Pattishall IP Blog

October 12, 2011

District Court Denies Preliminary Injunction because Plaintiff Failed to Introduce Evidence of Irreparable Harm – Declares Presumption of Irreparable Harm in Trademark Cases Dead

Filed under: Copyright, Gray Market, Litigation — Tags: , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 10:16 am

Categories:  Gray Market, Litigation, Copyright
Tags: Preliminary Injunction, Gray Market, Software, Copyright, Phillip Barengolts

By Phillip Barengolts, Trademark Attorney

AFL Telecommunications LLC (“AFL”) sells FUJIKARA fusion splicers[1] in the U.S. under an exclusive license from Fujikura Ltd., a Japanese manufacturer of fiber optic equipment.  AFL also is a wholly-owned subsidiary of Fujikara.  SurplusEQ.com, Inc. and friends (“SurplusEQ”) import FUJIKURA fusion splicers intended for sale outside the U.S. and sell them over the Internet to U.S. consumers.  In other words, SurplusEQ sells gray market FUJIKARA fusion splicers.

AFL sued SurplusEQ and moved for a preliminary injunction over these sales, claiming unfair competition, false advertising, and copyright infringement.[2]  SurplusEQ moved to dismiss.  The Court denied AFL’s motion for preliminary injunction because AFL failed to provide evidence of irreparable harm under the standard announced in eBay v. MercExchange L.L.C., 547 U.S. 388 (2006)[3] and Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008). It also denied SurplusEQ’s motion to dismiss, except for a common law unfair competition claim that AFL did not properly articulate.  AFL Telecomm. LLC v. SurplusEQ.com, Inc., 11-01086 (D. Ariz. Sep. 14, 2011).[4]

The facts here are relatively straightforward: 1) the parties dispute whether the U.S. market splicers are materially different from the foreign market splicers sold by SurplusEQ, which allegedly alters them in some way; and 2) the copyrighted software that operates the splicers is made abroad originally, so it falls within the type of claim allowable under Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982, 985 (9th Cir. 2008), aff’d per curiam, 131 S. Ct. 565 (2010). (more…)

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