EBay flows NEG---provides a brink for us.

For decades, obtaining an injunction in a copyright or trademark case was simple: Show success on the merits (or likely success on the merits, at the preliminary injunction stage), and injunctive relief was usually automatically yours. Then, in 2006, the U.S. Supreme Court issued a ruling in a patent case called eBay Inc. v. MercExchange LLC, which upended the standard for obtaining injunctive relief in patent cases. Around 2010, appellate courts began to apply eBay to copyright cases; the past few months have seen the first instances of appellate courts’ application of eBay to cases under the Lanham Act.

The change in the injunction standard has had a significant impact on the way copyright and trademark plaintiffs do and should prepare their cases for seeking injunctions, and it provides new angles for defendants looking to oppose injunctive relief. If the trend in copyright law is any indicator, the forecast for 2015 shows expansion of the eBay standard in Lanham Act cases. With that in mind, this article will navigate the new legal standards and identify some of the types of cases that may not be as amenable to injunctive relief as they were before.

eBay and the Four-Factor Test

In eBay, a unanimous Supreme Court rejected the general rule in patent cases that permanent injunctions should be denied only in rare instances to protect the public interest. Instead, a plaintiff should be required to prove more than just likely or actual success on the merits in order to obtain the “extraordinary remedy” of an injunction — it also would need to show three extra factors: the plaintiff suffered an irreparable injury for which money damages would not be adequate; the balance of the hardships among the parties tips in favor of issuing the injunction; and the public interest would not be disserved by an injunction. Two years later, the court extended the standard to preliminary injunctions in Winter v. Natural Resources Defense Council, making the four-factor test applicable to injunctions at any stage of the case.

For a while, litigants in copyright and trademark cases appeared to disregard the four-factor test, and apart from a handful of district courts, judges appeared to disregard the test, too. But in 2010, in a case involving an unauthorized sequel to J.D. Salinger’s “Catcher in the Rye,” the Second Circuit held that the district court erred in issuing an injunction against the sequel without first considering the eBay factors. The next year, the Ninth Circuit applied eBay to affirm the denial of a preliminary injunction where the copyright owner failed to show a sufficient connection between the injury to its business and the infringement at issue. As of today, nearly all appellate courts have extended eBay and Winter to copyright infringement actions.

The shift did not appear to be happening in any significant way in trademark cases until last year, when the Ninth Circuit, in the Herb Reed Enterprises case, applied eBay in reversing a district court’s preliminary injunction against the use of the trademark “The Platters.” Strong amicus support accompanied the petition for certiorari, but the U.S. Supreme Court declined earlier this year to take the case. Since then, the Third Circuit has expressly extended eBay to a Lanham Act case, expressly agreeing with the rationale in Herb Reed, while other circuits, including the First and Eleventh, have ducked the issue.

Nonetheless, the denial of certiorari means that courts are quite likely to continue to follow the path set by Herb Reed — or at least until a circuit split or other cert-worthy situation arises. And even if it does, there are no guarantees that the Court would rule any differently than it did in eBay and Winter. Therefore, until some certainty arises, parties in trademark cases should be prepared to show or disprove the four factors, and take them into account even before formal litigation is commenced.

How the eBay Factors Apply in Copyright and Trademark Infringement Actions

With each issued opinion, we have started to learn more about what each of the three “new” factors means, and what it takes to satisfy them.

In assessing irreparable harm in copyright cases, courts have found certain types of evidence to be compelling as proof of irreparable harm, including: a showing that the loss cannot be measured or is one that nobody would expect to suffer; specific instances of marketplace confusion; harm to a plaintiff’s reputation, goodwill or brand; demonstrated inability to reign in the infringing acts (such as with widespread distribution of works); in a preliminary injunction case, the loss of a short window to exploit a work; or other significant business injury.

In contrast, courts have declined to find irreparable harm where the injury can be remedied by money damages (even where the defendant cannot pay those damages); the harm is hypothetical, minor or not proven; or where all that is shown is that the defendant intends to continue infringing. Furthermore, the traditional defense argument of delay in seeking an injunction appears to be carrying more weight in the irreparable harm inquiry in the post-eBay era.

Where irreparable harm is established, courts have failed to find in favor of issuing an injunction where the defendant would suffer significant expense in removing infringing material, or where the cessation of infringement would destroy primarily noninfringing components of a defendant’s work or business. However, not surprisingly, the inability to continue to sell an infringing work is not the type of hardship that a court will consider.