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Trademark Litigators: Congress Reinstated the Presumption of Irreparable Harm in Lanham Act Cases

Summary

  • Congress has established a potent presumption of irreparable harm that applies to trademark infringement and false advertising cases.
  • Those who move for injunctive relief would do well to point to this presumption in support of their motions.
  • Those who oppose injunctive relief will likely need to expend additional efforts either rebutting the presumption of irreparable harm
Trademark Litigators: Congress Reinstated the Presumption of Irreparable Harm in Lanham Act Cases
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In the fall of 2020, Congress passed the COVID-19 stimulus package as part of the Consolidated Appropriations Act. Although stimulus checks received the bulk of press coverage, the bill included amendments to the Lanham Act, referred to as The Trademark Modernization Act of 2020, that established a presumption of irreparable harm for violations of the Lanham Act—effectively overruling the Supreme Court’s 2006 decision in eBay Inc. v. MercExchange, 547 U.S. 388 (2006), holding that there is no presumption of irreparable harm in patent infringement cases, which several courts had extended to trademark infringement actions.

The statutory language now reads:

The several courts vested with jurisdiction of civil actions arising under this chapter shall have power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office or to prevent a violation under subsection (a), (c), or (d) of section 1125 of this title. A plaintiff seeking any such injunction shall be entitled to a rebuttable presumption of irreparable harm upon a finding of a violation identified in this subsection in the case of a motion for a permanent injunction or upon a finding of likelihood of success on the merits for a violation identified in this subsection in the case of a motion for a preliminary injunction or temporary restraining order.

15 U.S.C. § 1116(a) (emphasis added).

This new presumption of irreparable harm became effective in December 2020. Yet, in the over nine months since then, the majority of courts ruling on motions for injunctive relief in Lanham Act cases have not noted this change and have instead continued to apply eBay. Had movants in these cases notified their courts of the statutory amendment in moving for relief, it is likely the results in several would have been different.

In fact, in at least three cases (as of the date of this writing), the courts determined the movant had not sufficiently shown irreparable harm and denied injunctive relief. See, e.g., Dynatemp Int'l, Inc. v. R421A, LLC, No. 5:20-CV-142-FL (E.D.N.C. July 30, 2021); Sec. USA Servs., LLC v. Invariant Corp., No. 1:20-CV-01100-KWR-KRS, 2021 WL 2936612, at *5 (D.N.M. July 13, 2021); Zamfir v. Casperlabs, No. 21-CV-474-GPC(AHG) (S.D. Cal. Mar. 26, 2021). In these cases, the courts did not acknowledge the statutory presumption—perhaps because they were unaware of the change.

It is likely that had movant argued for application of the presumption and made it known to the court, the results in these cases would have been different, and the courts would have issued injunctions (instead of denying them). Indeed, courts explicitly taking note of the presumption have overwhelmingly granted injunctive relief. See, e.g., Bisous LLC v. The CLE Group, LLC, No. 3:21-CV-1614-B (N.D. Tex. Aug. 16, 2021); SoClean, Inc. v. Sunset Healthcare Solutions, Inc., No. 1:20-CV-10351-IT (D. Mass. Aug. 13, 2021); Tee Turtle v. Christina Swartz, No. 2:21-CV-01771 (S.D. Ohio June 9, 2021).

The key insight for practitioners in Lanham Act cases is this: Congress has established a potent presumption of irreparable harm that applies to trademark infringement and false advertising cases. Those who move for injunctive relief would do well to point to this presumption in support of their motions. Those who oppose injunctive relief will likely need to expend additional efforts either rebutting the presumption of irreparable harm, or in more forcefully countering the movant’s showing of a likelihood of success on the merits—the linchpin for application of the statutory presumption. Knowing this and taking proactive steps to address the changed landscape—whichever side you’re on—will increase the odds of success.