In reliance on the Supreme Court’s eBay case, the 9th Circuit Court of Appeals has held that irreparable harm is not automatically presumed from a determination of likely success on the merits during a preliminary injunction, reversing 25 years of precedent, in Perfect 10, Inc. v. Google, Inc., Case No. 10-56316 (9th Cir. Aug. 3, 2011), (available here). See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006).
Perfect 10 (www.perfect10.com) creates and copyrights photographic images of nude and semi-nude models. To qualify as a Perfect 10 model, these women acknowledge that their appearance has not been enhanced or altered by plastic surgery. For many years, Perfect 10 featured these pristine models in its now-defunct magazine, “PERFECT 10” and, more recently, began offering the photos for viewing on a password-protected, paid-subscription website, “perfect10.com.”
Perfect 10 sued Google (www.google.com) and sought a preliminary injunction arguing that Google’s web and image search and related caching feature, its Blogger service, and its practice of forwarding Perfect 10’s takedown notices to chillingeffects.org (www.chillingeffects.org) constituted copyright infringement. Before filing suit, Perfect 10 sent Google takedown notices under the Digital Millennium Copyright Act (DMCA). The DMCA provides some immunity to hosting services.
In order to obtain DMCA protections, Google developed a copyright-infringement notification policy for its Internet services. “Under the DMCA, a provider of online services (such as Google) must, among other things, designate an agent to receive a notification of claimed infringement (often referred to as a “takedown notice”) in order to get certain safe harbor protections. Under Google’s notification policies, the takedown notice must include, among other things, the URL for the infringing material, Google forwards the takedown notices it receives to the website ‘chillingeffects.org’ a nonprofit, educational project run jointly by the Electronic Frontier Foundation and various law schools, which posts such notices on the Internet.” Perfect 10, pg. 10123.
As a result of forwarding the images to chillingeffects.org, when Google removed Perfect 10’s images from its search results, a person can still find the URL for the allegedly infringing images on chillingeffects.org.
In the 9th Circuit, a plaintiff seeking a preliminary injunction must establish (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest. Id. pg. 10124, citing Winter v. Natural Res. Def. Council, Inc., 129 S. Ct. 365, 374 (2008). For over 25 years in the 9th Circuit, once the plaintiff had established a likelihood of success on the merits, irreparable harm was presumed. The Perfect 10 case overturned that well worn theory.
All the 9th Circuit cases predated eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), which indicated that an injunction in a patent infringement case may issue only in accordance with “traditional equitable principles” and warned against reliance on presumptions or categorical rules.
Although ruling on a patent matter, the Supreme Court relied on and clarified its prior decisions under the Copyright Act. “It noted that the language of the Copyright Act (like the Patent Act), states that courts ‘may’ grant injunctive relief ‘on such terms as [they] may deem reasonable to prevent or restrain infringement of a copyright.’” Perfect 10, pg. 10126, citing eBay at 392 and quoting 17 U.S.C. § 502(a). The Second Circuit also abrogated its longstanding presumption “that a plaintiff likely to prevail on the merits of a copyright claim is also likely to suffer irreparable harm if an injunction does not issue,” because this presumption is “inconsistent with the principles of equity set forth in eBay.” Salinger v. Colting, 607 F.3d 68, 75, 79 (2d Cir. 2010).
To support its case, Perfect 10 submitted declarations by Perfect 10’s founder, president, and major financial backer which stated that the number of thumbnail versions of Perfect 10 images available via Google’s Image Search had increased significantly between 2005 and 2010. Further, the declarations stated that the company’s “revenues have declined from close to $2,000,000 a year to less than $150,000 a year,” resulting in over $50 million in losses since then, pushing the company “very close to bankruptcy.”