Shutterstock_187661018Plaintiffs win a rare Fifth Circuit victory

If you represent a client who bought a stock that shed value more and more as bad news about the company trickled out, you can take courage from a rare pro-plaintiff decision by the Fifth Circuit. The court reversed the dismissal of a securities fraud class action on a tricky issue in such cases — the element of "loss causation".

The appeals court panel held that a class of investors in Amedysis — which "provides home health services to patients with chronic health problems" — could take their securities fraud case beyond the motion to dismiss stage. Public Employees' Retirement Sys. of Mississippi v. Amedisys, Inc., No. 13-30580 (5th Cir. Oct. 2, 2014).

Loss causation — huh?

The district court in Baton Rouge had thrown out the complaint on the ground that it failed to plead a plausible basis for the "loss causation" element of their claim.

Loss causation means, in essence, that false information about a company inflated the market price of a stock or other security and caused investors to overpay for the security. Proving it generally requires evidence showing that the post-purchase public airing of "corrective disclosures" about the company coincided with a drop in the market price of security.

Amedisys shareholders alleged that the company and company insiders hid the fact that it regularly engaged in fraudulently claiming reimbursement from Medicaid, grossly inflating its earnings beyond a sustainable amount. The district court thought that the public airing in dribs and drabs of the truth about Amedisys's crooked ways did not count as "corrective disclosure" of the true facts regarding those crooked ways.

Fifth Circuit decision

Citing the Supreme Court's ruling on loss causation in Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005), the court of appeals held:

According to the Complaint, Defendants made materially false and misleading statements about their compliance to artificially inflate the price of Amedisys securities throughout the Class Period. Once Amedisys was placed under the spotlight of government scrutiny for Medicare fraud, its earnings dropped significantly because its employees could no longer continue exploiting Medicare reimbursements. After each negative partial disclosure, Defendants attempted to mitigate the impact of those disclosures by making contemporaneous misstatements to the market and prevented the full truth from being revealed at once. As a result, PERSM and the other Class members purchased Amedisys securities at artificially inflated prices and suffered economic loss when the artificial inflation dissipated and the price of these securities declined in response to the series of partial disclosures revealing the true nature of Amedisys’s business practices.

Taking the above facts as true, the 2008 Citron Report, the Swartz and Graham resignations, the 2010 WSJ Article and the above governmental investigations, coupled with Amedisys’s second quarter 2010 earnings report, collectively constitute and culminate in a corrective disclosure that adequately pleads loss causation for purposes of a Rule 12(b)(6) analysis. This holding can best be understood by simply observing that the whole is greater than the sum of its parts. The district court erred in imposing an overly rigid rule that government investigations can never constitute a corrective disclosure in the absence of a discovery of actual fraud.4 5 “To require, in all circumstances, a conclusive government finding of fraud merely to plead loss causation would effectively reward defendants who are able to successfully conceal their fraudulent activities by shielding them from civil suit.” In re Questcor Sec. Litig., No. SA CV 12-01623[,] 2013 WL 5486762[,] at *22 (C.D. Cal Oct. 1, 2013). Indeed, “there is no requirement that a corrective disclosure take a particular form or be of a particular quality . . . It is the exposure of the fraudulent representation that is the critical component of loss causation.” In re Bristol Meyers Squibb Co. Sec. Litig., 586 F. Supp. 2d 148, 165 (S.D.N.Y. 2008) (citations and internal quotation marks omitted). Accordingly, when this series of events is viewed together and within the context of Amedisys's poor second quarter 2010 earnings, it is plausible that the market, which was once unaware of Amedisys's alleged Medicare fraud, had become aware of the fraud and incorporated that information into the price of Amedisys's stock.

A motion to dismiss challenges the adequacy of the initial pleading. To plead loss causation in a private securities action, the complaint need only allege facts that support an inference that the Defendants’ misstatements and omissions concealed the circumstances that bear upon the loss suffered such that Plaintiffs would have been spared all or an ascertainable portion of that loss absent the fraud. Lentell, 396 F.3d at 175. Whether the connection between Amedisys’s misleading statements and the alleged corrective disclosures may ultimately be found too attenuated at a later stage in litigation is a highly fact intensive inquiry that need not be reached at this point. The Complaint consists of over 200 pages of allegations regarding, among other things, Defendants’ fraudulent Medicare billing practices. Where the Complaint sets forth specific allegations of a series of partial corrective disclosures, joined with the subsequent fall in Amedisys stock value, and in the absence of any other contravening negative event, the plaintiffs have complied with Dura’s analysis of loss causation.

