LaFrance on the Availability of Injunctive Relief for Intellectual Property Infringement after eBay,

LaFrance on the Availability of Injunctive Relief for Intellectual Property Infringement after eBay,


The Supreme Court's decision in eBay v. MercExchange changed the playing field for patentees seeking permanent injunctions against infringers, rejecting the Federal Circuit's longstanding position that permanent injunctions should be granted absent exceptional circumstances, and requiring instead that courts apply traditional principles of equity. Law Professor Mary LaFrance examines how this decision has affected the federal courts' willingness to grant permanent and preliminary injunctions in patent, copyright, and trademark cases. Professor LaFrance writes:
 
     After a jury found that online auction operator eBay had infringed a business method patent owned by MercExchange, the district court awarded damages but declined to issue a permanent injunction. On appeal, the Federal Circuit reversed the district court’s denial of injunctive relief, on the ground that it violated the “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances.” MercExchange, L.L.C. v. Ebay, Inc., 401 F.3d 1323, 1339 (Fed. Cir. 2005). A unanimous Supreme Court vacated this decision, rejecting the Federal Circuit’s “exceptional circumstances” rule as inconsistent with traditional principles of equitable relief. Instead, the Court held, in accordance with traditional principles of equity, a plaintiff seeking a permanent injunction 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 defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.” Ebay, Inc. v. MercExchange, L.L.C., 126 S.Ct. 1837, 1839 (2006).
 
     ….
 
     Although the Supreme Court did not indicate whether its eBay analysis should apply to claims involving trademark infringement, unfair competition, and false advertising, a number of courts have so held. See, e.g., Reno Air Racing Ass’n, Inc. v. McCord, 452 F.3d 1126 (9th Cir. 2006) (upholding injunction); Audi AG v. D’Amato, 469 F.3d 534, 550 (6th Cir. 2006) (upholding injunction); Baden Sports, Inc. v. Kabushiki Kaisha Molten, 2007 Dist. LEXIS 70776 (W.D. Wash. 2007) (granting injunction against false advertising); Western Union Holdings, Inc. v. Eastern Union, Inc., 2007 U.S. Dist. LEXIS 66281 (N.D. Ga. 2007) (granting injunction). At least one court has applied eBay to a federal dilution claim. See Nike, Inc. v. Nikepal Intern., Inc., 84 U.S.P.Q.2d (BNA) 1521, 2007 Dist. LEXIS 66686 (E.D. Cal. 2007) (granting injunction).
 
     In contrast, one court denied injunctive relief without mentioning eBay, and explicitly relied on pre-eBay case law stating that a likelihood of confusion establishes irreparable harm. See Cartier v. Aaron Faber, Inc., 512 F. Supp.2d 165 (S.D.N.Y. 2007) (denying permanent injunction pending resolution of disputed issue of fact).