Third Circuit Says Irreparable Harm Not Presumed in False Advertising Cases

Ferring unsuccessfully sought an injunction against its competitor Watson
which had misrepresented facts, but retracted the unsupported claims

Even though injunctive relief is often granted - especially in patent, copyright, and trademark infringement cases - that injunctive relief is an “extraordinary remedy, which should be granted only in limited circumstances” has remained the often ignored black-letter law. The principle lies at the heart of the maxim that a judge has discretion to to grant or deny a preliminary injunction. The conventional "test" is
(1) whether the party seeking the order has shown a reasonable probability of success on the merits; (2) whether they  will be irreparably injured by denial of the relief; (3) whether granting preliminary relief will result in even greater harm to the non-moving party; and (4) whether granting preliminary relief will be in the public interest.

Although courts recite these elements by rote a body of law developed that in certain cases - particularly trademark infringement, patent infringement, and copyright cases the irreparable harm element is presumed.  That is because it is practically impossible to prove what loss one suffered when someone else appropriates your trade name, or misrepresents something about your product or service.  Courts routinely grant injunctions in such cases because damages seem inadequate - hard to prove, and if the conduct continues, sure to cause some harm.  But eight years ago in eBay v. Merc Exchange the Supreme Court rejected such a presumption.  The Supreme Court further cracked the whip in 2008, holding in a Winter v. NRDC - a challenge to Navy sonar practice as harmful to marine mammals - that plaintiffs must show a "likelihood of irreparable harm" to obtain a preliminary injunction.  
The implications of the two rulings have slowly extended beyond patent cases.  The latest court to fall in line is the Third Circuit.  In Ferring Pharmaceutical v. Watson  decided August 26, 2014 the court declared that irreparable harm is not presumed as a matter of law in a Lanham Act false comparative advertising case. Because the competitor Watson had retracted the false statements and its expedrt promsied not to repeat them District Judge Dennis Cavanaugh denied Ferring's request for an injunction.  The 3rd Circuit affirmed, but said it will stiffen its injunction standards.

The court joined the general belt-tightening directed by the high court, writing:

[I]njunctive relief is an "extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter, 555 U.S. at 22 . Presuming irreparable harm would relieve the plaintiff of her burden to make such a showing.

The Circuit panel acknowledged that it had been somewhat "all over the map":

We note that before Winter, we had not treated the preliminary injunction irreparable harm requirement in a uniform manner, at times requiring a showing of a "possibility," "probability," or "potential" for irreparable harm. See, e.g., Presbytery of N.J. of Orthodox Presbyterian Church v. Florio, 40 F.3d 1454, 1458 (3d Cir. 1994) (holding that the plaintiff "failed to demonstrate the possibility of immediate and irreparable harm"); Furlong v. Gudknecht, 808 F.2d 233, 234 (3d Cir. 1986) (noting that the district court considered, inter alia, the "potential for irreparable injury absent temporary relief" in determining whether to grant a preliminary injunction); United Tel. Workers, AFL-CIO v. W. Union Corp., 771 F.2d 699, 703 (3d Cir. 1985) ("In deciding whether to provide preliminary relief, the district court must consider the probability of irreparable injury to the moving party in the absence of such relief . . . ."); United States v. Price, 688 F.2d 204, 211 (3d Cir. 1982) (noting that the "factors which guide the exercise of the courts' equitable discretion" in granting or denying a request for preliminary injunctive relief include "the probability of irreparable injury to the moving party in the absence of relief"). However, in light of Winter, parties seeking a preliminary injunction are now required to demonstrate that "irreparable injury is likely in the absence of an injunction." Winter, 555 U.S. at 22