My last blog post discussed the changes to U.S. copyright law that were contained within the Consolidated Appropriations Act, 2021 (“CAA”), which was signed into law on Dec. 27, 2020, primarily to provide relief from the economic damage caused by COVID-19.
This post will address one of the changes that relates to the standard for obtaining a permanent injunction or a preliminary injunction for trademark infringement. Federal courts apply a four-part test in determining whether to issue an injunction upon a finding of trademark infringement. For example, in the Third Circuit, a plaintiff must establish four elements for a district court to grant a preliminary injunction in a trademark case: (1) a likelihood to succeed on the merits; (2) irreparable harm; (3) the balance of equities tips in the plaintiff’s favor; and (4) that a preliminary injunction is in the public interest. See, e.g., Ferring Pharmaceuticals, Inc. v. Watson Pharmaceuticals, Inc., 765 F.3d 205 (3d Cir. 2014). The precise wording of the test can differ, slightly, in each federal circuit.
Prior to 2006, courts would presume that the second element – irreparable harm – existed upon a finding of trademark infringement or upon a finding of a likelihood of success on the merits. This would usually result in the automatic issuance of a permanent injunction upon the finding of infringement and a very high likelihood that a court would issue a preliminary injunction upon the finding of a likelihood of success on the merits.
In 2006, the Supreme Court held that it was improper to issue a permanent injunction, automatically, upon a finding of patent infringement. See eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). This created a great deal of uncertainty as to whether irreparable harm should be presumed upon a finding of infringement in all intellectual-property cases, including trademark cases.
The CAA has resolved the uncertainty by unequivocally stating that irreparable harm can be presumed upon a finding of trademark infringement when parties seek permanent injunctions and upon a showing of likelihood of success on the merits when parties seek preliminary injunctions.