Trademark Modernization Act and the Codification of the Presumption of Irreparable Harm

• Publication year: 2022

Trademark Modernization Act and the Codification of the Presumption of Irreparable Harm

Ethan LeBleu
University of Georgia, jwt74222@uga.edu

Trademark Modernization Act and the Codification of the Presumption of Irreparable Harm

Cover Page Footnote

J.D. Candidate, 2023, University of Georgia School of Law. I want to thank Professor Jean Goetz Mangan for all her help in improving my legal writing and for helping me write this Note. I would also like to thank all of my family, friends, and mentors for always supporting me in anything that I do.

This notes is available in Journal of Intellectual Property Law: https://digitalcommons.law.uga.edu/jipl/vol30/iss1/8

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LeBleu: Codification of Irreparable Harm

TRADEMARK MODERNIZATION ACT AND THE CODIFICATION OF THE PRESUMPTION OF IRREPARABLE HARM

Ethan LeBleu^*

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TABLE OF CONTENTS

I. INTRODUCTION............................................................................................103

II. BACKGROUND..............................................................................................105

A. INJUNCTIVE RELIEF IN TRADEMARK INFRINGEMENT CASESID. .... 105
B. ID.THE PRESIMPTION OF IRREPARABLE HARM PRIOR TO EBAY V. MERCEXCHANGE...............................................................................108
C. EBAY V. MERCEXCHANGE, A PATENT CASE THAT LEFT AN INDELIBLE MARK ON TRADEMARKS...............................................112
D. EBAY'S MARK UPON THE PRESUMPTION OF IRREPARABLE HARM IN TRADEMARK CASES.......................................................................113

1. Courts Applying eBay's Injunction Standard to Trademark Cases ................................................................................................................114
2. Courts that Continued to Apply the Presumption After eBay...117
3. Courts that Addressed Irreparable Harm Decisions Without Reliance on the Presumption............................................................118

E. THE TRADEMARK MODERNIZATION ACT OF 2020 AND THE CODIFICATION OF IRREPARABLE HARM........................................120

III. ANALYSIS.......................................................................................................122

A. TRADEMARK MODERNICATION ACT PROACTIVELY PROTECTS PLAINTIFFS...........................................................................................123
B. TRADEMARK MODERNIZATION ACT OF 2020 INCREASES CONSUMER CONFIDENCE IN MARKS..............................................125
C. DEFENDANTS HAVE SUFFICIENT MEANS TO PROTECT THEMSELVES AGAINST INJUNCTIVE RELIEF AFTER THE TRADEMARK MODERNIZATION ACT OF 2020...............................126

IV. CONCLUSION................................................................................................128

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I. INTRODUCTION

In response to the coronavirus pandemic, President Donald Trump signed into law the Consolidated Appropriations Act.¹ In addition to the massive coronavirus provisions, the same stroke of the pen brought about major updates to trademark law.² The hidden gem in the mountains of coronavirus provisions is the "Trademark Modernization Act of 2020" ("TMA").³ The TMA contains new proceedings before the United States Patent and Trademark Office, new rules related to Letters of Protest, and resolves a circuit split.⁴ The dispute Congress resolved involves whether a plaintiff is entitled to a presumption of irreparable harm when seeking injunctive relief for trademark infringement.⁵ The issue had been in contention since the U.S. Supreme Court decided eBay Inc. v. MercExchange, LLC, a patent infringement case, over fourteen years ago.⁶

Before eBay, trademark infringement plaintiffs seeking injunctive relief typically enjoyed the court-made presumption of irreparable harm.⁷ In eBay, the Court held that (1) courts should exercise equitable discretion in awarding injunctive relief and (2) plaintiffs seeking injunctive relief in a patent infringement

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case must satisfy a four-factor test for a permanent injunction.⁸ After eBay Inc. v. MercExchange, LLC, lower courts split on whether the presumption of irreparable harm still applied to trademark law.⁹ Lower courts took three main positions in trademark cases: (1) continued application of the presumption of irreparable harm the presumption of irreparable harm¹⁰ , (2) application of the four-factor test outlined in eBay,¹¹ or (3) refusal to address the presumption entirely.¹² Congress resolves the split between lower courts by codifying the presumption of irreparable harm in the TMA.¹³ This Note will argue that codifying the presumption gives plaintiffs a fair and effective route to protect their marks while still providing defendants adequate means to rebut the presumption.¹⁴

