CHICAGO—A federal court jury in Chicago has awarded private-brand tire marketer Atturo Tire Corp. $110 million in compensatory and punitive damages from Toyo Tire U.S.A. Corp. in a seven-year-old tread design infringement case that turned into a case of unfair trade practices.
The jury's award is still subject to review by the presiding judge in the case, Mary M. Rowland, with post-trial motions for judgment due from both parties over the coming eight to 10 weeks. The judge's final determination likely will come in late December or early January 2022.
After a five-day trial in late September at the Federal District Court for the Northern District of Illinois, the jury found Toyo Tire Corp. and Toyo Tire U.S.A. liable for unfair competition, defamation, unjust enrichment, deceptive trade practices and tortious interference with Atturo's business.
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 and/or selling in the U.S. tires that infringed eight U.S. design patents held by Toyo.
Atturo was not one of the 22 companies identified in the ITC complaint, but as some of these companies began to settle the complaint with Toyo—15 companies settled with Toyo out of court in early 2014 and the ITC issued limited exclusion and cease-and-desist orders in August 2014 against eight other U.S.-based tire importers/distributors—Atturo became aware that some of the settlements distributors were signing included references to its Trail Blade line and included provisions barring said companies from selling the Atturo product.
Toyo followed by up by filing suit in January 2014 against Atturo and Svizz One Corp. Ltd. (the tire's manufacturer of record), Vittore Wheel & Tire and RTM Wheel & Tire, claiming Atturo's Trail Blade M/T tire and Svizz One's Thunderer M/T R405 violated Toyo's patent on the tread design of its Open Country M/T tire line.
Distributors Vittore Wheel and RTM Wheel were removed as defendants in 2014.
In its suit against Atturo, Toyo argued that it has a "protectable trade dress in the overall appearance" of its Open Country M/T tires, introduced in 2003 and described as a "premium off-road maximum traction tire that combines solid on-road performance with extra ground clearance and higher load-carrying capacity and, for truck enthusiasts, a tread pattern with an aggressive appearance."
It also argued that "to any ordinary observer, and to off-road tire customers and members of the industry, the 'look' of the Atturo Trail Blade M/T tire is confusingly similar to the OPMT Trade Dress and, in particular, the ornamental, distinctive 'look' of the Toyo Open Country M/T tire."
Over the intervening years since the original filing, Atturo succeeded in getting the court to sanction Toyo on a number of occasions and to have testimony from Toyo expert witnesses excluded because it did not adhere strictly to the trade-dress issues.
In early 2021, Rowland issued two separate orders granting Atturo summary judgment and denying Toyo's motion to dismiss Atturo's counterclaims.
Once the court had ruled that Toyo's claims against Atturo had to be based on a three-dimensional trade-dress definition that Toyo had introduced during fact discovery, Atturo requested and was granted a ruling that it was not liable for trade-dress infringement under the Lanham Act or for violating the Illinois Deceptive Trade Practices Act.
Once this issue was settled, Atturo was able to proceed with its counterclaim that Toyo had interfered with Atturo's business.
In its counter to Toyo's suit and during trial, Atturo alleged that Toyo "surreptitiously asserted to Atturo's customers and prospective customers that Atturo's Trail Blade M/T infringes Toyo's alleged 'trade dress rights' in its Open Country M/T tread design," even though Atturo and the Trail Blade M/T were not cited in the ITC complaint.
"Toyo's conduct with respect to Atturo constitutes an unlawful campaign of tortious interference and defamation directed toward Atturo and its commercially successful Atturo Trail Blade M/T tire," Atturo stated in its rebuttal to Toyo's suit.
Atturo went on to claim that Toyo's "tortious interference" caused a number of its major customer to stop carrying the Trail Blade M/T, resulting in irreparable harm and "substantial loss of goodwill and reputation" unless Toyo was enjoined by the court.
Atturo also claimed Toyo had defamed Atturo, engaged in unfair competition, reaped "unjust enrichment," and violated the Uniform Deceptive Trade Practices Act.
Atturo sought monetary relief in an amount to be determined by the court, including: profits received by Toyo from sales and revenues of any kind made as a result of its unlawful actions; damages sustained by Atturo as a result of Toyo's unlawful actions, and that such damages be trebled; and punitive damages.
In reaching its verdict, the jury—according to Ackerman L.L.P., Atturo Tire's legal representation—found Toyo Tire Corp. and Toyo U.S.A. Corp. liable for unfair competition, defamation, unjust enrichment, deceptive trade practices and tortious interference with Atturo's business.
During the trial, Atturo's legal team presented material that it purported to show that Toyo had misrepresented to Atturo's existing and prospective customers and manufacturing partners that Toyo owned and Atturo infringed a trade dress right in Toyo's Open Country M/T tire.
The jury awarded Atturo $10 million in compensatory damages and $100 million in punitive damages.
In a prepared statement, Atturo said:
"Atturo Tire has fought against Toyo's unjust actions for nearly eight years. We are gratified that the jury recognized what Toyo did was wrong and held them accountable. We look forward to concluding this case and continuing to build the Atturo brand."
Toyo, in its own statement, said:
"Toyo Tire is disappointed and respectfully disagrees with the jury's verdict in this trial. We remain confident in our position and look forward to receiving the judge's final ruling. At this time, we are unable to comment further on this matter."
According to the court docket, Toyo has until Oct. 25 to file a post-trial brief outlining any legal issues it has with the verdict. Atturo then has until Nov. 24 to file its brief, and Toyo will have until Dec. 17 to file a reply brief to Atturo's filing.
The court will then issue a final ruling.