The U.S. Court of Appeals for the Eleventh Circuit evaluated the trademark significance of using a competitor's trademarks in internet meta-tags, as well as the evolving standard for granting preliminary injunctions in trademark infringement actions in determining that a defendant's use of plaintiff's trademarks as a meta-tag was actionable and likely to cause confusion. Nonetheless, the court vacated the district court's grant of preliminary injunction, finding that under the Supreme Court decision in eBay, it was error to presume irreparable harm based only on the plaintiff's demonstration of a likelihood of confusion. North American Medical Corp. v. Axiom Worldwide, Inc. , Case No. 07-11574, (11th Cir., April 7, 2008) (Anderson, J.).
Plaintiff North American Medical Corp. (NAM) sought a preliminary injunction against defendant Axiom, a competitor in the traction device industry, based upon Axiom's intentional use of NAM's trademarks in the meta-tags of Axiom's website. Although Axiom's website did not display NAM's marks and did not refer to NAM's products, the district court determined that such use was actionable under the Lanham Act. The district court presumed irreparable harm based on plaintiff's showing of a likelihood of success and ultimately preliminary enjoined Axiom from using NAM's trademarks as meta-tags.
On appeal, the court affirmed the district court's holding that NAM had demonstrated a likelihood of success on its trademark infringement claim, finding that that Axiom's meta-tag use was indeed actionable "use in commerce" that created a likelihood of confusion. The court vacated the injunction, however, finding that the district could not presume irreparable harm when granting a preliminary injunction in trademark infringement cases based solely on a showing of likelihood of success. The court acknowledged that the 11th Circuit historically has extended the presumption in trademark infringement cases, but stated that the presumption no longer applies after the Supreme Court's 2006 eBay decision. In eBay, the Supreme Court held that injunctions should not be automatically granted based on a finding of patent infringement. Rather, courts must exercise their equitable discretion when deciding whether to grant or deny injunctive relief.
Although eBay involved a patent infringement action and request for permanent injunctive relief, the court ultimately determined that eBay also applied to trademark infringement actions and requests for preliminary injunctive relief. In so doing, the court explained that the language of the Lanham Act governing the grant of injunctive relief was very similar to the corresponding language of the Patent Act. Further, the court stated that "no obvious distinction exists between to permanent and preliminary injunctive relief to suggest that eBay should not apply to the latter." The 11th Circuit ultimately declined to opine how eBay would affect the case before it, but remanded the issue to the district court for a determination of whether the district court's presumption of irreparable harm was the "equivalent of the categorical rules rejected by the Court in eBay."
Practice Note: The 11th Circuit has now joined the Ninth and Tenth Circuits in holding that use of a competitor's trademarks in meta-tags may constitute actionable trademark infringement, although the court cautions that its holding is factually narrow.
This decision will likely spark debate about whether the holding in eBay should be limited to permanent injunctions, due to the fundamental differences between preliminary and permanent injunctions in terms of purpose, procedure and timing. Additionally, questions are likely to arise as to whether the eBay holding should be extended to trademark cases. In the wake of the NAM decision, trademark owners seeking preliminary injunctions should take care to specifically allege and explain the threat of irreparable harm, separately from any presumption of irreparable harm that may arise based on a showing of likelihood of success on the merits.
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