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Client Alerts

Don’t Presume Anything: Copyright Holders Must Establish Irreparable Harm to Be Entitled to an Injunction

May 13, 2010

Client Alerts

Don’t Presume Anything: Copyright Holders Must Establish Irreparable Harm to Be Entitled to an Injunction

May 13, 2010

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The Second Circuit issued a critical decision on April 30, setting forth a new standard for preliminary injunctions in copyright infringement cases and hindering the efforts of J.D. Salinger’s Literary Trust to prevent U.S. sales of Swedish author Fredrik Colting’s 60 Years Later: Coming Through the Rye—an unauthorized “sequel” to J.D. Salinger’s celebrated Catcher in the Rye.

In the Second Circuit, U.S. copyright owners now must contend with a heightened standard to obtain preliminary injunctive relief against infringers.

The 2009 District Court Decision

In July 2009, Salinger obtained a preliminary injunction from the United States District Court of the Southern District of New York, barring Mr. Colting from selling Coming Through the Rye in the United States. After a lengthy analysis of Colting’s fair use defense, in which the court recognized that it was “likely” that the publication of Colting’s book would “harm the potential market value for sequels or other derivative works based upon” Salinger’s Catcher in the Rye, the court enjoined all exploitation of Colting’s book, stating that “[b]ecause Plaintiff has established a prima facie case of copyright infringement, irreparable harm from the infringement is presumed.”

The 2010 Second Circuit Decision

On April 30, 2010, the Second Circuit Court of Appeals vacated the district court’s preliminary injunction order. The Second Circuit determined that a presumption of irreparable harm—rather than a finding of irreparable harm—is an improper basis upon which to grant injunctive relief in light of the U.S. Supreme Court’s holding in eBay, Inc. v. MercExchange, 547 U.S. 388 (2006). In eBay, the Supreme Court rejected the practice long conducted by courts of granting permanent injunctions in patent infringement cases as a “’general rule … once infringement and validity [of the patent] have been adjudged.’” The Supreme Court’s unanimous decision in eBay made clear that a grant of injunctive relief requires a plaintiff to demonstrate, among other things, that it has suffered an irreparable injury.

The Second Circuit also relied on the Supreme Court’s 2008 decision in Winter v. Natural Resources Defense Council, 129 S. Ct. 365 (2008), which required the application of the same strict principles of equity described in eBay to the preliminary injunction context.

The Second Circuit extended the Supreme Court’s holding in eBay to copyright plaintiffs seeking preliminary injunctive relief and unequivocally stated that the four-factor test articulated by the Supreme Court as to when an injunction may issue “applies with equal force to preliminary injunctions issued on the basis of alleged copyright infringement.” It cautioned against presuming irreparable harm once a likelihood of success on the merits is shown, and it acknowledged that a copyright owner may be adequately compensated by monetary damages—rather than an injunction—upon a final resolution of the copyright infringement claim.

Remanding the case for reconsideration of whether a preliminary injunction should issue, the Second Circuit held that, while the district court applied the Second Circuit’s long-standing standard for preliminary injunctions in copyright cases, that standard was inconsistent with, and had been abrogated by, eBay.

Going forward, when determining whether to grant a preliminary injunction in a copyright infringement case, courts in the Second Circuit are required to review four factors: First, the court may issue a preliminary injunction only if the plaintiff demonstrates either (a) a likelihood of success on the merits, or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the plaintiff’s favor. Second, the plaintiff must demonstrate that it is likely to suffer irreparable injury in the absence of an injunction, and irreparable injury cannot be presumed. Third, the court may issue an injunction only if the balance of hardships tips in plaintiff’s favor. Fourth, granting the injunction cannot disserve the public interest.

The Second Circuit explained that the harm “relevant” to a court’s preliminary injunction analysis is the harm that occurs to a copyright owner’s legal interests—that which cannot be remedied by monetary damages or a permanent injunction issued at the end of the case. Legal interests, according to the Second Circuit, equate to commercial interests: “[T]he justification of the copyright law is the protection of the commercial interest of the artist/author. It is not to coddle artistic vanity or to protect secrecy, but to stimulate creation by protecting its rewards.”

What does the Second Circuit’s opinion mean for copyright owners?

Undoubtedly, at least in the Second Circuit, preliminary injunctive relief will be more difficult to obtain. Moving forward, it will be important for copyright owners to thoroughly consider and explain how they are irreparably harmed by infringement and, more important, how monetary remedies are incapable of repairing that harm. The question then becomes, what circumstances cannot be remedied by money? Destruction to one’s reputation, a right to attribution, and a right to protect the integrity of one’s work are just a few that come quickly to mind. But such rights are akin to those protected by “moral rights,” a doctrine that receives scant recognition in the United States.

The Second Circuit, in borrowing a theme from trademark law, suggested that “[i]n the context of copyright infringement cases, the harm to the plaintiff’s property interest has often been characterized as irreparable in light of possible market confusion.” Additionally, the Second Circuit submitted that “‘[t]he loss of First Amendment freedoms,’ and hence infringement of the right not to speak, ‘for even minimal periods of time, unquestionably constitutes irreparable injury.’”

How courts will entertain claims of irreparable harm in the copyright context has yet to be seen. What is clear is that, at least in the Second Circuit, copyright holders may no longer rely on the presumption of irreparable harm that normally arose upon a showing of likelihood of success on the merits. Instead, preliminary injunctions require a showing of each of the equitable principles without the benefit of any presumption.

Contact:
Principal
New York office
mccallion@fr.com
212-641-2261

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