TRO applicant couldn't show lost goodwill was irreparable

Ebates Performance Marketing, Inc. v. Integral Technologies, Inc., 2013 WL 75929 (N.D. Cal.)

Ebates filed for a TRO against Integral based on the allegedly infringing use of Ebates’ marks, including its logo and MAX CASH character, on Integral’s website.  

(Side note: seems like classic comparative advertising to me; as the First Circuit just reminded us, there’s no need to use the “minimum” amount of a mark when the use is obviously nonconfusing.) 

The court joined the increasing number of courts to hold that eBay prevents a presumption of irreparable harm in a trademark case.  Though there’s a post-eBay Ninth Circuit case that assumed the validity of the presumption without considering eBay’s effect, that doesn’t bind courts in the Ninth Circuit (citing Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d 989 (9th Cir. 2011)).

Ebates argued that irreparable harm would result from its loss of control over its mark, putting its reputation at risk.  Further, consumers would allegedly infer a connection between the parties (because “Compare and Save!” is the kind of thing affiliated entities say?), and if Integral’s service is inferior, customers might associate that low quality with Ebates.

Integral responded that “erosion of customer trust” and “reputation” and “loss of customer relationships” were not irreparable.  The court agreed.  The possibility that adequate compensation would be availble later weighed heavily against finding irreparable harm, and loss of customers and market share were measurable harms “best characterized as economic harms.”  The court was not convinced that loss of reputation and “erosion of customer trust” stemming from mistaken beliefs in the affiliation of the parties couldn’t be regained.

TRO denied.  Comment: the court seems to have my feeling about “goodwill” as distinct from sales and expected sales—goodwill, how does it work?