Id. at 16-19.

Teaching

Amedisys teaches how to plead loss causation in cases where the truth comes out gradually and that plaintiffs should now despair a bit less about bringing securities fraud cases within the Louisiana-Mississippi-Texas area over which the Fifth Circuit presides.

Shutterstock_158653760Equal pay for equal work

The Equal Pay Act of 1963, 29 U.S.C. 206(d), mandates equal pay for "equal work".

But what does "equal work" mean? A ruling by the Second Circuit focuses on the "content" of the "work" and rejects titles and labels as the basis for comparing male and female workers.

"Actual job content"

The court held in EEOC v. Port Authority of New York and New Jersey, No. 13-2705-cv (2d Cir. Sept. 29, 2014), that phrase requires a claimant to show that females did the same actual work as their male peers. As the panel noted:

[A] successful EPA claim depends on the comparison of actual job content; broad generalizations drawn from job titles, classifications, or divisions, and conclusory assertions of sex discrimination, cannot suffice. At the pleading stage, then, a plausible EPA claim must include "sufficient factual matter, accepted as true" to permit "the reasonable inference" that the relevant employees job content was "substantially equal."

Id. at 21-22 (quoting Ashcroft v. Iqbal, 556 U.S.. 662, 678 (2009)) (emphasis in original).

A case about lawyers

The lawsuit involved claims by the Equal Employment Opportunity Commission on behalf of female nonsupervisory attorneys" who worked in the Port Authority's law department. The EEOC alleged that "the Port Authority had violated the EPA by paying its female attorneys at a lesser rate than its male attorneys." Id. at 4.

The district court dismissed the case. The Second Circuit affirmed.

The panel rejected what it deemed the EEOC's theory — that "an attorney is an attorney is an attorney". It noted:

[D]espite a three-year investigation conducted at the Port Authority's cooperation, the EEOC's complaint and incorporated interrogatory responses rely almost entirely on broad generalizations drawn from job titles and divisions, and supplemented only by the unsupported assertion that all Port Authority nonsupervisory attorneys had the same job, to support its "substantially equal" work claim. [T]he EEOC's complaint was rightly dismissed.

Id. at 22.

Lesson

The ruling points up a possibly common mistake in thinking about equal pay for equal work.

Under the Second Circuit's analysis, the EPA requires something like proof that a female worker had the same or similar skills, did the same or a similar job, and obtained the same or similar results as a male worker who got higher pay.

The fact that gender discrimination may have prevented or hindered the female worker from acquiring the same skills, doing the same work, and achieving the same results as her male peer may not matter under the EPA.

Apparently only Title VII — and not the EPA — deals with that aspect of gender injustice.

PolyolBig damages . . . and a big win for class actions

A Tenth Circuit panel of judges has upheld a $1.2 billion verdict and judgment against Dow Chemical for its role in a price-fixing conspiracy that involved urethane chemical products. Dow Chemical Co. v. Seegott Holdings, Inc., No. 13-3215 (10th Cir. Sept. 29, 2014) ( opinion here).

More than any other court of appeals decision in recent memory, the ruling should help blunt aggressive attacks on class actions in which the plaintiff class seeks an award of damages.

Class treatment prevails

The panel rejected Dow's four main arguments on appeal:

  • that the district court shouldn't have certified the case as a class action,
  • that statistical evidence of damages lacked a reliable basis,
  • that plaintiffs failed to prove the price-fixing conspiracy succeeded, and
  • that the damages award violated Dow's seventh amendment right to trial by jury.

The court distinguished Comcast Corp. v. Behrend, 133 S. Ct. 1346 (2013) and Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), holding that neither decision required the conclusion that individual issues predominated in the case against Dow Chemical and that the district court acted within its discretion in ruling otherwise.

The panel's treatment of the attacks on damages also stressed the broad discretion that district courts have in admitting expert testimony about statistics and other matters involving expert knowledge.

Kansas City trial

The jury trial took place before U.S. District Judge John Lungstrum in Kansas City, Kansas. It ended in early 2013. Blawgletter's friend and colleague Joe Goldberg served as lead trial counsel for the class.

Congratulations, Joe!

 

With Texas now hosting many of the world’s largest corporations,* our public policy has shifted from a patriarchal one in which we valued uniform treatment of Texas employees from one employer to the next above all else, to one in which we also value the ability of a company to maintain uniformity in its employment contracts across all employees, whether the individual employees reside in Texas or New York.

