Third Circuit Rejects Presumption Of Irreparable Harm In Lanham Act Cases

In a precedential decision issued this week, Ferring Pharmaceuticals v. Watson Pharmaceuticals, the U.S. Court of Appeals for the Third Circuit joined the Ninth Circuit in rejecting the presumption of irreparable harm for plaintiffs seeking a preliminary injunction in Lanham Act false advertising and trademark infringement cases.

While most courts have discarded the presumption of irreparable harm in patent or copyright cases following the United States Supreme Court's decisions in eBay v. MercExchange, 547 U.S. 403 (2006), and Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008), application of the presumption in the trademark context has been inconsistent—due in large part to differences between trademark and other intellectual property rights.

A petition for certiorari in the Ninth Circuit's decision on this issue is currently pending before the U.S. Supreme Court and could provide needed guidance in this area of the law. Until then, trademark litigants in the Third Circuit need to be mindful of the court's newly pronounced position in determining strategy in Lanham Act cases.

The Presumption

Before 2006, it was well established that a Lanham Act plaintiff seeking a preliminary injunction in a trademark infringement case earned a presumption of irreparable harm upon a showing of likelihood of success on the merits. The rebuttable evidentiary presumption arises from the premise that harms caused by false advertising and trademark violations are noneconomic and intangible. A trademark owner's reputation, loss of control, or goodwill-based injury is distinct from a copyright or patent owner's economic injury. The Lanham Act prohibits a mere likelihood of confusion, and a trademark owner's injury cannot be readily measured by diverted sales or disgorgement of a defendant's ill-gotten gain and is inherently irreparable. By the time that actual injury to goodwill has occurred or the harm can be quantified, courts have found that it may be too late.

Trademark cases are also different because courts have held that in addition to the protection afforded to the trademark owner, the presumption of irreparable harm benefits the consuming public. A preliminary injunction is seen by some as a way to correct misinformation in the market as quickly as possible, allowing the public to accurately identify brands and distinguish among products.

Background and Procedural History of Ferring

The dispute between Ferring and Watson, competing...