This Note is divided into four sections. Part II outlines what trademark infringement plaintiffs must prove to satisfy a claim for injunctive relief and discusses how courts applied the presumption of irreparable harm to trademarks before eBay. Part II also analyzes eBay and its impact on trademark litigation and assesses the TMA's impact on the presumption of irreparable harm. Next, Part III analyzes the presumption of irreparable harm and how the presumption allows plaintiffs to protect their trademarks while also allowing defendants to refute the presumption. Last, Part IV concludes that the TMA's changes to 15 U.S.C. § 1116(a) provide sufficient opportunities for plaintiffs to protect their marks and prevent forum shopping in trademark infringement cases.

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II. BACKGROUND

A. INJUNCTIVE RELIEF IN TRADEMARK INFRINGEMENT CASES

The Lanham Act, which governs trademarks,¹⁵ defines trademarks as:

any word, name, symbol, or device, or any combination thereof—

(1) used by a person, or
(2) which a person has a bona fide intention to use in commerce and applies to register on the principal register . . .

to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.¹⁶

The Act was passed in 1946 and provides for federal causes of action for "trademark dilution, cybersquatting, and several unfair competition claims, such as unregistered trademark infringement . . . , false advertising, false endorsement, and false designation of origin."¹⁷ Registered trademarks "prevent others from using the same or a similar trademark for related goods or services without . . . permission."¹⁸ Black's Law Dictionary defines "infringement" as "[a]n act that interferes with one of the exclusive rights of a patent, copyright, or trademark owner."¹⁹ "Trademark Infringement" is further defined as:

The unauthorized use of a trademark — or of a confusingly similar name, word, symbol, or any combination of these — in connection with the same or related goods or services and in a manner that is likely to cause confusion, deception, or mistake about the source of the goods or services.²⁰

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When a trademark is used in commerce without the consent of the trademark registrant in such a way that would be likely to cause confusion, mistake, or deceive others, the registrant may bring a civil action against the infringer.²¹

To meet its burden of proof for a trademark infringement claim, the "plaintiff must show (1) that it had trademark rights in the mark or name at issue and (2) that the other party had adopted a mark or name that was the same, or confusingly similar to its mark, such that consumers were likely to confuse the two."²² Plaintiffs in trademark infringement cases could receive injunctive relief to prevent any violation of their rights associated with their marks.²³ Preliminary injunctions are temporary forms of relief that "require[] a party to perform, or refrain from performing, a particular act until the court enters final judgment in the case."²⁴ Permanent injunctions "may continue after an action concludes, either perpetually or until a specified date."²⁵ By granting a preliminary or permanent injunction, courts help trademark infringement plaintiffs prevent defendants from using their marks.²⁶ Courts have the discretion to grant or deny either a preliminary or permanent injunction.²⁷ Preliminary injunctions are "sought before trial on the merits,"²⁸ and permanent injunctions are "sought following trial on the merits or other dispositions, such as summary judgment."²⁹ Injunctions are an incredibly powerful legal remedy; therefore courts are typically reluctant to grant injunctions.³⁰

When seeking an injunction, the plaintiff must show that they suffered a great injury and that damages alone are an inadequate form of relief.³¹ Generally, courts analyze four factors to determine if granting injunctive relief is appropriate: (1) whether there is irreparable harm to the plaintiff if the injunction is not granted; (2) whether other remedies can adequately compensate for plaintiff's injury; (3) whether an equitable remedy is warranted when considering

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the balance of hardships between the plaintiff and defendant; and (4) the public interest harmed by the injunction.³²

Both preliminary and permanent injunctions are crucial for plaintiffs in trademark infringement cases. Injunctions are a common remedy sought by plaintiffs in trademark infringement cases,³³ and historically, plaintiffs have received an injunction more times than not.³⁴ Injunctions are important for plaintiffs in trademark infringement cases because the harm to the plaintiff is difficult to define by dollars lost given the struggle courts have in determining the number of lost sales due to infringement.³⁵ Injuries from trademark infringement are frequently "inevitably" irreparable.³⁶

Further, trademark registrants may suffer damage to their image and reputation when an infringer causes consumers to be confused, mistaken, or deceived into buying inferior products or services from the infringer rather than buying the better product or...