___________________

* Fifty-two of the 2014 Fortune 500 Companies maintain headquarters in Texas, placing Texas third behind California and New York’s fifty-four companies. Maria Halkias, Texas Remains Near Top for Fortune 500 Companies, THE DALL. MORNING NEWS, June 3, 2014, available at 2014 WLNR 14947032.

ExxonMobil Corp. v. Drennen, No. 12-0621, slip op. 16 (Tex. Aug. 26, 2014) (holding that New York law allowing employer to seize shares of stock from employee who went to work for competitor did not violate Texas policy against non-compete covenants) (Green, J.).

Goldman SachsMurky bylaws

May a Delaware firm whose bylaws promise to pay the legal bills of a group of people — all of its "officers" — avoid paying on the ground that it failed to make clear who belonged in the group?

Shouldn't the rule that governs in contracts cases — that a court will construe an ambiguity against the drafter who created it — apply to the benefit of anyone who can plausibly claim "officer" status?

The Third Circuit said maybe to the first question because it answered no to the second.

But Blawgletter expects the panel's paper will receive further grading, either by the entire Third Circuit or the Supreme Court of Delaware, whose law the panel sought to divine and apply.

The case

In Aleykinov v. Goldman Sachs Group, Inc., No. 13-4327 (3d Cir. Sept. 16, 2014), Sergey Aleykinov, a "vice president" of a Goldman Sachs Group (GSG) subsidiary, Aleykinov won a jury trial in which federal prosecutors alleged he had stolen software from the GSG sub. He demanded indemnification for the fees he had incurred plus ongoing advancement of fees to defend himself against follow-on state charges arising from the same conduct.

Aleykinov cited GSG's bylaws, which bound GSG to pay fees of "officers" at GSG as well as at its corporate and non-corporate subsidiaries. The sub for which Aleykinov worked, a limited partnership, did not have to have officers. As the panel explained:

[The GSG sub] has appointed officers pursuant to a written resolution process, but this process was not widely disseminated. It has no other formal appointment processes for officers. [GSG sub] employs tens of thousands of employees. Approximately one-third of those employees hold the title of vice president. Someone with the title of vice president is more senior than someone with the title of analyst or associate, but less senior than someone with the title of managing director.

Aleynikov, slip op. 5.

The district court in New Jersey granted summary judgment to Aleykinov on his claim for advancement of fees. GSG appealed.

GSG wins

The panel held, by a 3-0 vote, that the bylaws had an ambiguity. But it split 2-1 on the question of whether the contra proferentem rule applied.

The rule provides that "[w]hen one side of a contract was unilaterally responsible for the drafting, courts . . . construe ambiguous terms against the drafter." Id. at 30 (citing Norton v. K-Sea Transp. Partners L.P., 67 A.3d 354, 360 (Del. 2013)).

The majority "conclude[d] that contra proferentem has no application in resolving whether a person has rights under the contract at all – here, whether Aleynikov is an officer of GSCo." Id. at 32 (footnote omitted). "Applying the doctrine of contra proferentem in this circumstance would put the cart before the horse. It would have us resolve ambiguities in favor of a non-drafting individual in order to determine whether that non-drafting individual was even subject to the agreement." Id. at 32-33.

Dissent

The dissenting judge begged to differ. He explained that, in his view, "neither Delaware case law, nor Delaware public policy, favors the exception to Delaware’s contra proferentem doctrine set forth by the majority." Id. at 8 (Fuentes, J., dissenting). "I therefore believe that we are obliged to apply contra proferentem here, and construe the advancement provision of the By-Laws against Goldman." Id.

He went further, criticizing the majority's allowance of evidence to resolve the ambiguity despite the fact that it related only to GSG's intent and not arguable "officers" like Aleynikov:

Today’s ruling sanctions the consideration of two categories of so-called "course of dealing" evidence: (1) evidence that Goldman invoked its discretion in agreeing to pay the legal fees of individuals in similar positions to Aleynikov; and (2) internal Goldman documents that "appointed and/or removed individuals as officers of GSCo," as well as "evidence that the persons occupying the positions of officer, as appointed in the documents, were publicly identified in regulatory filings." Maj. Op. at 24. This evidence does not speak to the mutual understanding of the contracting parties. I therefore believe it is irrelevant and cannot be considered by the finder of fact.

