MPT, Inc. v. Marathon Labels, Inc. [PDF], 2007 WL 184747, N.D. Ohio, decided Jan. 19, 2007 by Judge Gaughan.
The core holding of eBay is that a plaintiff must demonstrate the following four factors for a court to exercise its equitable discretion to grant a permanent injunction: (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.
The Court found irreparable injury because the plaintiff had Ã¢â?¬Å?established a strong market position and customer goodwill.Ã¢â?¬Â? Judge Gaughan cited to Basicomputer Corp. v. Scott, 973 F.2d 507 (6th Cir. 1992), which said Ã¢â?¬Å?[t]he loss of customer goodwill often amounts to irreparable injury because the damages flowing from such losses are difficult to compute.Ã¢â?¬Â? This statement seems questionable. Irreparable harm does not necessarily follow because damages are hard to compute, right? Furthermore, a competitor Ã¢â?¬Å?usurpingÃ¢â?¬Â? some market share doesnÃ¢â?¬â?¢t necessarily cause plaintiff to lose goodwill. If a plaintiff does not have significant market share and goodwill, does that mean they are less deserving of an injunction? The holding in eBay was meant to remove the presumption of irreparable harm. Perhaps Justice RobertsÃ¢â?¬â?¢ concurring opinion in eBay sanctioned this argument that a competitorÃ¢â?¬â?¢s competing (by infringing) in the market causes irreparable harm. The third factor may have been controlling here, which caused the Court to essentially assert a permanent injunction was proper. Judge Gaughan noted:
Only 10-15 percent of MarathonÃ¢â?¬â?¢s total business consists of sales of Smart Surface Placards. A large percentage of those are sold to Mexico and are not subject to an injunction. Thus, only a small percentage of MarathonÃ¢â?¬â?¢s total sales will be prohibited by an injunction.
Without saying so, Judge Gaughan seems to follow Justice Roberts advice more so than Justice Kennedy by generally favoring the grant of permanent injunction. This holdings seems correct Ã¢â?¬â?? it feels right Ã¢â?¬â?? but the four factor equitable test may not have been rigorously applied.