Academic journal article Fordham Journal of Corporate & Financial Law

Keeping the Status Quo: Why Continuing to Recognize the Presumption of Irreparable Harm in False Comparative Advertising Protects the Market

Academic journal article Fordham Journal of Corporate & Financial Law

Keeping the Status Quo: Why Continuing to Recognize the Presumption of Irreparable Harm in False Comparative Advertising Protects the Market

Article excerpt

ABSTRACT

Legal action challenging a company's advertisement for containing false or misleading statements is a more recent development in the American legal system. The market's utilization of advertising to promote sales has grown steadily to the point where the frequency with which it now permeates everyday life is almost constant. Lawsuits challenging many of these advertisements have increased as well. The swelling influence of advertisements in the marketplace and the complementary rise in false advertising litigation is relevant for both companies and consumers alike. As litigation continues to grow as an outlet for companies to safeguard their brands, consumers will find themselves jointly affected. This Note will analyze a subset of this area known as false comparative advertising.

A false comparative advertisement subjects a company targeted by that advertisement to repeated injuries in the form of damage to reputation and loss of goodwill until its broadcast is halted. As a result, before the underlying false advertisement claim is ever argued, a plaintiff will first seek to preliminarily enjoin the defendant from broadcasting the advertisement. A court's analysis of a motion for a preliminary injunction will involve four factors. There is a judicially created practice that has long been recognized in this analysis that allows a court to presume one of those factors. It essentially permits a court to presume irreparable harm, one of the four factors, without the plaintiff producing supporting evidence. Naturally, it is called the presumption of irreparable harm. The validity of the presumption is the next frontier facing courts hearing false advertising cases. This Note will discuss the reasons why the presumption of irreparable harm should continue to be recognized within the realm of false comparative advertising litigation.

TABLE OF CONTENTS

INTRODUCTION....................................................................................934

I. THE EVOLUTION OF THE PRESUMPTION OF IRREPARABLE HARM IN FALSE ADVERTISING, PATENT INFRINGEMENT, AND COPYRIGHT INFRINGEMENT CLAIMS..........................................938

A. The False Comparative Advertisement Claim........................939

B. The Patent Infringement Claim...............................................945

C. The Copyright Infringement Claim.........................................947

II. EBAY AND THE DOWNFALL OF THE PRESUMPTION OF IRREPARABLE HARM...................................................................950

A. The Beginning of the End for the Presumption.......................950

1. eBay, Inc. v. MercExchange, L.L.C...................................950

2. Winter v. Natural Resources Defense Council, Inc...........952

B. The End of the Presumption in Patent Infringement Claims and Copyright Infringement Claims......................................953

1. Salinger v. Colting.............................................................954

2. Robert Bosch, LLC v. Pylon Manufacturing Corp.............955

C. The End of the Presumption in False Advertisement Claims?..................................................................................956

1. Time Warner Cable, Inc. v. DIRECTV, Inc.......................956

2. Ferring Pharmaceuticals, Inc. v. Watson Pharmaceuticals, Inc.......................................................958

III. LONG LIVE THE PRESUMPTION OF IRREPARABLE HARM............961

A. The Presumption of Irreparable Harm is Consistent with eBay and Winter.....................................................................961

B. Policy Reasons for Continued Recognition.............................963

C. The Standard to be Recognized by Courts Going Forward.....966

CONCLUSION........................................................................................967

INTRODUCTION

"Never write an advertisement which you wouldn't want your own family to read. …

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