Id. at 9.

What happens next?

On September 16, 2014, Aleynikov filed a petition for panel rehearing and rehearing en banc. The petition looks to Blawgletter a likely candidate for review by the entire Third Circuit. We don't know why the court did not certify the controlling legal question to the Delaware Supreme Court, and leaving such an important issue to the federal courts seems odd.

We expect that, regardless of what happens in the Aleynikov case, the panel's decision will not provide the last word.

State court option

In the meantime, officers and employees of Delaware entities may wish to bring cases seeking indemnification or advancement under bylaws and similar foundational documents in Delaware state court rather than federal court.

Shutterstock_199059257

Measuring patent damages — and excluding reexam evidence

The Federal Circuit again tightened the criteria for setting damages awards in patent infringement cases. But, in a bit of good news for infringement plaintiffs, it lent further support to the general inclination of district courts to exclude evidence of non-final results of patent reexaminations by the U.S. Patent and Trademark Office.

In VirnetX, Inc. v. Cisco Systems, Inc., No. 13-1489 (Fed. Cir. Sept. 16, 2014), a two-judge panel* ruled that a mistake in a jury instruction and a gap in the patent holder's damages evidence required the court to set aside a $368 million jury award against Apple.

The patents

VirnetX, the patent holder, sued Cisco, Apple, and others in the Eastern District of Texas for infringing two patents that relate to "secure communication links" using Internet "domain names". VirnetX's claim against Apple focused on the FaceTime feature in iPhones, iPods, and iPads.

FaceTime allows users of an Apple device to make a secure link with another user and to send and receive audio and video via packets.

The trial and verdict; Apple's appeal

In a five-day trial, the district court in Tyler excluded Apple's evidence that the USPTO had reexamined the patents and initially rejected them. The court also overruled Apple's critiques of VirnetX's damages evidence.

The jury found that FaceTime infringed VirnetX's patents and awarded the company $368,160,000 as a reasonable royalty.

Apple claimed on appeal to the Federal Circuit that the district court had made a great many errors. Two warrant notice.

No error in excluding reexam

Apple urged that the district court should have let it tell the jury about the reexams. It contended that the USPTO's initial rejection of the patents in the reexams supported Apple's claim that it reasonably believed the patents invalid and therefore did not infringe them willfully.

The panel disagreed. It noted that "this court's precedent has often warned of the limited value of actions by the PTO when used for such purposes." Id. at 23 (citing cases). It then held that the district court did not abuse its discretion "in finding that the probative value was substantially outweighed by the risk of unfair prejudice to the patentee, confusion with invalidity (on the merits), or misleading the jury, thereby justifying exclusion under Federal Rule of Evidence 403." Id. at 23-24 (citing cases).

Damages for "smallest salable unit"; Nash bargaining

Apple also attacked the underpinnings of the $368 million damages verdict. It urged that the jury based its award on the "entire market value" of Apple devices rather than the contribution of only the infringing feature. The Federal Circuit agreed.

The district court erred in two ways, the panel held. The court's instruction that the jury "should not use the value of the entire apparatus or product" did not go far enough, the panel concluded, because the instruction permitted the jury to use the "entire market value" of the infringing devices if it found "the product in question constitutes the smallest saleable unit containing the patented feature." Id. at 28 (quoting instruction).

As the panel explained:

[T[he instruction mistakenly suggests that when the smallest salable unit is used as the royalty base, there is necessarily no further constraint on the selection of the base. That is wrong. For one thing, the fundamental concern about skewing the damages horizon — of using a base that misleadingly suggests an inappropriate range — does not disappear simply because the smallest salable unit is used.

Moreover, the smallest salable unit approach was intended to produce a royalty base much more closely tied to the claimed invention than the entire market value of the accused products. . . . Where the smallest salable unit is, in fact, a multi-component product containing several non-infringing features with no relation to the patented feature (as VirnetX claims it was here), the patentee must do more to estimate what portion of the value of the product is attributable to the patented technology.

Id. at 29.

The other error related to testimony by VirnetX's expert on "Nash bargaining", which John Forbes Nash, Jr. — he of A Beautiful Mind — originated. The expert used the "Nash Bargaining Solution" to opine that, in a hypothetical bargain, Apple and VirnetX would have agreed to split Apple's profits from the infringing feature on a 55-45 basis after using 50-50 as a benchmark.

