In eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837 (2006), the United States Supreme Court affirmed the application to patent law of the traditional four factors a plaintiff must show when seeking an injunction, overruling the Federal CircuitÃ¢â?¬â?¢s practice of awarding such injunctions in all but exceptional circumstances. The Supreme Court suggested that its decision harmonized patent law with the approach taken in copyright law. This article examines copyright jurisprudence to determine what effect the application of that approach would have on requests for patent injunctions.
A. eBay Inc. v. MercExchange: Patent Injunctions Like Copyright Injunctions
In eBay Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837 (2006), the Supreme Court affirmed the application of the traditional four-factor test and set out the elements a plaintiff must show to obtain a permanent injunction:
[A] plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
Id. at 1839. In so doing, the Supreme Court rejected the approaches of both the district court and the Federal Circuit. The district court “concluded that a Ã¢â?¬Ë?plaintiffÃ¢â?¬â?¢s willingness to license its patentsÃ¢â?¬â?¢ and Ã¢â?¬Ë?its lack of commercial activity in practicing the patentsÃ¢â?¬â?¢ would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue.” Id. at 1840 (internal citations omitted). The Supreme Court held that “traditional equitable principles do not permit such broad classifications.” Id. The Federal Circuit, on the other hand, “articulated a Ã¢â?¬Ë?general rule,Ã¢â?¬â?¢ unique to patent disputes, Ã¢â?¬Ë?that a permanent injunction will issue once infringement and validity have been adjudged.Ã¢â?¬â?¢” Id. at 1841 (internal citations omitted). The Supreme Court held that “[j]ust as the District Court erred in its categorical denial of injunctive relief, the Court of Appeals erred in its categorical grant of such relief.” Id. In arriving at these holdings, the Court suggested it was harmonizing patent and copyright law:
This approach is consistent with our treatment of injunctions under the Copyright Act… . And as in our decision today, this Court has consistently rejected invitations to replace traditional equitable considerations with a rule that an injunction automatically follows a determination that a copyright has been infringed.
Id. at 1840.
B. What Does Copyright Jurisprudence Teach Us?
1. Injunctive Relief Is Often Granted.
Copyright jurisprudence suggests that eBay may not work a dramatic change in the availability of injunctive relief, however. Of the four factors the eBay court required a plaintiff to show on a motion for a permanent injunction, prevailing copyright jurisprudence allows the plaintiff a greatly reduced burden on each. Irreparable injury. The prevailing view is that, “[i]n a copyright infringement action,… a showing of a reasonable likelihood of success on the merits raises a presumption of irreparable harm.” LGS Architects, Inc. v. Concordia Homes of Nev., 434 F.3d 1150, 1155-56 (9th Cir. 2006); see also Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1254 (3d Cir. 1983) (overturning district court for its “fail[ure] to consider the prevailing view that a showing of a prima facie case of copyright infringement or reasonable likelihood of success on the merits raises a presumption of irreparable harm”). Damages inadequate. It is also the prevailing view that monetary damages, even when uncontested, are inadequate to compensate for copyright infringement:
Because Taylor had a legal remedy available to it, i.e., uncontested damages in the amount of $45,976.95, the question then becomes whether Taylor was entitled to seek purely equitable relief in the form of a permanent injunction. It is well-established that a party is entitled to equitable relief only if there is no adequate remedy at law. However, in copyright infringement actions, the denial of a request for injunctive relief could otherwise amount to a forced license to use the creative work of another. Taylor certainly has the right to control the use of its copyrighted materials, and irreparable harm inescapably flows from the denial of that right. We therefore hold Taylor was entitled to seek only injunctive relief, despite the availability of uncontested damages.
Taylor Corp. v. Four Seasons Greetings, LLC, 403 F.3d 958, 967 (8th Cir. 2005) (emphasis added; internal citations and quotation marks omitted); see also Cadence Design Sys. v. Avant! Corp., 125 F.3d 824, 827 (9th Cir. 1997) (“[A]vailability of money damages is not a reason to deny injunctive relief.”). Hardship balance. Copyright law likewise gives short shrift to a defendantÃ¢â?¬â?¢s complaints as to the burdens imposed by permanent injunctive relief:
[E]ven assuming the injunction would have… a devastating effect on [the defendant], the judge adopted the reasoning of other courts that a knowing infringer cannot be permitted to construct its business around its infringement… . [T]he district judge adopted the view that the potential injury to an allegedly infringing party caused by an injunction merits little equitable consideration and is insufficient to outweigh the continued wrongful infringement. We agree that placing too much weight on this factor would reward infringers.
