Christopher Phelps & Assocs., LLC v. Galloway - 492 F.3d 532 (4th Cir. 2007)

Rule:

To obtain a permanent injunction in any type of case, including a patent or copyright case, a plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and the defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. Even upon this showing, whether to grant an injunction still remains in the equitable discretion of the court.

Facts:

A client who paid $ 20,000 to plaintiff for the design at issue gave a copy of the plans to defendant. Defendant began construction of his home using the design made by plaintiff. Plaintiff commenced the action against defendant for copyright infringement. Plaintiff sought damages, disgorgement of profits, and injunctive relief. During trial, the district court instructed the jury that the design at issue was a derivative work. A jury found that defendant infringed plaintiff’s copyright and awarded it 20,000 in damages, the fee that plaintiff traditionally charged for such plans. The jury also found that defendant had realized no profits to disgorge. The district court thereafter declined to enter an injunction, finding that the jury verdict had made plaintiff “whole,” and entered judgment in favor of plaintiff for $20,000. Plaintiff appealed, requesting a new trial on damages and the entry of an injunction prohibiting the future lease or sale of the infringing house and mandating the destruction or return of the infringing plans.

Issue:

1) Did the district court err in instructing the jury that petitioner’s copyright was a derivative work? 

2) Did the district court err in refusing to enter an injunction against the defendant?  

Answer:

1) Yes. 2) No.

Conclusion:

The court held that the district court erred during the damages phase of trial in instructing the jury that petitioner’s copyright was a derivative work. However, the erroneous instruction was harmless because the verdict indicated that the jury understood that they were to award damages as if defendant's entire house was an infringement. The court held that the district court's refusal to enjoin the future lease or sale of defendant's house was proper because plaintiff was fully and adequately compensated for the copying and use of its design, defendant's right to alienate his property trumped plaintiff's interest, and such an injunction would have encumbered property unrelated to the infringement. In denying plaintiff's request for the return or destruction of the plans, the district court failed to consider traditional factors for equitable relief.