The panel compared the approach to one it outlawed in Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011) — "the 25 percent rule of thumb", which posited that parties to a hypothetical reasonable royalty negotiation would start by assuming that 25 percent of the infringer's profits from the infringing product provided an appropriate starting point. See Blawgletter, Jan. 6, 2011, Rule Behind Huge Patent Damages Dies at Hands of Federal Circuit, Second Rule Lives to Fight Another Day.

Like the old rule of thumb, the panel observed, the 50-50 premise "would . . . run the significant risk of inappropriately skewing the jury's verdict." Id. at 39. The fact that the damages expert did not establish that the "premises" of the Nash model "fit" the facts of the case, the court held, "was an essential failing in invoking the Solution." Id. at 38-39.

The court remanded the case for further proceedings.

Upshot

The rulings in VirnetX (a) bolster the inclination of most district courts to exclude evidence of non-final action by the USPTO in reexam proceedings and (b) clarify the sort of evidence that infringement clamants should submit in support of damages awards.

The court did not disapprove using an entire device as the "smallest saleable unit" but did require further analysis when the SSU has both infringing and important non-infringing features. The court also demanded more rigor from invocations of Nash bargaining but did not categorically preclude them.

____________________

*One of the panel members, Randall R. Rader, retired on June 30, 2014. The panel heard oral argument on March 3, 2014.

Big Log See-SawParty flip in the federal courts

Since the inauguration of Barack Obama in January 2009, eight U.S. courts of appeals have flipped parties, The New York Times reported.

Now nine of the 13 federal appeals courts — almost 70 percent — have more active judges who received their appointments from Democratic Presidents than colleagues who got theirs from Republican Presidents.

For those of you who know your way around an abacus, that means that before January 2009 only one circuit remained more than half Democratic appointees.

The Mid-America circuits hold on

The ever-blue Ninth Circuit didn't change, but the First, Second, Third, Fourth, Tenth, Eleventh, D.C., and Federal Circuits did.

That leaves the mid-America circuits — the Fifth (Louisiana, Mississippi, and Texas), Sixth (Kentucky, Michigan, Ohio, and Tennessee), Seventh (Illinios, Indiana, and Wisconsin), and Eighth (Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota). They may not tip to the Democratic side any time soon.

The Fifth Circuit, with 15 active judges and two vacancies, features a 5-10 Democratic appointee to Republican appointee ratio.

The Sixth, which also have 15 actives but only one empty seat, likewise goes 5-10.

In the Seventh Circuit, the count runs 3-7, with a single vacancy.

A 3-8 lineup obtains in the vacancy-less Eighth Circuit.

Does it matter?

"Of course, a president’s political affiliation ultimately has no bearing on how a judge decides cases", said The New York Times.

Blawgletter wrote back in 2007:

[L]et's not go too far in connecting who-appointed-me with political overtones.  Most people, we imagine, take the identity of the appointing president as a proxy for judicial philosophy — liberal, conservative, activist, law-and-order, and the like.  Fine.

The difficulty comes in cases that inject judges into the political process.  One might in good faith wonder, for instance, whether any of the justices who decided Bush v. Gore pondered the impact that his or her vote might have on the Court's balance and therefore his or her influence in future decisions.

Nor can we ignore the linkage that politicians make in their campaigns between electing them and the judicial appointments they would make.   

Practicing lawyers, including Blawgletter, want to know judges' pre-appointment political affiliation.  We just do.  And we find their bristling at reports of that affiliation reassuring. 

Those who disagree might consider doing what our 12-year-old son suggests:  Cry me a river, build a bridge, and get over it.

We'll add that The Wall Street Journal seems to think that party affiliation of the appointing President matters.

Idea lightbulb

Abstract ideas

Section 101 of the Patent Act allows patents on "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof". 35 U.S.C. 101. But, the Supreme Court has held, it does not make laws of nature, natural phenomena, or abstract ideas patentable. Ass'n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013). Those things "are the basic tools of scientific and technological work" and therefore fail section 101's test for patentable subject matter. Gottschalk v. Benson, 409 U.S. 63, 67 (1972).

But what counts as an "abstract idea"? The Federal Circuit shed further light on the question last week.

Business methods

In Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347 (2014), the Court declined to adopt a per se rule against patents that involve "business methods", which some people maintained do nothing more than describe patent-ineligible ideas about how to engage in commerce. The Court nonetheless struck down Alice Corp.'s patent on "financial intermediation" as not "inventive" enough to "transform" the concept of having a third-party intermediate a business transaction into something more than an abstract idea. See Blawgletter, June 19, 2014, "You Still Can't Patent Ideas".

safeBUY v. Google

Which brings us to the case the Federal Circuit decided last week.