Autoskill, Inc. v. NatÃ¢â?¬â?¢l Educ. Support Sys., 994 F.2d 1476, 1499 (10th Cir. 1993). Public interest. Finally, courts have held that “[s]ince Congress has elected to grant certain exclusive rights to the owner of a copyright in a protected work, it is virtually axiomatic that the public interest can only be served by upholding copyright protections and, correspondingly, preventing the misappropriation of the skills, creative energies, and resources which are invested in the protected work.” Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240, 1254-55 (3d Cir. 1983). As is evident, then, the application of copyright jurisprudence would not appear to yield substantially different results than the approach exemplified in the Federal Circuit opinion eBay overturned.
2. Copyright Injunctions Are Nevertheless Sometimes Denied.
That is not to say copyright injunctions are granted automatically. eBay itself rejects such a proposition. See eBay, 126 S. Ct. at 1840. (“[T]his Court has consistently rejected … a rule that an injunction automatically follows a determination that a copyright has been infringed.”). Injunctive relief is sometimes denied in the following circumstances: No risk of future infringement. “[I]njunctive relief ordinarily will not be granted… when there is no probability or threat of continuing or additional infringements.” 4 Nimmer on Copyright Ã?Â§ 14.06[B] (2006); see also Harolds Stores v. Dillard DepÃ¢â?¬â?¢t Stores, 82 F.3d 1533, 1556 (10th Cir. 1996) (“Because HaroldÃ¢â?¬â?¢s has failed to demonstrate a threat of continuing infringement, it is not entitled to a permanent injunction… .”). That said, “[t]he requirement that a the plaintiff show a likelihood of continued infringement is not particularly rigorous… and courts generally resolve any doubts about future infringement in favor of granting injunctive relief.” 2 Goldstein on Copyright Ã?Â§ 126.96.36.199 (3d ed. 2005). Credible (but ultimately unsuccessful) fair use defense. Courts tend to treat cases involving a credible fair use defense more carefully, because of the potential First Amendment issues involved. The Supreme Court itself has cautioned:
Because the fair use enquiry often requires close questions of judgment as to the extent of permissible borrowing in cases involving parodies (or other critical works), courts may also wish to bear in mind that the goals of the copyright law, Ã¢â?¬Ë?to stimulate the creation and publication of edifying matter,Ã¢â?¬â?¢ are not always best served by automatically granting injunctive relief when parodists are found to have gone beyond the bounds of fair use.
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 578 n.10 (1993) (dicta); compare with Video Pipeline, Inc. v. Buena Vista Home EntmÃ¢â?¬â?¢t, Inc., 342 F.3d 191, 207 (3rd Cir. 2003) (granting injunction over verbatim copying because fair use not implicated, citing Campbell). Minimal Contribution to Infringing Work. Some courts have denied injunctive relief where the plaintiffÃ¢â?¬â?¢s copyrighted element contributes little to the infringing work. Silverstein v. Penguin Putnam, Inc., 368 F.3d 77, 84 (2d Cir. 2004) (“[A]ny protectible interest Silverstein may have would be so slight that it cannot properly be enforced by a preliminary or permanent injunction.”); see also Dun v. LumbermenÃ¢â?¬â?¢s Credit AssÃ¢â?¬â?¢n, 209 U.S. 20, 23-24 (1908) ([“T]he proportion is so insignificant compared with the injury from stopping appelleesÃ¢â?¬â?¢ use of their enormous volume of independently acquired information, that an injunction would be unconscionable. In such cases the copyright owner should be remitted to his remedy at law.”). Various commentators speak favorably of this approach. See, e.g., 4 Nimmer on Copyright Ã?Â§ 14.06[B] (discussing Silverstein with approval); Goldstein on Copyright Ã?Â§ 188.8.131.52 (noting that injunction against work in which copyrighted portion plays small part may allow copyright holder to inappropriately extract “some of the workÃ¢â?¬â?¢s value that is attributable to the defendantÃ¢â?¬â?¢s independent effort”). These grounds may help to predict the scope of future patent jurisprudence. Indeed, one of the first opinions to date that directly addresses eBay in this context denied injunctive relief on the grounds that: (i) the patented technology played a very small role in defendantÃ¢â?¬â?¢s products; and (ii) the defendant intended to phase out its use of the technology in its next product release. z4 Techs., Inc. v. Microsoft Corp., No. 6:06-CV-142, 2006 U.S. Dist. LEXIS 40762, *3, *8 (E.D. Tex. June 14, 2006); see also 3M Innovative Props. Co. v. Avery Dennison Corp., No. 01-1781, 2006 U.S. Dist. LEXIS 70263, *4-*5 (D. Minn. Sept. 25, 2006) (granting injunction in light of plaintiffÃ¢â?¬â?¢s consistent refusal to license patent, citing eBay); Voda v. Cordis Corp., No. CIV-03-1512-L, 2006 U.S. Dist. LEXIS 63623, *18 (W.D. Okla. Sept. 5, 2006) (denying injunction because plaintiff “failed to demonstrate either irreparable injury or that monetary damages are inadequate” and, in light of eBay was no longer entitled to any presumption of such); Paice LLC v. Toyota Motor Corp., No. 2:04-CV-211-DF, 2006 WL 2385139 (E.D. Tex. Aug. 16, 2006) (denying injunction, citing eBay, z4 Techs.); Finisar Corp. v. DirecTV Group, No. 1:05-CV-264, 2006 U.S. Dist. LEXIS 76380, *4 (E.D. Tex. July 7, 2006) (denying injunction).1
