The Path of the Trademark Injunction

Prior to decisions by the Supreme Court of the United States in eBay, Inc. v. MercExchange, L.L.C. and Winter v. NRDC, appellate courts routinely affirmed the exercise of discretion by district courts to grant injunctive relief in trademark cases. Indeed, if trademark owners made out a prima facie case of infringement, courts presumed the mark owner would suffer irreparable harm in absence of injunctive relief. eBay invoked traditional principles of equity in upending the standard presumption in favor of injunctions in patent cases. Winter urged application of eBay’s four-factor test in all evaluations of injunctive relief. U.S. Courts of Appeals applied eBay’s teaching inconsistently in trademark cases. But the odds of securing an injunction in trademark cases have declined following a crucial decision by the Court of Appeals for the Ninth Circuit, Herb Reed Enters., LLC v. Fla. Entm’t Mgmt., Inc., which embraced a rigid interpretation of eBay in the trademark context.In late 2020, as part of an omnibus spending bill, Congress passed and the President signed into law the Consolidated Appropriations Act of 2021. The Act revised the language of 15 U.S.C. § 1116, the provision governing courts’ equitable discretion to grant injunctive relief in trademark litigation. The amended language restores the presumption of irreparable harm in both pre- and post-trial contexts. Congress effectively restored the rebuttable presumption of irreparable harm when the mark owner makes out its (prima facie) case of trademark infringement.This chapter explains that restoring the presumption will generally lead to more efficient outcomes. In trademark cases, the harm suffered by the mark owner is difficult to remedy with damages because damages are difficult to calculate. In addition, courts frequently refuse to order damages even when the plaintiff establishes a violation of the Lanham Act. In light of this reality, reestablishing the presumption will likely reduce error and better thwart opportunism, fraud, and deception and thus would be favored on efficiency grounds.The restored presumption is also consistent with traditional principles of equity as they were applied in 19th century trademark cases. Indeed, had Congress not revised federal trademark law, the best application of traditional principles would nontheless lead courts to readily embrace the presumption in core cases of point-of-sale confusion vis-à-vis similar marks used on competing goods. These cases reached correct results historically, and courts will likely also reach correct results more consistently under the restored presumption. Indeed, truly reclaiming traditional principles of equity requires providing courts with flexibility to craft injunctions both sufficiently broad and no broader than necessary to protect the plaintiff’s rights