In buySAFE, Inc. v. Google, Inc., No. 13- (Fed. Cir. Sept. 3, 2014), the patent owner, buySAFE, accused Google's "Trusted Stores" feature of infringing buySAFE's patent on "Safe transaction guaranty". As the court described it, the patent claimed a method in which

(1) a computer operated by the provider of a safe transaction service receives a request for a performance guarantee for an “online commercial transaction”; (2) the computer processes the request by underwriting the requesting party in order to provide the transaction guarantee service; and (3) the computer offers, via a “computer network,” a transaction guaranty that binds to the transaction upon the closing of the transaction.

buySAFE, slip op. 3.

The patent didn't get beyond an abtract idea, the panel ruled:

The [patent] claims are squarely about creating a contractual relationship—a “transaction performance guaranty”—that is beyond question of ancient lineage. See Willis D. Morgan, The History and Economics of Suretyship, 12 Cornell L.Q. 153 (1927). The dependent claims’ narrowing to particular types of such relationships, themselves familiar, does not change the analysis. This kind of narrowing of such long-familiar commercial transactions does not make the idea non-abstract for section 101 purposes. . . . The claims thus are directed to an abstract idea.

buySAFE, slip op. 9.

Nor did invoking the use of computers or limiting the claims to online transactions supply the necessary transformation of an abstract idea in an inventive way. Such "narrowing has long been held insufficient to save a claim in this context." Id.

Lesson

safeBUY will hearten companies that do business online — and not just those that use a "transaction guaranty" or the like. A patent must do more, under Alice Corp. and now buySAFE, than link a notion — however clever — to a device that carries it out. You need "something 'inventive' that somehow 'transforms' the unpatentable subject matter into something other than a law of nature, natural phenomenon, or abstract idea."

The test may sound about as abstract as the idea that didn't meet it. IT IS! But you don't need a patent on a legal principle. Nor could you get one.

C'est la guerre.

Stop!

Presuming harm

For a long time, federal courts presumed that misuse of someone's intellectual property — things like patents, copyrights, and trademarks — would cause the owner "irreparable harm". The bad acts, the courts believed, would ipso facto injure the IP owner in ways that mere money could not fix.

Change in the air

But that presumption took a hit when the Supreme Court ruled in eBay Inc. v. MerExchange, L.L.C., 547 U.S. 388 (2006), that the court of appeals had "erred in applying a categorical rule that injunctions should issue upon a showing of valid patent infringement." Ferring Pharmaceuticals, Inc. v. Watson Pharmaceuticals, Inc., No. 13-2290, slip op. at 13 (3d Cir. Aug. 26, 2014). The decision prompted the Federal Circuit to "jettison[] the presumption of irreparable harm as it applies to determining the appropriateness of injunctive relief." Robert Bosch LLC v. Pylon Mfg. Corp., 659 F.3d 1142, 1149 (Fed. Cir. 2011). The Second and Ninth Circuits jumped on the bandwagon in copyright cases. Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010); Perfect 10, Inc. v. Google, Inc., 653 F.3d 976 (9th Cir. 2011).

False advertising and trademark claims too?

In Ferring Pharmaceuticals, the Third Circuit held that the logic of eBay applied to cases under the Lanham Act, which provides a cause of action for false advertising and for infringement of trademarks, service marks, and trade dress. The district court had declined to presume that statements by a Watson Pharmaceuticals representative would irreparably harm Ferring. The Third Circuit affirmed, ruling "that a party seeking a preliminary injunction in a Lanham act case is not entitled to a presumption of irreparable harm but rather is required to demonstrate that she is likely to suffer irreparable harm if an injunction is not granted." Ferring Pharmaceuticals, slip op. at 21.

The panel went on to review the evidence. It pointed to statements that the "allegedly false statements [about Ferring's drug] would not be repeated." Id. at 24. The court therefore held that the district court "did not clearly err in finding that Ferring failed to demonstrate that it would likely suffer irreparable harm in the absence of preliminary injunctive relief." Id.

So?

You always have to show irreparable harm to get an injunction. Even if your case involves theft of intellectual property. You still must prove that you'll suffer injury money can't compensate for — things like hard-to-calculate loss of opportunities and harm to reputation. Get ready.