In Herb Reed Enters., LLC v. Fla. Entm’t Mgmt., No. 12-16868, 2013 WL 6224288 (9th Cir. Cal. Dec. 2, 2013), the Ninth Circuit joined other circuits in ruling that trademark owners no longer enjoy a presumption of irreparable harm when seeking a preliminary injunction.
Trademark plaintiffs in the Ninth Circuit long-relied on the principle that once they demonstrated a likelihood of success on the merits of their infringement claims, they would enjoy a presumption of irreparable harm. While the Ninth Circuit had already applied the rulings in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) (no presumption of harm in the patent permanent injunction context) and Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (requiring that a plaintiff establish that it will actually suffer irreparable harm absent a preliminary injunction) to reject the presumption of irreparable harm in obtaining a preliminary injunction in a copyright case (Flexible Lifeline Systems, Inc. v. Precision Lift, Inc., 654 F.3d 989 (9th Cir. 2011)), and in obtaining a permanent injunction in a trademark case (Reno Air Racing Ass’n, Inc., v. McCord, 452 F.3d 1126, 1137-38 (9th Cir. 2006)), it appeared reluctant to do so in the trademark preliminary injunction context. Its opinion in the Herb Reed Enterprises, LLC v. Florida Entertainment Management case has now affirmatively done just that.
Herb Reed Enterprises involved trademark rights to the “The Platters,” the name of the 1950’s music group. The band broke-up in the 1960’s, but each member continued to perform under some variation of the name “The Platters.” As a result, litigation ensued, and there have been multiple legal disputes among the original members and their current and former managers over ownership of “The Platters” mark. In the underlying dispute, plaintiff obtained a preliminary injunction barring use of the name “The Platters” in connection with any vocal group, and the defendants appealed.
The Ninth Circuit affirmed the district court’s holding that plaintiff demonstrated a likelihood of success on the merits, but after reviewing the precedents of eBay, Winter, Flexible Lifeline Systems, and Reno Air, held that the district court abused its discretion in finding irreparable harm because the “imposition of the irreparable harm requirement for a permanent injunction in a trademark case applies with equal force in the preliminary injunction context.” Herb Reed Enters., LLC, 2013 WL 6224288, at *8.
The Ninth Circuit held that while the district court correctly recognized that Winter requires a plaintiff to establish that it will actually suffer irreparable harm absent a preliminary injunction, it nonetheless issued a preliminary injunction without first making the requisite factual findings. The Ninth Circuit held doing so was an abuse of discretion because it had “the practical effect” of revising “the now rejected presumption of irreparable harm based solely on a strong case of trademark infringement.” Herb Reed Enters., LLC, 2013 WL 6224288, at *9.
It is noteworthy that although the district court specifically considered plaintiff’s arguments regarding “loss of control over business reputation and damage to goodwill” – and the Ninth Circuit acknowledged that evidence of loss of control over business reputation and damage to goodwill could constitute irreparable harm – the Ninth Circuit nonetheless held that the district “court’s pronouncements [were] grounded in platitudes rather than evidence.” Herb Reed Enters., LLC, 2013 WL 6224288, at *8. The Ninth Circuit even rejected the evidence of actual confusion that plaintiff submitted in support of irreparable harm. Herb Reed Enters., LLC, 2013 WL 6224288, at *9.
Based on the new standard set forth in Herb Reed Enterprises, a trademark plaintiff seeking a preliminary injunction will now have to submit concrete and ample evidence of the irreparable harm and damage to goodwill it claims it will suffer in the absence of a preliminary injunction, or risk that the district court will deny the preliminary injunction – or that the Ninth Circuit will reverse the district court based on its holding in Herb Reed Enterprises. By contrast, trademark defendants now have a new arsenal of arguments to make in opposing a preliminary injunction – attacking plaintiff’s evidence of irreparable harm as insufficient or speculative.