The Ninth Circuit Court of Appeals has eliminated the presumption of irreparable harm when trademark owners seek preliminary or permanent injunctions against alleged infringers.
This means that trademark owners must now show that they would suffer actual irreparable harm in order to obtain injunctions.
The case of Herb Reed Enterprises, LLC v. Fla. Ent. Mgmt. Inc. involved the musical group “The Platters,” founded in the 1950s and known for hits like “Smoke Gets in Your Eyes” and “Only You.”
Herb Reed was one of the founders of the group. After it broke up in the 1960s, its members continued to perform using different versions of the name “The Platters.”
Employment contracts signed in 1956 between the original members of the group and their manager’s company assigned rights in the name “The Platters” to the company in exchange for company stock.
Litigation over the validity of these contracts and ownership rights in the group’s name has dragged on for more than 40 years.
In this most recent case, defendant Florida Entertainment Management challenged a district court’s order enjoining the defendant from using “The Platters” in conjunction with any vocal group.
The US Supreme Court in eBay v. MercExchange effectively eliminated the presumption of irreparable harm for plaintiffs seeking preliminary injunctions in patent cases. Other courts have also eliminated the presumption for copyright cases, but the circuits have been divided on whether the presumption applies in trademark cases.
Before the latest Herb Reed decision, the law on this issue for the Ninth Circuit (which includes California) was likewise unsettled.
In order to establish irreparable harm, a trademark owner must show that “remedies available at law, such as monetary damages, are inadequate to compensate” for the injury arising from infringement.
Although the Ninth Circuit found that the district court had applied the correct legal principle in the Herb Reed case, it concluded that the record did not support a finding of the likelihood of irreparable harm.