11th Circuit Questions the Presumption of Irreparable Harm in Trademark Infringement Cases

11th Circuit Questions the Presumption of Irreparable Harm in Trademark Infringement Cases

     On April 7, 2008, the Court of Appeals for the 11th Circuit addressed the use of a competitor’s trademarks in meta tags to divert internet traffic away from the trademark owner’s website as well as the standard for the issuance of a preliminary injunction in trademark infringement actions.
  
     In North American Medical Corp. v. Axiom Worldwide, 2008 U.S. App. LEXIS 7370, the plaintiff (“NAM”) sought a preliminary injunction for, inter alia, trademark infringement, based upon defendant Axiom intentional use of NAM’s trademarks in the meta tags of Axiom’s website.  ( Meta tags are words or phrases intended to describe websites that are used by search engines to drive traffic to websites.  Meta tags are embedded in a website’s code and are not displayed to website visitors.)

 

     Despite the fact that Axiom’s website never displayed ’s registered trademarks or mentioned ’s products, the district court found a likelihood of confusion.   Finding that NAM was likely to succeed on the merits of its trademark infringement claim and presuming irreparable injury in the absence of an injunction, the district court issued a preliminary injunction prohibiting Axiom from using NAM’s trademarks as meta tags.

 

 

     On appeal, Axiom challenged the district court’s holding, arguing that use of NAM’s trademarks in meta tags does not constitute “use in commerce” and cannot create a likelihood of confusion.  Axiom also argued that the district court erred by categorically presuming irreparable harm in the absence of a preliminary injunction.

 

     The 11th Circuit affirmed the district court’s finding that there was a likelihood of confusion, holding: 

 

     Because Axiom’s use of NAM’s trademarks as meta tags caused the Google search to suggest that Axiom’s products and NAM’s products has the same source, or that Axiom sold both lines, or that there was some other relationship between Axiom and NAM, Axiom’s use of the meta tags caused a likelihood of actual source confusion.


     However, the 11th Circuit vacated the preliminary injunction.  Specifically, the 11th Circuit vacated that part of the district court’s decision which presumed irreparable harm in the absence of a preliminary injunction citing eBay, Inc. v. MercExchange, L.L.C.,  547 U.S. 388, 126 S. Ct. 1837 (2006).  As noted in the decision, eBay called into question whether courts may presume irreparable harm “merely because a plaintiff in an intellectual property case has demonstrated a likelihood of success on the merits.”

 

     Although the eBay case involved the Patent Act and permanent injunctive relief, the 11th Circuit extended eBay’s reasoning to trademark cases involving preliminary injunctive relief.  However, the 11th Circuit declined to opine on the effect of eBay on the case, citing, inter alia, an insufficient record on appeal. In the end, the case was remanded to the district court “for further proceedings not inconsistent with this opinion, and with eBay.”

 

     For more on eBay and its applicability to trademark infringement actions, see Gilson on Trademarks § 14.02[3][b][ii].