Since the Supreme Court’s decision in eBay v. Merc-Exchange, IP plaintiffs who plan on relying on the presumption of irreparable harm when seeking injunctive relief (whether a TRO, preliminary or permanent) may want to rethink that strategy.  The days of relying on a general "presumption" of irreparable harm, without actual proof of such harm, are essentially over—at least for cases that fall squarely within the eBay decision (i.e., patent infringement cases where injunctions are sought).  Less clear is eBay‘s holding to other traditional areas of intellectual property, like trademark and copyright infringement cases.  Nevertheless, the vigilant IP owner should be prepared to prove irreparable harm by way of compelling evidence.  Even if the court ultimately applies the presumption of irreparable harm, the effort will certainly pay off and may preclude attacks on appeal.

How did we get to this point?  Since eBay, it seems fairly settled that courts will not presume irreparable harm when reviewing requests for injunctive relief in patent infringement cases.  But there is a relative dearth of controlling case law in copyright and trademark infringement cases.  Presently, the Fourth Circuit is the only circuit that has affirmatively applied eBay to copyright infringement cases where injunctive relief is sought.  In Christopher Phelps & Associates LLC v. Galloway, the Fourth Circuit held that a copyright plaintiff is not automatically entitled to injunctive relief merely by a showing of infringement and the threat of continuing infringement.  Christopher Phelps & Associates LLC v. Galloway, 492 F.3d 532, 544 (4th Cir. 2007).  Citing eBay, the court held that a copyright plaintiff must put forth sufficient evidence that:  (i) the plaintiff has suffered irreparable injury; (ii) the remedies available at law are inadequate to compensate for injury; (iii) the balance of hardships favors remedy in equity; and (iv) the public interest would not be disserved by permanent injunction.  Id.  The Fourth Circuit also cautioned that, even upon this showing, whether to grant an injunction remains within the “equitable discretion” of the court.

No other circuit has applied eBay in such a direct and unambiguous fashion to copyright or trademark infringement cases.  But some circuits certainly have nibbled around the edges.  As reported earlier on this blog, the Supreme Court, Ninth Circuit, and Second Circuit tangentially touched on the notion that injunctions may not be "automatic" even before eBay.  See Edwin Komen and Susan Hwang, Adding Onto eBay, Legal Times, Apr. 23, 2007 (discussing Supreme Court dicta in New York Times Co. v. Tasini and Campbell v. Acuff-Rose Music Inc., the 9th Circuit’s dicta in Abend v. MCA Inc. and the 2nd Circuit’s dicta in American Geophysical Union v. Texaco Inc.).  The Fifth Circuit recently discussed eBay in another case when it upheld a lower court’s grant of preliminary injunction to a plaintiff in a trademark infringement case.  Paulsson Geophysical Services Inc. v. Axel M. Sigmar,  86 U.S.P.Q. 2d. 1813, 1820-21 (5th Cir. 2008).  Commenting that the question of whether a court may still presume irreparable injury upon finding a likelihood of confusion was "difficult" in light of the eBay, the Court declined to answer the question because the plaintiff had affirmatively proved irreparable harm.  Id. at 1820-21 (affirming preliminary injunction order after plaintiff presented evidence establishing each of the four factors for injunctions, including evidence of the substantial threat of irreparable injury).

In a similar vein, the Eleventh Circuit recently reversed a preliminary injunction finding on  trademark infringement and false advertisement claims involving the defendant’s use of plaintiff’s marks as search terms in metadata.  North American Medical Corp. v. Axiom Worldwide, Inc., 522 F.3d 1211 (11th Cir. 2008).  Unlike the Paulsson case above, the lower court’s decision depended entirely on the presumption of irreparable harm.  The Eleventh Circuit commented that eBay "calls into question whether courts may presume irreparable harm merely because a plaintiff in an intellectual property case has demonstrated a likelihood of success on the merits."  The court noted that a "strong" case could be made that eBay necessarily extends to trademark infringement actions, observing that that the Lanham Act contained similar language as the Patent Act in terms of the court’s equitable powers to grant injunctions.  However, the court ultimately remanded the case to the lower court to decide whether a Lanham Act presumption of irreparable harm is categorically rejected by eBay.  The court, in essence, reserved judgment on the issue.

Based on the above cases, it is tempting to conclude that the wind seems to be blowing against the plaintiff-friendly irreparable harm presumption.  But not so fast.  In a very recent lower court decision, a federal district court in Oregon granted permanent injunctive relief to a copyright plaintiff by "presuming" irreparable harm despite acknowledging eBay.  See IDEARC Media Corp. v. Northwest Directories, Inc., Civil No. 07-796-HA (D. Or., May 23, 2008) (citing eBay factors but, nevertheless, presuming irreparable harm based on the defendant’s infringing conduct).  The case underscores the fact that, however the wind may be blowing, it may change direction at any time—at least until more circuits tackle the issue head on.

We are likely to see the issue more fully addressed, and more definitive rulings on the federal appellate level, as litigants more fully test the parameters of eBay in non-patent cases.  This will hopefully lend further clarity to the issue and, supposing the presumption is no longer available, the kinds of evidence that would definitively meet the trademark or copyright owner’s burden of proof.  Even so, the prudent IP owner must plan for the worst and be prepared to affirmatively prove each of the four traditional factors for injunctive relief.  Care should be taken to assemble all evidence that establishes that injunctive relief is both warranted and necessary.  Those who do will give the court a solid basis for granting such relief, and a solid basis for the appellate court to uphold the decision.  Those who do not may be faced with the unhappy prospect of successfully proving infringement but having to settle on a remedy that is devoid of a powerful tool to safeguard one’s IP from further damage.

Authored by:

Matthew W. Clanton

(202) 772-5338