No Presumption of Irreparable Harm in Lanham Act False Advertising Cases

Author: Naresh Kilaru

The Court of Appeals for the Third Circuit recently considered whether plaintiffs bringing a Lanham Act false advertising claim and seeking a preliminary injunction are entitled to a presumption of irreparable harm upon showing a likelihood of success on the merits.  It joined the growing chorus of courts holding that no such presumption exists in view of the Supreme Court’s eBay decision.  Ferring Pharm., Inc. v. Watson Pharm., Inc., 765 F.3d 205 (3d Cir. 2014).

Plaintiff accused defendant of making certain false and misleading statements in two webcast presentations to doctors (the parties were competing manufacturers of pharmaceutical products).  The defendant conceded that certain of the statements were made in error and certified to the court that it would not repeat such statements in the future.  The defendant also agreed to clarify other statements moving forward.  The district court denied plaintiff’s motion for a preliminary injunction after finding that plaintiff failed to present sufficient evidence to demonstrate a likelihood of irreparable harm.

The plaintiff appealed the denial of its motion for a preliminary injunction, and the Third Circuit affirmed.  It noted that, prior to eBay, several circuit courts had applied a presumption of irreparable harm in Lanham Act false advertising cases.  Circuit courts after eBay, however, have “uniformly” held that a presumption of irreparable harm is no longer permissible.  As the Supreme Court noted in eBay, applying such a presumption deviates from traditional principles of equity requiring that a movant actually demonstrate the likelihood of irreparable harm.

In this case, the only evidence of irreparable harm submitted by the plaintiff was a declaration from a physician stating that she and other doctors would be less likely to prescribe the plaintiff’s drug after hearing the defendant’s allegedly false statements.  Like the district court, the Third Circuit found the declaration to be speculative because it did not state that the physician had, in fact, prescribed the plaintiff’s product less frequently.  The court also found no irreparable harm because the defendant had immediately removed certain of the statements from the webcast and agreed to clarify other statements moving forward.

This case is yet another post-eBay example of how the irreparable-harm factor is becoming the overriding factor in the preliminary injunction analysis.  Indeed, the district court in this case noted that it did not need to even consider the plaintiff’s likelihood of success on the merits given the failure to demonstrate a likelihood of irreparable harm.

 

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