade Commission (ITC) against 22 manufacturers, importers and sellers of passenger and light truck tires, alleging they had engaged in unfair trade practices by importing into or selling in the U.S. tires that infringed on eight U.S. design patents held by Toyo.

In the new ruling, Rowland ruled in Toyo's favor on four of the seven counts—tortious interference with contract, defamation, violations of the Illinois Deceptive Trade Practices Act and the Lanham Act—and deemed the $100 million in punitive damages to be "extreme and excessive" and reduced them to $100,000.

Rowland ruled in Atturo's favor on three counts—tortious interference with prospective business expectancy, unfair competition and unjust enrichment—and let stand $10 million in compensatory damages.

In response to the ruling, Atturo said it is "gratified that our jury trial victory against Toyo has been confirmed by the district court. Atturo was awarded substantial damages as a result of the wrongful acts committed against Atturo by Toyo."

Atturo went on to say Rowland's ruling confirmed "Toyo's conduct was wrongful, deceptive, and violated principles of commercial morality, justice, equity, and good conscience."

Regarding the judge's ruling on the punitive damages, Atturo said this will be "an issue for appeal" and it looks forward to the conclusion of this case as it moves through the appeal process.

"Toyo Tire agrees with the Court that the jury’s punitive damage award was excessive. However, it is our position that any award of punitive damages is unsupported by the law or facts and that it should be completely overturned," Toyo said in a statement.

“We also respectfully disagree with the Court’s decision to uphold the jury’s verdict for compensatory damages. The evidence and testimony clearly demonstrate that Toyo Tire acted within the bounds of the law," the company continued. "We remain confident in our position and look forward to appealing this verdict, as well as the Court’s earlier ruling dismissing our claim that Atturo violated Toyo Tire’s intellectual property rights."