On August 3, 2011, the 9th Circuit Court of Appeals, in the case Perfect 10, Inc. v. Google, Inc. made a major change relating to copyright law that will affect litigation strategy from now on. Basically, the 9th Circuit (shockingly agreeing with the 2nd Circuit), decided that Courts would no longer consider a finding of “likelihood of success on the merits” automatically leads to a finding that the Plaintiff would suffer irreparable harm if an injunction is not granted.
A little background: Plaintiff’s in copyright infringement lawsuits like to get preliminary injunctions because it will usually end the case immediately, without having to spend any additional time or money going to trial. As I’ve discussed in earlier posts, a preliminary injunction granted against Warner Brothers to stop distribution of The Dukes of Hazard movie, let to a $17.5 million dollar settlement two days later. So for Plaintiff’s, they are a very powerful tool.
When a court is deciding whether to grant a preliminary injunction, it must consider the following four factors:
(1) that the Plaintiff is likely to succeed on the merits,
(2) that he is likely to suffer irreparable harm in the absence of preliminary relief,
(3) that the balance of equities tips in his favor, and
(4) that an injunction is in the public interest.” Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 374 (2008).
While proving that he is likely to succeed on the merits is usually where the meat of the fight lies, until now Plaintiffs in the 9th Circuit were helped by a 1984 case, Apple Computer, Inc. v. Formula International, Inc., 725 F.2d 521 (9th Cir. 1984), where the Court held that “[a] showing of a reasonable likelihood of success on the merits in a copyright infringement claim raises a presumption of irreparable harm” for purposes of a preliminary injunction.
The Apple case meant that once a Plaintiff showed a likelihood of success, he could pretty much skip right over the second prong and go to prongs 3 and 4. This also meant that the courts granted a lot of preliminary injunctions. It also led to cases similar to the recent lawsuit against the producers of Hangover II for copying the Mike Tyson tattoo onto Ed Helms’s face, in which the tattoo artist tried to get a preliminary injunction against the release of the film. If a preliminary injunction was granted, it would have potentially cost Warner Brothers hundreds of millions of dollars. The tattoo artist’s strategy was to obtain the preliminary injunction, and then use that to force a settlement that would have been even higher than the one for The Dukes of Hazard. Although you would be hard pressed to argue that the damages attributable to the infringement were anywhere close to that figure.
But imagine if that case was heard in the 9th Circuit under these new standards. It becomes much harder for the tattoo artist to argue that the release of the movie will cause him “irreparable harm” that can’t be compensated with mere money.
I believe that writers whose work is stolen will still be able to get injunctions using this new standard, because the release of a motion picture that infringes someone else’s script would completely devalue the script. But for cases that involve the use of someone else’s material in a movie (such as artwork on a wall in the background), it will become much, much harder to convince a court that the harm is irreparable.
If you would like to read the decision, you can do so here.