C. What Does eBay Teach Copyright Jurisprudence?
It is notable that the z4 Techs. court was offered the copyright apple, but declined to bite:
z4Ã¢â?¬â?¢s arguments for the application of a presumption of irreparable harm [based on copyright jurisprudence] are creative, but z4 cannot cite to any Supreme Court or Federal Circuit case that requires the application of a rebuttable presumption of irreparable harm with regard to a permanent injunction. In Amoco Production, the Supreme Court stated that applying a presumption of irreparable harm in the context of an injunction “is contrary to traditional equitable principles.”… z4Ã¢â?¬â?¢s suggestion, that the right to exclude creates a presumption of irreparable harm, is not in line with the Supreme CourtÃ¢â?¬â?¢s holding, which mandates that courts balance the traditional principles of equity when considering the remedy of a permanent injunction in patent cases. Accordingly, the Court does not apply a presumption of irreparable harm.
z4 Techs., 2006 U.S. Dist. LEXIS 40762, *6-*7 (citations omitted). This decision suggests that a contrary result could obtain: instead of copyright jurisprudence hamstringing the promise of eBay, eBay could signal an end to the easy ride copyright plaintiffs have gotten. The only instructive copyright cases are at loggerheads:
- Tillery v. Leonard & Sciolla, LLP, No. 05-6182, 2006 U.S. Dist. LEXIS 38145 (E.D. Pa. June 9, 2006), noted that eBay “casts doubt on the continued validity” of the view that “[i]f Ã¢â?¬Ë?the plaintiff makes a strong showing of likely confusion [on a federal unfair competition claim], irreparable injury follows as a matter of course.Ã¢â?¬â?¢”
- Disney Enters., Inc. v. Delane, No. DKC 2005-1291, 2006 U.S. Dist. LEXIS 59076, *12-*14 (D. Md. July 28, 2006), citing eBay, likewise required the plaintiff to meet each of the four factors before granting an injunction. See also Lava Records, LLC v. Ates, No. 05-13142006 U.S. Dist. LEXIS 46683 (W.D. La. July 11, 2006) (same).
- Busch v. Seahawk Software Dev., L.L.C., No. CV 04-0425-PHX-PGR, 2006 U.S. Dist. LEXIS 39484, *13-*14 (D. Ariz. June 12, 2006), on the other hand, cited eBay, then nevertheless dutifully granted injunctive relief, based on the presumptions concerning irreparable harm, adequacy of damages, balance of hardships, and public interest in favor of the copyright holder where infringement is shown.
- CBS Broad., Inc. v. EchoStar Communs. Corp., 450 F.3d 505, 518 (11th Cir. 2006), cited eBay in an unrelated portion of the opinion, then went on to hold that “[u]nder the Copyright Act… a plaintiff need not show irreparable harm in order to obtain a permanent injunction, so long as there is past infringement and a likelihood of future infringement.”
Many commentators have reacted to the eBay decision with a prediction that it will result in the issuance of fewer injunctions in patent cases. While that result cannot help but obtain (in that such injunctions were previously all but automatic), copyright jurisprudence suggests that injunctive relief will still be a very common result of a finding of infringement. That said, only time will tell eBayÃ¢â?¬â?¢s true effect. The first decision in its wake Ã¢â?¬â?? z4 Techs. Ã¢â?¬â?? suggests perhaps that instead of copyright jurisprudence acting to insure patent injunctive relief remains common, patent jurisprudence may work to make copyright injunctions less so.
1 Compare with Litecubes, L.L.C. v. N. Light Prods., Inc., No. 4:04CV00485 ERW, 2006 U.S. Dist. LEXIS 60575 (E.D. Mo. Aug. 25, 2006) (granting injunction); TiVo Inc. v. EchoStar Comms. Corp., No. 2:04 CV 1 DF., 2006 WL 2398681 (E.D. Tex. Aug. 17, 2006) (same); Telequip Corp. v. Change Exch., 5:01-CV-1748, 2006 U.S. Dist. LEXIS 61469 (N.D.N.Y. Aug. 15, 2006) (citing eBay, but then granting injunction because “monetary damages are not an adequate remedy against future infringement because the principal value of a patent is its statutory right to exclude,” relying on pre-eBay cases). A prior version of this article appeared in IPLaw 360 on August 30, 2006.