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The decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards. The Supreme Court therefore has rejected the general rule applied by the Court of Appeals that an injunction should issue once patent infringement has been established, and has warned lower courts away from applying "broad classifications" or "categorical rules" that would pervert the traditional four-factor test. However, two concurrences respectively by Chief Justice Roberts and Justice Kennedy, separately joined by a total of seven justices, suggested that such rules could survive as "lessons of historical practice" that might inform the district courts' equitable discretion when the circumstances of a case bear substantial parallels to litigation the courts have confronted before. Since then, the First Circuit has said that there is no principled reason why eBay should not apply to a request for a preliminary injunction to halt trademark infringement, despite the difference in context. However, the First Circuit so far has declined to address whether eBay's bar on "general" or "categorical" rules includes the presumption of irreparable harm in trademark disputes.
Building #19, Inc. obtained a number of the trademark holders' crystal figurines that it hoped to resell and designed a newspaper advertisement emblazoned with the trademarked name in large print font. Swarovski Aktiengesellschaft and Swarovski North America Limited (collectively, "Swarovski") sued Building #19, alleging trademark infringement under 15 U.S.C.S. § 1114. The United States District Court for the District of Rhode Island granted in part Swarovski’s motion for a preliminary injunction by limiting Building #19, Inc.’s use of the trademarked name to a smaller font size. Building #19 appealed.
Did the district court err in granting in part Swarovski’s motion for a preliminary injunction by limiting Building #19’s use of the trademarked name to a smaller font size?
Without endorsing any particular approach to the nominative fair use doctrine, the appellate court determined that remand was warranted because (1) the district court erred by granting Swarovski’s request for a preliminary injunction without first finding that Building #19’s use of the mark in the proposed advertisement was likely to cause confusion, and (2) there was no indication in the record that the district court concluded that Swarovski would suffer irreparable harm if the district court allowed the advertisement to run as proposed.