Herb Reed Enterprises LLC v. Florida Entertainment Management Inc

In yet another chapter in the epic saga regarding use of the musical group name “The Platters,” the U.S. Court of Appeals for Ninth Circuit overturned precedent by finding that irreparable harm must be proven in trademark cases when a party seeks injunctive relief even if the party establishes a likelihood of success on the merits. Herb Reed Enterprises LLC v. Florida Entertainment Management Inc., Case No. 12-16868 (9th Cir., Dec. 2, 2013) (McKeown, J.) (Wallace, J. concurring).

Herb Reed Enterprises (HRE) is the management company of one of the founders of The Platters, a very successful musical group established in 1953. It ultimately broke up in the 1960s as the original members left one by one. But in the decades since, the original members—each of whom has continued to perform under some derivation of the band name—along with their current and former managers have bitterly fought over ownership of “The Platters” trademark in more than half a dozen lawsuits. Some of them have resulted in agreements or judgments allowing the parties to use the name in conjunction with another (e.g., Herb Reed and the Platters).

Defendant Larry Marshak and his company Florida Entertainment Management claim rights to the name via an agreement with an entity associated with the band’s original management company. The validity of that company’s rights has been the subject of many prior lawsuits. HRE’s present suit is based on Marshak’s use of “The Platters” name when marketing a tribute band. Marshak appealed. After the district court granted HRE a preliminary injunction. Marshak appealed.

After finding that HRE’s suit was not barred by res judicata or laches, the 9th Circuit addressed whether HRE satisfied the four elements required for a preliminary injunction. A party seeking a preliminary injunction must establish that it is likely to succeed on the merits, that it is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in its favor and that an injunction is in the public interest.

Under 9th Circuit precedent, irreparable harm was generally presumed in a trademark infringement case once a likelihood of success on the merits was shown. Here, the court overturned that presumption by citing the heightened injunction standards set forth in the Supreme Court’s decisions in eBay Inc. v. MercExchange LLC (2006) and Winter v. Natural Resources Defense Council (2008). In eBay, the Supreme Court held that an injunction should not be automatically issued based on a finding of patent infringement. In Winter, the Supreme Court held that a plaintiff seeking a preliminary injunction must demonstrate that irreparable injury is likely—not merely a “possibility”—in the absence of an injunction.

Ultimately, even though the 9th Circuit panel affirmed the district court’s finding that HRE proved a likelihood of success on the merit, it reversed the preliminary injunction because “the district court’s analysis of irreparable harm is cursory and conclusory, rather than being grounded in any evidence or showing by HRE.”

Practice Note: District courts will now require plaintiffs seeking a preliminary injunction to provide detailed evidence of specific injury to reputation or goodwill because “unsupported and conclusory statements regarding harm” are insufficient to survive appellate scrutiny.