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Abbott Labs. v. Mead Johnson & Co. - 971 F.2d 6 (7th Cir. 1992)

Rule:

A party seeking a preliminary injunction must demonstrate (1) some likelihood of succeeding on the merits, and (2) that it has no adequate remedy at law and will suffer irreparable harm if preliminary relief is denied. If the moving party cannot establish either of these prerequisites, a court's inquiry is over and the injunction must be denied. If, however, the moving party clears both thresholds, the court must then consider (3) the irreparable harm the non-moving party will suffer if preliminary relief is granted, balancing that harm against the irreparable harm to the moving party if relief is denied, and (4) the public interest, meaning the consequences of granting or denying the injunction to non-parties.

Facts:

Oral electrolyte maintenance solutions are over-the-counter medical products used to prevent dehydration in infants suffering from acute diarrhea or vomiting. They are clear liquids, comprised almost exclusively of water, electrolytes and dissolved carbohydrates, and are ingested orally. Abbott and Mead are, for all practical purposes, the only two competitors in the United States OES market. Abbott's product is called "Pedialyte," while Mead's is called "Ricelyte". Abbott did not take kindly to Mead's promotional and advertising campaign. Abbott seeks relief under § 43(a) of the Lanham Act (the Act), 15 U.S.C. § 1125(a), to halt Mead's alleged false advertising and trade dress infringement practices in the oral electrolyte maintenance solution (OES) market. Plaintiff sought a preliminary injunction, which the district court denied. Plaintiff appealed, and the court vacated the order denying the injunction. 

Issue:

Did the lower court err in its the analysis of the factors to be considered when it denied an injunction?

Answer:

Yes

Conclusion:

The lower court misconstrued the legal principles and, therefore, abused its discretion in completely denying injunctive relief. The court held that the lower court was mistaken on the second factor, a showing of irreparable harm not compensable by money damages, when it found that plaintiff could be made whole by money damages. The mistake was in assuming that if plaintiff prevailed, defendant would have been out of business so that the sales lost to defendant could have been calculated with precision. The court pointed out the equitable and flexible nature of the relief sought, such that final relief could have been fashioned without forcing defendant out of business. Because plaintiff's damages would then have been speculative, money damages might not have been adequate. Thus, it was error to deny injunctive relief on that basis.

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