Don’t Despair: Even Without a Presumption of Irreparable Harm You Are Still Likely to Win a Preliminary Injunction in Copyright Litigation after Establishing a Likelihood of Infringement

Plaintiffs seeking a preliminary injunction in copyright or trademark infringement cases have long benefited from a presumption of irreparable harm that followed a showing of a likelihood of success on the merits. The presumption was a free pass; show success and the court assumed irreparable harm. Irreparable harm has been defined in Faiveley Transp. Malmo AB v. Wabtec Corp., as “an injury that is neither remote nor speculative, but actual and imminent, and one that cannot be remedied if a court waits until the end of trial to resolve the harm.”

The Supreme Court in eBay v. Merc-Exchange threw out that presumption in patent cases. The Second Circuit in Salinger v. Colting recently held that eBay also ends that presumption in copyright and trademark cases.

As a result you will need to show irreparable harm to be entitled to a preliminary injunction.  But it is unlikely the new standard will make much practical difference in most cases. Salinger (using the double negative) was careful “not to say that most copyright plaintiffs who have shown a likelihood of success on the merits would not be irreparable harmed absent preliminary injunctive relief (emphasis added).

Nevertheless, because of Salinger and those Circuits that follow it, IP litigators may need a quick refresher course in demonstrating irreparable harm. Here are a few suggestions.

Loss of Market Share

Litigators may want to focus first on loss of market share, which has traditionally been viewed as irreparable. That is because, as Salinger noted, citing to an earlier 2d Circuit opinion in Omega Importing v. Petri-Kine “‘to prove the loss of sales due to infringement is … notoriously difficult.’” The ease of infringement and the viral nature of unauthorized digital distribution on the Internet increases the loss of market share. Each user is capable with a click of the mouse of making a perfect copy of an infringing file, thereby exponentially multiplying the number of unauthorized copies available for distribution.

Market Confusion

Market confusion caused by illegal copying also produces irreparable harm. The confusion, as Clonus Assocs. v. Dreamworks pointed out, results in damage to the copyright holder in “incalculable and incurable ways.” For instance, defendant’s illegal copy may be so poor in quality that prospective purchasers will turn to other competitors rather than buy from either plaintiff or defendant. Or that illegal copy may be so good and priced so low that consumers would have no reason to continue to buy plaintiff’s work.

Loss of Monopoly Control

You might also focus on the loss of control over one’s copyrights caused by infringement. A copyright is a grant of a limited monopoly which gives the holder the right to control the use of its work. Without a preliminary injunction the copyright holder loses the power to control the exploitation of its property involuntarily ceding the wrongdoer effectively a compulsory license to profit from its infringement until the case is over. Courts find that loss of control results in incalculable damage.

Loss of Incentive to Create

Loss of incentive to create may also win you an injunction. As Salinger noted, copyright provides “individuals a financial incentive to contribute to the store of knowledge.” Infringement damages the incentive. In Warner Bros. v. RDR Books, J.K. Rowling, the author of the Harry Potter series, convinced the court, based solely on her self-serving testimony, that the continued sale of defendant’s unauthorized companion guide to that series would “destroy” Rowling’s incentive to write her own companion guide. That loss of will to create, not easily rebuttable on cross-examination, coupled with the loss of sales resulted from the presence of the infringing guide, were enough to establish irreparable harm even in the absence of the presumption.

Continuing Threat of Further Infringement

Finally, if defendant’s past history of infringement is likely to continue absent a preliminary injunction, irreparable harm will also be present. As Powell v. Walt Disney indicates, a repeat infringer’s convenient plea after being caught “red-handed” that he will reform and infringe no more may fall on unsympathetic ears.

The More Things Change …

In sum, has Salinger “changed the contours of copyright litigation” as two noted and respected commentators have stated in an article published in the  NY Law Journal article on May 21, 2010. Not really. Plaintiffs will have to pay more attention to proof of irreparable harm. But because that harm is usually evident in infringement cases (thus giving rise to the presumption), court are likely to continue to issue preliminary injunctions with the same frequency as they did before.

For more discussion on this subject take a look at the well written article aptly titled “Coping Without the Presumption” by Wade B. Gentz published in the most recent edition of Landslide, an ABA publication, please click here.  For a hard copy of this article as published by the ABA Litigation Section click here. For a copy published in the BNA Patent Trademark & Copyright Journal click here.

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4 Responses to “Don’t Despair: Even Without a Presumption of Irreparable Harm You Are Still Likely to Win a Preliminary Injunction in Copyright Litigation after Establishing a Likelihood of Infringement”

  1. Hi, Andy,

    This is a great site–and also very attractive presentation graphically!
    I have a question re. fair use:
    In Title 17, Section 107, the second factor to be considered is when there is a question about whether the use is fair is:
    (2) the nature of the work.
    I have never understood what that means–can you please explain?
    Thank you, and best regards,

    Teri

  2. […] Dallas Cowboys Cheerleaders, Inc. v. Scoreboard Posters, Inc., 600 F.2d 1184 (1979).  Moreover, as this excellent post by Andrew Berger illustrates, Salinger is unlikely to have a significant practical effect even in the other circuits […]

  3. Hi Teri:
    This 2nd factor is typically the least determinative in fair use analysis. It requires the court to determine “the nature of the copyrighted work.” As Robert Clarida states in his fine book, Copyright Law Deskbook, this factor reduces to one of 3 subsidiary questions:

    a. is plaintiff’s work published or unpublished? Defendants are allowed a broader scope of fair use for unpublished works;
    b. is plaintiff’s work factual or creative; this is probably the most important question and here defendants are allowed a broader scope of fair use for factual works rather than creative ones; and
    c. is plaintiff’s work available or out of print; defendants are allowed a broader scope of fair use for out of print works than for readily available ones.

    Keep in mind that just because defendant’s work is factual (rather than creative) does not always mean it is fair use. If a defendant captures the heart of plaintiff’s work that may tilt the scales towards a finding of no fair use even though both works are factual.

    Hope this helps. But predictions about any fair use outcome are not for the faint of heart. This is a fact specific area where broad generalizations are not very useful.

    Andy

  4. Dear Andy,

    You’ve clarified a question about fair use that I’ve had for many years!
    Thank you!

    Kindest regards,

    Teri

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