The past two months have seen significant Lanham Act decisions addressing the evolving post-eBay standards for granting an injunction, the distinction between advertising and protected statements of scientific opinion and the interplay between copyright and false endorsement law where an advertisement includes unauthorized music. We also address two significant patent-law issues: the proper role of the infringer's real-world profits in the calculation of a reasonable royalty and the inclusion of a prior invention in an obviousness analysis.

False Advertising Injunction

In 2006, the Supreme Court sent shockwaves through the intellectual property bar when it ruled in eBay v. MercExchange, 547 U.S. 388 (2006) that irreparable harm should not be presumed when a patent owner seeks an injunction against an infringer. Several federal Courts of Appeal have since extended eBay's holding to cases brought under the Copyright and Lanham Acts. Under eBay, requests for injunctive relief in intellectual property cases that had been granted almost automatically have become matters of contested proof. In Groupe SEB USA v. Euro-Pro Operating, 2014 WL 7172253 (3d Cir. Dec. 17, 2014), the Third Circuit held that, while no presumption of irreparable injury applies in false advertising cases, the inferences and assumptions that had led courts to establish a presumption of irreparable injury will still play a key role in deciding whether the evidence presented justifies injunctive relief.

In Euro-Pro, SEB, a manufacturer of electric steam irons, sued its competitor Euro-Pro, arguing that advertising claims that Euro-Pro's steam irons produced more powerful steam were false. After finding Euro-Pro's claims false, the district court granted a preliminary injunction against Euro-Pro's claims of superiority. In affirming, the Third Circuit noted that eBay had ruled out the use of “broad classifications” and “categorical” rules in exercising a court's equitable discretion to issue an injunction. Instead, injunction motions must be considered “in a case-by-case” manner, “drawing reasonable inferences from facts in the record” to determine whether a plaintiff is threatened with irreparable injury.

SEB had satisfied that standard by pointing to literally false comparative advertising, establishing that its products were directly competitive with Euro-Pro's and submitting the testimony of its marketing director, who believed that the “harm to SEB's brand reputation and goodwill is impossible to quantify.” The Euro-Pro court emphasized that “harm to reputation and goodwill” will constitute irreparable injury, “so long as the plaintiff makes a clear showing.” Those are all common-sense inferences, which flow naturally from proof that will likely be available to the plaintiff in many, and perhaps the vast majority, of false advertising claims brought against a direct competitor. Understood in this way, eBay may not present a significant barrier to injunctive relief in comparative advertising cases.