Under continental European law, a person whose rights have been infringed has the right to demand that the infringer cease the unlawful act. Only in very special and practically rare circumstances will the court not issue an injunction. The situation is different in the USA. There, the court must carry out an equity test before it can issue an injunction.
The specific case concerned a dispute over incorrect statements in a comparative advertisement. Watson Pharmaceuticals Inc. organized a presentation, which was also recorded on video and posted on the internet. During the presentation, Dr. Silverberg compared the Watson product “Crinone” with the product “Endometrin” from Ferring. Several of his statements were incorrect or at least misleading. Ferring filed a Lawsuit against Watson for unfair competition and demanded an injunction against the incriminating statements. Ferring also applied for a temporary injunction.
Shortly after the legal dispute began, Dr. Silverberg made an affidavit stating that he would no longer make the disputed or erroneous statements. Nevertheless, Ferring demanded that the Watson company also be banned.
The District Court denied Ferring’s request for injunctive relief because Ferring had not shown that it was likely to suffer irreparable harm if the injunction was not granted. Ferring appealed this decision to the Court of Appeals for the Federal Circuit (CAFC).
The CAFC rejects Ferring’s appeal and thus confirms the judgment of the court of first instance. In doing so, it considers the following:
A ban is a serious measure that must therefore be applied with caution. Whether or not a ban is issued depends on equity considerations (principle of equity). A precautionary ban is also an extraordinary measure that should only be granted in narrowly defined circumstances.
Under settled Federal Circuit jurisprudence for the 3rd Circuit, a plaintiff seeking a precautionary measure must show:
– that he is likely to succeed on the merits,
– that he is likely to suffer irreparable harm if a ban is not imposed (likely to suffer irreparable harm),
– that equitable considerations are in its favor and
– that a ban is in the public interest.
Since the court must make equitable considerations, the specific circumstances must be taken into account. It is therefore not permissible to make a general assumption. The fact that there is damage that cannot easily be made good cannot therefore be assumed. Rather, the Lawsuit must show in the specific case that it would probably suffer damage that could not be easily remedied if the requested ban were not imposed.
Furthermore, the CAFC emphasizes that the application of equitable considerations is a very fundamental principle in procedural law. It therefore does not matter whether a prohibition is sought under Competition Law, Patent Law or Trademark Law.
This judgment makes it clear that an IP right holder in the USA must make a plausible case for irreparable harm not only in the case of a temporary ban (preliminary injunction) but also in the case of a permanent ban.