CHAPTER 10 - § 10.02

• Jurisdiction: United States

§ 10.02 INJUNCTIONS

In general terms, an "injunction" is a court-ordered mandate requiring a person or entity to do (or refrain from doing) certain act(s) that are injuring (or may injure) another party. Importantly, injunctions are granted on principles of equity⁶ or fairness, and as a result, the rights of all parties involved, including the rights of the public as a whole, must be considered before an injunction may be granted.

As noted above, injunctive relief is available pursuant to the Lanham Act, which provides that courts "shall have the power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent a violation under subsections (a), (c), or (d) of section 43."⁷

In most trade dress cases, injunctive relief prohibiting further infringement is the primary remedy sought. Because the essence of trade dress infringement is that the defendant's use will be likely to cause confusion as to source or sponsorship (and the resulting loss of goodwill), money damages are often insufficient to remedy the infringement.

A trade dress owner may seek an injunction to stop ongoing acts of infringement and to prevent such acts from occurring in the future. The type and scope of such injunctions depend in large part on the harm (or potential harm) caused to the trade dress owner, the overall impact an injunction may have on the accused infringer and on the public as a whole, and other equitable considerations.⁸ In this respect, injunctions are individualized and tailored according to the particular facts and considerations of each case.⁹

Below we consider several different types of injunctions, each of which has particular uses and applications. The most common of these injunctions, preliminary injunctions, are used to stop or prevent an infringer from continuing its infringing activities pending the outcome of a trial. Permanent injunctions are similarly utilized to stop or prevent infringing activities, but are typically employed after a trial on the merits or other final adjudication. Last, we consider a different type of injunction altogether. This third category comprises injunctions requiring corrective action. These types of injunctions are used to force infringers to affirmatively take action, such as recalling or destroying infringing products.

Trade dress cases generally focus on a showing of a likelihood of success on the merits in determining whether to grant a preliminary injunction, and on actual success on the merits in determining whether to grant a permanent injunction. The same hold true for injunctions requiring corrective action; likelihood of success on the merits must be proved by the plaintiff. To succeed with any of these remedies, a plaintiff must prove a likelihood of confusion. Traditionally, almost all courts have recognized a presumption of irreparable harm that arises once a showing is made of a likelihood of success on the merits of an infringement claim.¹⁰ However, that presumption has recently come under some criticism based on the Supreme Court's 2006 decision in eBay v. MercExchange, which is discussed in more detail below.

[1]—Preliminary Injunctions

A trade dress owner desiring to immediately stop or prevent an infringer from engaging in acts believed to be infringing (or otherwise illegal) may petition for a preliminary injunction. As its name suggests, a preliminary injunction is issued on a preliminary basis before the outcome of a pending lawsuit (such as an infringement action) has been determined. Preliminary injunctions may also be issued pending the outcome of a petition for a permanent injunction (discussed below). While obviously advantageous and extremely desirable, preliminary injunctions are considered "extraordinary" remedies, and as a result they carry particularly high burdens of proof and persuasion.¹¹

When determining whether to grant a preliminary injunction, courts typically consider and balance the following five basic criteria,¹² each of which is discussed further below.

• Probability of Success on the Merits

• Irreparable Harm to Plaintiff

• Preservation of Status Quo

• Balance of Hardships

• Protection of Third Parties

The first of the five basic criteria, probability of success on the merits, is perhaps the most difficult to establish. This criterion requires the plaintiff to show that he or she has a clear and substantial likelihood of success at trial on the merits.¹³ Essentially, the plaintiff must prove that it will almost certainly prevail at trial. If there is any doubt as to the plaintiff's chances of success, courts will likely deny the preliminary injunction request.¹⁴ In cases of trade dress infringement, this means that the plaintiff must prove (1) that the trade dress in question is "primarily non-functional," (2) that the trade dress has acquired secondary meaning, and (3) that the defendant's trade dress is "likely to confuse or mislead consumers, either by causing them to think that the defendant's product is the plaintiff's product or by causing them to think that the two products come from the same source."¹⁵ The first two showings are typically discharged where the plaintiff holds a federal registration, but all trade dress plaintiffs must show a likelihood of confusion.¹⁶ In the absence of a federal registration, proving a strong likelihood of success on all three points above, before any substantive discovery has taken place, can sometimes be an uphill battle.

