Here’s the press release in full and we are hoping we can get RAW CEO Josh Kesselman to pop onto the Karma Koala Podcast to discuss in detail.
NEW YORK–(BUSINESS WIRE)–RAW (BBK/HBI), the independent global brand of high-quality rolling papers and smoking innovations, today issued a statement about the final resolution of the seven-year court battle with Republic Tobacco which had brought a series of lawsuits against HBI International, the company that owns the RAW brand.
“At RAW we believe in justice and that the truth will eventually prevail”
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The judge rejected Republic’s monetary demands, saying in an April 2023 decision, “Republic requests the disgorgement of every cent of profit from HBI’s RAW brand during that time period… This extraordinary request, however, is not supported by adequate evidence, nor is it appropriate considering the other factors of the case.”
“Today we are happy to be done with this time-consuming lawsuit,” Josh Kesselman, RAW’s Founder said. “Ultimately, we are pleased with the outcome, but that doesn’t make this any less frustrating.”
The Judgment entered in the matter on June 5, 2023 makes final the jury’s determination after a multi-week trial that Republic Tobacco willfully infringed on RAW’s copyright and trade dress, and awarded to HBI damages of more than $1 million. Including a prejudgment interest award, the Court has found Republic must pay RAW nearly $1.5 million in total compensation. Today’s conclusion came after both sides agreed on legal fees that RAW will pay to Republic based on only one of Republic’s multitude of claims.
“Republic has persistently filed lawsuit after lawsuit against our company, perhaps because of our success,” continued Kesselman. “We intend to donate the net proceeds we will receive, now that this case is resolved, to organizations working to help small businesses in the cannabis field, particularly businesses that are startups involving individuals who were previously convicted of nonviolent cannabis related crimes. We’re hopeful that Republic will now cease its relentless effort to destroy our business and focus, like us, on helping the emerging cannabis industry achieve greater equity in the marketplace.”
The case had dragged on for seven years and involved simultaneous claims on state and federal issues, with U.S. District Judge Thomas M. Durkin presiding. The June 2023 Judgment makes clear that Republic Tobacco was not entitled to either damages nor disgorgement of profits. That result comes even though a jury had previously found RAW had engaged in unfair trade practices under Illinois state law. The jury also found the same claims did not violate federal law.
“At RAW we believe in justice and that the truth will eventually prevail,” said Kesselman. “We never believed we did anything wrong so the fact that no damages were awarded speaks volumes.”
“I first encountered Don Levin’s Republic Tobacco more than 30 years ago when I started a tiny smoke shop. Since then, Republic has sued me three times, claiming tens of millions in alleged damages. RAW is still here, despite Republic’s lawsuits. At RAW, we believe business competition is best conducted in the marketplace, rather than in the courts,” Kesselman said.
2016 Case a Result of Republic’s Violation of Trademark and Copyright
This latest case began in 2016 when RAW contacted Republic to point out the similarity between RAW’s distinctive Organic Hemp product packaging and Republic’s OCB Organic Hemp paper packaging.
The RAW brand of rolling papers, pre-rolled cones, and related accessories has a consistent look across products and is among the most ubiquitously popular with consumers. In 2009, RAW launched its RAW Organic Hemp line of products. In 2011, Republic Tobacco introduced in Europe a product, OCB Organic Hemp, which RAW (and HBI International, the company that owns the brand) believed looked remarkably like its RAW Organic Hemp product. Republic also created merchandising that RAW believed infringed its copyrighted design.
Republic introduced the OCB Organic Hemp product in the U.S. in 2014 and HBI reached out to Republic about the similarity soon after. RAW only asked for the companies to discuss the matter, but Republic responded by suing RAW in federal court in Illinois, seeking a declaratory judgment saying it had not infringed on anything. RAW counterclaimed for infringement, and then Republic brought a series of allegations that RAW had made misstatements on its products and marketing materials and that RAW was illegal marijuana paraphernalia.
Republic alleged that RAW papers and all cones were illegal products because of their association with cannabis and celebrity smokers including Wiz Khalifa and Miley Cyrus (a claim that did not survive to trial), false advertising under the federal Lanham Act, and deceptive trade practices and unfair competition under Illinois state law. After five years of discovery, the remaining claims were tried before a jury, with U.S. District Judge Durkin presiding over both the federal and state claims.
2021 Jury Verdict
After a multi-week trial, the jury concluded that Republic had willfully infringed RAW Organic Hemp’s trade dress with Republic’s 99-cent version of its OCB organic hemp product, and that Republic had willfully infringed RAW’s copyrighted “Sold Here” sign. The term “trade dress” refers to the general appearance of a product or its packaging. The jury awarded over $1 million in damages to RAW in June 2021. And the Court later awarded RAW prejudgment interest which brings the total award to nearly $1.5 million.
The jury also found that none of RAW’s product statements violated the federal Lanham Act. But, the jury simultaneously found for Republic on the Illinois Deceptive Trade Practices Act and the claim for unfair competition based on the same factual allegations.
Kesselman said he hopes this decision will end Republic’s decades-long litigation campaign. “It’s an extreme but familiar business strategy – sue the competition. They’ve filed hundreds of other lawsuits against other competitors and customers. Thankfully, with the continued support of our customers, we are successful enough to afford to fight off these claims and shine a critical light on Republic’s business practices. We should compete in innovation, not litigation. We are NEVER GOING TO SELL OUT TO REPUBLIC.”
Sean Hocking
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