Irreparable Harm in Trademark and Copyright Cases: Presumption or Proof? | Practical Law

Irreparable Harm in Trademark and Copyright Cases: Presumption or Proof? | Practical Law

A discussion of the status of the presumption of irreparable harm when assessing injunctive relief in trademark and copyright cases after the US Supreme Court's decision in eBay, Inc. v. MercExchange, L.L.C., and the evidence that courts will accept as proof of irreparable harm when the presumption does not apply.

Irreparable Harm in Trademark and Copyright Cases: Presumption or Proof?

Practical Law Legal Update w-001-3552 (Approx. 4 pages)

Irreparable Harm in Trademark and Copyright Cases: Presumption or Proof?

by Practical Law Intellectual Property & Technology
Published on 25 Jan 2016 • USA (National/Federal)
A discussion of the status of the presumption of irreparable harm when assessing injunctive relief in trademark and copyright cases after the US Supreme Court's decision in eBay, Inc. v. MercExchange, L.L.C., and the evidence that courts will accept as proof of irreparable harm when the presumption does not apply.
In eBay Inc. v. MercExchange, L.L.C., the US Supreme Court rejected automatic injunctions on proof of patent infringement, holding that categorical rules and broad classifications are inconsistent with equitable principles (547 U.S. 388, 393 (2006)). Following eBay, courts also rejected the presumption of irreparable harm that applied when a patent owner demonstrated infringement (or a likelihood of success in a preliminary injunction motion) (see, for example, Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1148-50 (Fed. Cir. 2011)). A patent owner seeking injunctive relief against an infringer now must meet the traditional four-factor test for injunctive relief and prove:
  • It has suffered an irreparable injury.
  • Legal remedies, such as monetary damages, are inadequate to compensate for the injury.
  • The balance of the hardships between the parties support an injunction.
  • The public interest is not disserved by an injunction.
(eBay, 547 U.S. at 391.)
Less consistent are the cases assessing whether the long-recognized presumptions of irreparable harm in trademark and copyright infringement cases have survived eBay. As plaintiffs almost always seek injunctive relief in trademark and copyright actions, at the outset of a case, counsel should determine:
  • Whether the applicable jurisdiction retains the presumption of irreparable harm on proof of infringement (or likelihood of success on a preliminary injunction motion).
  • If courts in the jurisdiction have rejected the presumption, what evidence the court may accept as proof of irreparable harm.

Irreparable Harm in Trademark Cases

Despite the parallels between patent law and trademark law, many courts have been reluctant to apply eBay and eliminate the presumption of irreparable harm in trademark infringement actions. However, the cases are inconsistent, as courts have:
  • Applied eBay and rejected the presumption.
  • Distinguished eBay and retained the presumption.
  • Avoided the issue by finding irreparable harm regardless of the application of a presumption.
Even when the presumption does not apply, courts generally find irreparable harm if a plaintiff proves an ongoing trademark infringement (or a likelihood of success in a preliminary injunction motion to stop an ongoing infringement). Perhaps the most common basis for finding irreparable harm is the plaintiff's loss of control of its brand and goodwill, which many courts equate with irreparable harm. Other evidence that courts have accepted as proof of irreparable harm include proof that:
  • The defendant's infringement is harming plaintiff's reputation.
  • The plaintiff is losing customers to the defendant.
  • Consumers have actually been confused.
  • The defendant's goods or services are inferior to plaintiff's goods or services.
  • The universe of potential consumers is small.
For more information on injunctive relief in trademark infringement cases, including the courts that have applied and distinguished eBay in the trademark context and the evidence that courts have accepted as supporting irreparable harm, see Practice Note, Trademark Litigation: Injunctive Relief.

Irreparable Harm in Copyright Cases

Some courts have rejected the application of eBay to copyright actions, or have failed to consider the impact of the Supreme Court's decision. However, the recent trend, including in major circuits with well-developed copyright precedent like the US Courts of Appeals for the Second and Ninth Circuits, favors rejecting the presumption and applying the four-factor test set out in eBay to requests for injunctive relief in copyright cases.
Even without the presumption, in most copyright infringement cases counsel can find evidence to support and grounds to argue irreparable harm. Courts have found irreparable harm in cases where the plaintiff has proven that:
  • Plaintiff has suffered a loss that is difficult to compensate or measure.
  • Plaintiff has a limited time period to exploit its work or is experiencing other market disadvantages.
  • Plaintiff has lost the ability to control its copyrights.
  • Defendant's copyright infringement is harming plaintiff's reputation or brand.
  • Defendant's infringement interferes with plaintiff's exclusive license agreements.
For more information on injunctive relief in copyright infringement cases, including the courts that have rejected the presumption of irreparable harm and the evidence that courts have accepted as supporting a finding of irreparable harm, see Practice Note, Copyright Litigation: Injunctive Relief.
For more information about injunctive relief in patent infringement cases, see Practice Note, Patent Litigation: Preliminary Injunction Considerations and Practice Note, Patent Infringement Claims and Defenses: Injunctive Relief.