Corporate Counsel Connect collection

February 2014 Edition

Trademark infringement and irreparable harm; EEOC conciliation; recoverable e-discovery costs

Trademark infringement and irreparable harm

A recent Ninth Circuit decision demonstrates for trademark litigants the further erosion of the classic presumption that trademark infringement results in irreparable harm to the trademark owner.

In Herb Reed Enterprises, LLC v. Florida Entertainment Management, Inc., Herb Reed sued for trademark infringement and sought a preliminary injunction against Florida Entertainment's use of the trademark THE PLATTERS as a vocal group's name. The Ninth Circuit held that the US Supreme Court's decisions in eBay Inc. v. MercExchange, L.L.C. and Winter v. Natural Resources Defense Council, Inc., rejecting a presumption of irreparable harm upon showing likely or actual success on the merits in a patent infringement case, also apply to trademark infringement.

The Ninth Circuit found:

No meaningful distinction among patent, copyright and trademark infringement cases.
That the same principles applicable to permanent injunctions also apply to preliminary injunctions.

The Ninth Circuit ruled that to prevail on a motion for a preliminary injunction, the trademark plaintiff, like patent and copyright plaintiffs:

Cannot rely on a presumption of irreparable harm based on a showing of likelihood of success on the merits.
Must produce evidence establishing an actual likelihood of irreparable harm.

Practitioners should be ready for other circuit courts to find that eBay has eliminated the presumption of irreparable harm in trademark infringement actions. In particular, plaintiffs seeking injunctive relief should be prepared to show likely or actual irreparable harm, while defendants should be prepared to argue that eBay applies.

For more information on trademark infringement claims, see Practice Note, Trademark Infringement and Dilution Claims, Remedies and Defenses.

EEOC concillation

Employers should revisit their strategy when defending charges before the Equal Employment Opportunity Commission (EEOC) following the Seventh Circuit's decision in EEOC v. Mach Mining, LLC. Deviating from the approach taken by other circuit courts, the Seventh Circuit expressly rejected an implied affirmative defense based on the EEOC's failure to conciliate.

Given this decision, employers in the Seventh Circuit should:

Expect to receive little information about the EEOC's position at the charge stage and be subject to more demanding conciliation offers from the EEOC.
Aggressively seek from the EEOC information that would lead to meaningful conciliation or aid in the defense of a later lawsuit, such as:

what conduct the EEOC perceives to be discriminatory;
the results of the EEOC's investigation;
the basis for any reasonable cause findings; and
what remedial action the EEOC is seeking.

Consider escalating the issue if the EEOC is not forthcoming in response to requests, for example by:

communicating with senior officials in the relevant EEOC field office or in Washington, DC; and
forcing the EEOC to commence a subpoena enforcement action if the EEOC issues information requests, which generally will require the EEOC to explain why the requested information is relevant.

Employers in the Second, Fourth, Fifth, Sixth, Tenth and Eleventh Circuits may still seek judicial review of the EEOC's conciliation efforts, but may find the above strategies helpful if they want to resolve the issue before the EEOC commences a court action.

For more information on EEOC investigations and litigation, see Practice Note, Systemic Discrimination: Responding to EEOC Investigations and Litigation.

Recoverable e-discovery costs

A recent Federal Circuit decision highlights the importance of cooperation and maintaining detailed records for parties attempting to recover e-discovery costs.

In CBT Flint Partners, LLC v. Return Path, Inc., the Federal Circuit split with the Third and Fourth Circuits regarding the e-discovery costs a prevailing party can recover from a losing party. All three circuit courts allow the prevailing party to recover its copying costs (scanning hard copy documents and converting electronic records to non-editable formats), but not the costs of preparing to produce documents (such as reviewing documents for privilege or responsiveness). However, the Federal Circuit expanded the definition of copying to include imaging hard drives (making an identical copy of the entire hard drive) and extracting individual documents with their metadata intact.

Until the US Supreme Court clarifies the scope of recoverable costs, companies, counsel and e-discovery vendors should keep detailed records of all e-discovery tasks, even if their costs are not currently recoverable in the forum court. Without contemporaneous records, companies may be unable to take advantage of favorable changes in the law.

Parties should cooperate with each other about production requirements and cost sharing to reduce unpredictability. The courts set default rules, but parties generally may agree on alternatives. If the parties cannot reach an agreement, a party producing electronic documents should consider moving to limit the scope of discovery or to shift costs to the requesting party. A successful motion can protect the party from excessive and unrecoverable costs.

For more information on ways to limit the costs and risks of e-discovery, see Legal Update, Dos and Don'ts for Combatting Discovery Costs.

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