The second criterion considers the likelihood of whether the plaintiff will suffer irreparable harm if they are forced to wait until a full trial on the merits has run its course before receiving relief.¹⁷ The term irreparable harm, in the context of this criterion, refers to the type of harm that is difficult to quantify (in terms of cash value)¹⁸ and/or the type for which monetary damages will not adequately compensate the plaintiff for the harm caused by the infringement.¹⁹ Examples of such "irreparable harm" recognized by the courts include harm to business goodwill or commercial reputation,²⁰ confusion of the public, and loss of control of a plaintiff's reputation caused by the unauthorized use of the plaintiff's trade dress.²¹

The third criterion asks the court to consider whether granting a preliminary injunction will preserve the status quo.²² "Maintaining the status quo" in this context refers to maintaining the status of the parties prior to the alleged infringement. Thus, for example, if a defendant gains a competitive advantage over the plaintiff as a direct result of defendant's infringement, a preliminary injunction may be used to return the parties to their relative positions before the alleged infringement occurred. The "status quo" criteria is not always addressed by courts in deciding whether preliminary injunctive relief is appropriate, but is often raised when the relief sought is "mandatory" as opposed to "prohibitive."²³ "Prohibitory" injunctions seeks only to maintain the status quo pending a trial on the merits, whereas "mandatory" injunctions seek to alter the status quo.²⁴ Accordingly, "mandatory" injunctions often require a stronger showing of a clear entitlement to relief, such as a "clear" or "substantial" likelihood of success on the merits.²⁵

The fourth criterion involves balancing the harms or hardships likely to be suffered by all parties involved, and then determining whether such hardships balance in favor of the plaintiff.²⁶ Thus, if the harm or hardship imposed on the plaintiff by denying a preliminary injunction outweighs the harm or hardship to the defendant by granting a preliminary injunction, then the hardships balance in favor of the plaintiff, thereby favoring a grant of the preliminary injunction.²⁷

The last of the five criteria considers whether a preliminary injunction is necessary to protect third parties or their interests, and particularly the public at large and its interests.²⁸ In assessing this criterion, the "public interest" factor may be defined as the right of the public not to be deceived or confused,²⁹ or, alternatively, the right to free and open competition.³⁰ In either case, this public interest factor is balanced with the interests of the parties (i.e., the plaintiff and defendant) and used to determine whether equity favors the grant or denial of a preliminary injunction.³¹

The five criteria described above are neither exclusive nor exhaustive; nor are they assessed individually or independent of one another. Instead, the criteria are considered collectively, such that a strong showing with respect to one of the criteria, for example, may make up for a weak showing in another. Each of the circuit courts applies these factors differently, and one should look to the relevant test in the circuit where litigation is being contemplated.³²

The decision in McNeil Nutritionals v. Heartland Sweeteners provides a good analysis of the above-referenced preliminary injunction factors. There the plaintiff was successful in convincing the court to grant a preliminary injunction in a trade dress case relating to the distinctive yellow packaging associated with Splenda.³³ Before addressing the injunction request, the court resolved the scope of the request. The court found the plaintiff's request for injunctive relief to be "prohibitory," not "mandatory," and thus that the plaintiff need not satisfy a heightened burden of proof.³⁴ In essence, this meant that the plaintiff could prevent the defendant from selling additional products, but could not require the defendant to destroy existing inventory. In addressing the four-factor test of the Third Circuit, the court found that the plaintiff was likely to succeed on the merits (the first factor), having established a likelihood of confusion. On irreparable harm (the second factor), the court found that the likelihood of confusion was sufficient. The court also found that the defendant had identified no...