Last Friday, December 2, Judge Lucy Koh of the US District Court for Northern California denied Apple’s formal request for a preliminary injunction against Samsung to prevent Samsung from selling its Galaxy Tab 10.1 tablet and three of its Android phones in the United States.
The purpose of a preliminary injunction is to prevent one party to a lawsuit from inflicting harm on another party before the court can adjudicate their conflicting claims at a full trial. In effect, the injunction attempts to preserve the status quo between the two parties by freezing them in place.
In the real world, of course, time rolls on, injunction or no. And when the conflict is over tech products that represent the culmination of many months of research and development, and yet have a relatively brief shelf life once manufactured, the idea of freezing the parties in a perfect cryogenic state in which all of their rights and interests are preserved intact for later thawing out amounts to a rather grim legal fiction.
Preliminary injunctions are so much a part of modern law that you might imagine that they’ve been around for several centuries at least, but according to US Magistrate Judge Morton Denlow, writing in 2003, “It is widely agreed that the special standard for preliminary injunctive relief [in the United States] did not come into being until the latter part of the nineteenth century.” And not until well into the 20th Century did the four-prong test for injunctive relief prior to a full trial on the merits become the standard method for deciding whether to issue such injunctions.
The Four Prongs
The four prongs of this test are as follows:
The party requesting injunctive relief must have a substantial likelihood of success on the merits of the case at the full trial. The requesting party must be at significant risk of suffering irreparable harm if the injunction is not granted. The balance of harms as between the requesting party (if the injunction is not granted) and the opposing party (if the injunction is granted) must favor the requesting party; that is, the harm to the requester in the absence of an injunction must be greater than the harm to the opposer following an injunction. Granting the injunction must serve the public interest.
To qualify for injunctive relief, the requesting party must satisfy all four of these criteria. Without getting too caught up on these four prongs, I note that prong #1 is clearly easier to satisfy than actually winning at full trial would be, prong three is highly speculative (at least in cases involving patent claims) and therefore less of an impediment than it might seem, and prong four is practically no prong at all (since, if the other three prongs are satisfied, the public interest will rarely find itself ill-served by the requested injunction).
The difficult criterion to satisfy is prong two – and realistically, it states the one truly compelling reason for granting provisional relief in advance of a full trial on the merits. After all, a preliminary injunction interferes with the normal legal process, in which the courts trust in the outcome of the full trial to provide an equitable outcome to the controversy. Clearly, the rationale for granting a preliminary injunction is that the situation is extraordinary and that justice demands that parties not be damaged beyond repair by pursuing their rights in court under the standard rules of procedure. But even so, courts – especially in the United States – are uneasy about tampering with the normal process.
When justice depends on a preliminary injunction
Here are two examples of cases where a party to a lawsuit will clearly suffer irreparable harm in the absence of a preliminary injunction.
Scenario one: Monolith Oil wants to drive its small competitors – in particular independent filling stations – out of business. Mom & Pop’s Gas & Grub has responded to Monolith’s various heavy-handed tactics by suing the company. To force Mom & Pop’s out of business before the case can go to trial, Monolith temporarily lowers the prices on its gasoline to 75 percent of what oil costs on the wholesale market. If Mom & Pop’s can’t obtain a preliminary injunction to halt Monolith’s predatory pricing, it will go broke, lose its land and have to pursue its lawsuit with cut-rate legal counsel.
Scenario 2: FlyByNight Enterprises, a shadowy corporation with no known assets, has manufactured several thousand “McBook Pros,” which it offers online for US$499 each. The products are practically unusable, yet they look enough like an Apple MacBook Pro that customers may be deceived in to thinking initially that they’re the Apple product. Not only does Apple’s reputation stand to be damaged by these fakes, but there is no way for Apple to enforce an award of monetary damages against FlyByNight. The only way to prevent irreparable harm to Apple is by enjoining FlyByNight from selling any of its products, and to enforce the injunction through the court’s powers to issue contempt-of-court citations.
In both of these scenarios, having the court intervene before harm occurs is the only way to ensure that justice is done.
But in the Apple vs. Samsung case, we have a completely different kind of scenario. Two very rich, very successful companies are engaged in complicated litigation over possible patent violations. The products that both companies make are of high quality, and there is no reason to fear that the defendant in the full trial will turn out to be judgment-proof if the plaintiff prevails. In this situation, where the controversy comes down to a feud over stacks of money between two prosperous corporate heavyweights, a preliminary injunction serves no necessary purpose that I can discern. It makes much more sense – especially from the court’s point of view – for the parties to go straight to a full trial and make their case there.
And yet tech companies seem not at all inclined to forgo the chance to plead for preliminary injunctions. Why? Well, there’s always a chance that the gambit will succeed, as indeed it has for Apple – under quite different rules of procedure – in Germany and (provisionally) in Australia in other rounds of the same transnational squabble. But perhaps a bigger reason is evident from Judge Koh’s ruling: She is quite clear about why she is rejecting Apple’s request for an injunction: “the Court DENIES Apple’s motion for a preliminary injunction…because Apple has failed to meet its burden of showing likelihood of irreparable harm in the absence of an injunction.” But the opinion that contains this simple conclusion is 65 pages long. Even a judge doesn’t need 65 pages to explain why a plaintiff has failed to make a persuasive case that it will be irreparably harmed if no injunction ensues.
Sure enough, Judge Koh spends a lot of time reviewing the merits of Apple’s arguments with regard to the other three prongs of the four-pronged test – presumably because both sides spent considerable time arguing in front of her about how the facts play out in the context of all four criteria. The result is useful for both the plaintiff and the defendant: They practice their arguments, get a preview of the other side’s legal reasoning, watch the judge for signs of what works and what doesn’t and read a critique of their performance – all before the actual trial begins. It’s sort of like taking an exam practice test before you take the real thing.
The loser in all this, it seems to me, is the judicial system, which despite having a docket overcrowded with serious cases in desperate need of resolution is forced to go through dress rehearsals of trials so that plaintiffs (and to a lesser but still significant extent, defendants) can fine-tune their presentation for the real thing.
Irreparable harm as a gatekeeper issue
To deal with this problem, I recommend one simple reform: Limit the arguments at the initial phase of any preliminary injunction hearing to the issue of irreparable harm. If the party requesting the injunction fails on that criterion, deny the motion without moving on to consider the other three prongs of the test. If it succeeds on the question of irreparable harm, address the other three prongs in depth. This procedural reform would have several beneficial effects: It would shorten many hearings; it would sharpen the focus of legal opinions like Judge Koh’s; it would discourage parties from pursuing injunctive relief for which they clearly do not qualify; and it would strengthen public respect for the normal process of adjudication, under which a full and speedy trial on the merits of a case is the essence of due process.