eBay Standard Applies to Preliminary Injunctions in Trademark Cases

Considering whether requests for preliminary injunctions against alleged trademark infringement are subject to the traditional equitable principles set forth by the Supreme Court of the United States in eBay v. MercExchange, the U.S. Court of Appeals for the First Circuit vacated the district court’s grant of preliminary injunction to a trademark owner. Voice of the Arab World, Inc. v. MDTV Medical News Now, Inc., Case No. 10-1396 (1st Cir., May 27, 2011) (Torruella, J.).

Voice of the Arab World filed an action against MDTV Medical News Now in the District Court of Massachusetts, seeking a declaratory judgment that the plaintiff’s use and registration of the mark “MDTV” did not infringe on the defendant’s trademark rights. After filing counter claims, including one alleging trademark infringement, the defendant moved to preliminarily enjoin the plaintiff from using the MDTV mark. After the district court granted the preliminary injunction, the plaintiff appealed to the 1st Circuit.

The plaintiff challenged the district court’s preliminary injunction order on three grounds. First, the plaintiff argued that the district court erred in finding that the defendant demonstrated a likelihood of success on the merits of its trademark infringement claim. Second, the plaintiff alleged that the lower court erred as a matter of law by presuming that the defendant would likely suffer irreparable harm in the absence of preliminary injunctive relief and in not requiring the defendant to actually demonstrate such likelihood of irreparable harm. Third, the plaintiff argued that even if a preliminary injunction was appropriate, the district court abused its discretion by issuing an overly broad injunction.

The plaintiff’s argument concerning irreparable harm was two-fold. First, the plaintiff argued that presuming irreparable harm in trademark infringement cases where preliminary injunctive relief is sought is inconsistent with the Supreme Court’s 2006 decision in eBay Inc. v. MercExchange, L.L.C. In the alternative, the plaintiff contended that even if irreparable harm is properly presumed in certain trademark infringement cases, such a presumption could not apply in this case due to the defendant’s excessive delay in seeking injunctive relief.

Citing eBay, which dealt with a request for permanent injunction in a patent infringement case, the court held that a request to preliminarily enjoin alleged trademark infringement is subject to the traditional equitable principles delineated in eBay. Specifically, the court reiterated the eBay holding that “the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by such standards.” In recognizing that eBay properly applies to non-patent cases, the court noted that “it is significant that the Court in eBay supported its formulation of the traditional four-factor permanent injunction standard by citing cases that were unrelated to patent law.” The court also recognized that “nothing in the Lanham Act indicates that Congress intended to depart from traditional equitable principles,” noting, “like the Patent Act, the Lanham Act provides a court the ‘power to grant injunctions, according to principles of equity and upon such terms as the court may deem reasonable, to prevent[,]’ among other things, trademark infringement and domain name cybersquatting” citing 15 U.S.C. § 1116(a) (emphasis supplied). The court stated that the fact that eBay dealt with a permanent injunction did not change the conclusion that the its principles are equally applicable in the context of preliminary injunctions.