Plaintiffs seeking a preliminary injunction in copyright or trademark infringement cases have long benefited from a presumption of irreparable harm that followed a showing of a likelihood of success on the merits. The presumption was a free pass; show success and the court assumed irreparable harm. Irreparable harm has been defined in Faiveley Transp. Malmo AB v. Wabtec Corp., as “an injury that is neither remote nor speculative, but actual and imminent, and one that cannot be remedied if a court waits until the end of trial to resolve the harm.”
The Supreme Court in eBay v. Merc-Exchange threw out that presumption in patent cases. The Second Circuit in Salinger v. Colting recently held that eBay also ends that presumption in copyright and trademark cases.
As a result you will need to show irreparable harm to be entitled to a preliminary injunction. But it is unlikely the new standard will make much practical difference in most cases. Salinger (using the double negative) was careful “not to say that most copyright plaintiffs who have shown a likelihood of success on the merits would not be irreparable harmed absent preliminary injunctive relief (emphasis added).
Nevertheless, because of Salinger and those Circuits that follow it, IP litigators may need a quick refresher course in demonstrating irreparable harm. Here are a few suggestions.
Loss of Market Share
Litigators may want to focus first on loss of market share, which has traditionally been viewed as irreparable. That is because, as Salinger noted, citing to an earlier 2d Circuit opinion in Omega Importing v. Petri-Kine “‘to prove the loss of sales due to infringement is … notoriously difficult.’” The ease of infringement and the viral nature of unauthorized digital distribution on the Internet increases the loss of market share. Each user is capable with a click of the mouse of making a perfect copy of an infringing file, thereby exponentially multiplying the number of unauthorized copies available for distribution.
Market confusion caused by illegal copying also produces irreparable harm. The confusion, as Clonus Assocs. v. Dreamworks pointed out, results in damage to the copyright holder in “incalculable and incurable ways.” For instance, defendant’s illegal copy may be so poor in quality that prospective purchasers will turn to other competitors rather than buy from either plaintiff or defendant. Or that illegal copy may be so good and priced so low that consumers would have no reason to continue to buy plaintiff’s work.
Loss of Monopoly Control
You might also focus on the loss of control over one’s copyrights caused by infringement. A copyright is a grant of a limited monopoly which gives the holder the right to control the use of its work. Without a preliminary injunction the copyright holder loses the power to control the exploitation of its property involuntarily ceding the wrongdoer effectively a compulsory license to profit from its infringement until the case is over. Courts find that loss of control results in incalculable damage.
Loss of Incentive to Create
Loss of incentive to create may also win you an injunction. As Salinger noted, copyright provides “individuals a financial incentive to contribute to the store of knowledge.” Infringement damages the incentive. In Warner Bros. v. RDR Books, J.K. Rowling, the author of the Harry Potter series, convinced the court, based solely on her self-serving testimony, that the continued sale of defendant’s unauthorized companion guide to that series would “destroy” Rowling’s incentive to write her own companion guide. That loss of will to create, not easily rebuttable on cross-examination, coupled with the loss of sales resulted from the presence of the infringing guide, were enough to establish irreparable harm even in the absence of the presumption.
Continuing Threat of Further Infringement
Finally, if defendant’s past history of infringement is likely to continue absent a preliminary injunction, irreparable harm will also be present. As Powell v. Walt Disney indicates, a repeat infringer’s convenient plea after being caught “red-handed” that he will reform and infringe no more may fall on unsympathetic ears.
The More Things Change …
In sum, has Salinger “changed the contours of copyright litigation” as two noted and respected commentators have stated in an article published in the NY Law Journal article on May 21, 2010. Not really. Plaintiffs will have to pay more attention to proof of irreparable harm. But because that harm is usually evident in infringement cases (thus giving rise to the presumption), court are likely to continue to issue preliminary injunctions with the same frequency as they did before.
For more discussion on this subject take a look at the well written article aptly titled “Coping Without the Presumption” by Wade B. Gentz published in the most recent edition of Landslide, an ABA publication, please click here. For a hard copy of this article as published by the ABA Litigation Section click here. For a copy published in the BNA Patent Trademark & Copyright Journal click here.