CHAPTER 3 - § 3.08

• Jurisdiction: United States

§ 3.08 REMEDIES PRIOR TO 1992

The traditional remedies of injunctive relief and monetary damages were part of the original Lanham Act.¹⁶⁴ Prior to 1946, these remedies were available at common law based on the principles of equity.¹⁶⁵

Injunctions were available to prevent irreparable injury to the plaintiff. A party seeking a preliminary injunction was required to show "a likelihood of success on the merits or ... sufficiently serious questions going to the merits to make them a fair ground for litigation."¹⁶⁶ In most courts, a showing of likelihood of confusion provided strong evidence that irreparable harm would occur if an injunction was not issued.¹⁶⁷ For example, the Second Circuit enjoined a defendant from manufacturing and selling toothbrush packaging that was "confusingly similar to or colorably imitating" the packaging made and sold by Oral-B.¹⁶⁸ The court found that the defendant had copied Oral-B's numbering system, a window showing the head of the toothbrush, and descriptive labeling on a white box.¹⁶⁹ In fact, virtually all courts during this time granted a presumption of irreparable harm where likelihood of confusion was shown. Recently, the Supreme Court's decision in eBay v. MercExchange (a patent case) has caused some courts to question the presumption of irreparable harm in Lanham Act cases.¹⁷⁰ eBay essentially did away with the presumption of irreparable harm in patent cases, but some have sought to apply eBay to trademark and trade dress cases as well. Despite these attempts, some courts still apply a presumption of irreparable harm where likelihood of confusion is established (due to the pivotal role that injunctions play in Lanham Act cases).¹⁷¹

With respect to defendant's profits and plaintiff's lost profits, most courts followed the Supreme Court's 1947 decision in Champion Spark Plug v. Sanders.¹⁷² In Champion, the Court held that where monetary recovery by the plaintiff is not necessary to "satisfy the equities of the case," it should not be granted.¹⁷³ However, the Court did note that where a defendant is guilty of "fraud or palming off" (i.e., willful infringement), monetary recovery should be ordered.¹⁷⁴ Understandably, virtually all courts followed the holding of Champion for many years and required a showing of willfulness before ordering an accounting.¹⁷⁵ The pendulum has recently swung the other direction, due in part to the 1999 amendments to the Lanham Act. In 2005, the Third Circuit became the second court of appeals...