Tom Doherty Assocs. v. Saban Entm't, Inc. - 60 F.3d 27 (2d Cir. 1995)

Rule:

The typical preliminary injunction is prohibitory and generally seeks only to maintain the status quo pending a trial on the merits. A mandatory injunction, in contrast, is said to alter the status quo by commanding some positive act. This distinction is important because a mandatory injunction should issue only upon a clear showing that the moving party is entitled to the relief requested, or where extreme or very serious damage will result from a denial of preliminary relief. The "clear" or "substantial" showing requirement - the variation in language does not reflect a variation in meaning - thus alters the traditional formula by requiring that the movant demonstrate a greater likelihood of success.

Facts:

Defendants SABAN Entertainment, Inc. and SABAN International N.V., owners and licensors of children's cartoon characters decided that they wanted to feature their characters and stories in children's books and approached a number of publishers, including plaintiff TOR Books. Defendant granted plaintiff Tom Doherty Associates, INC. d/b/a TOR Books, the right of first refusal to publish books based on the characters. Plaintiff sought an injunction for defendants' failure to offer rights to "Mighty Morphin Power Rangers." Defendants appealed from a preliminary injunction entered in the district court ordering defendants to license certain intellectual property to plaintiff in plaintiff's suit for breach of contract. In particular, defendants raised questions concerning when a preliminary injunction alters, rather than maintains, existing conditions; what standard regarding likelihood of success a plaintiff must meet to obtain an order that alters the status quo and under what circumstances a lost opportunity to market a product constitutes irreparable harm.

Issue:

Should the defendant’s appeal from a preliminary injunction on the grounds it raised be granted? 

Answer:

No.

Conclusion:

The court affirmed the preliminary grant of mandatory and prohibitory injunctions. The court held that plaintiff had met its heightened burden of showing a substantial likelihood of success on the merits and had made a clear showing that potential loss of goodwill could constitute irreparable harm and entitled plaintiff to the mandatory relief sought since the product sought was so uniquely popular that it would radically alter plaintiff's position in the industry. The court refused to admit extrinsic evidence that would change, rather than clarify, the parties' written contract, and also held that plaintiff's delay in asserting the right to publish a book was not sufficient to vitiate the presumption of irreparable harm from copyright infringement.