Trademark's eBay Problem
65 Pages Posted: 12 Oct 2015 Last revised: 26 Apr 2016
Date Written: October 8, 2015
This article explores the upheaval created within trademark law by eBay, Inc. v. MercExchange, L.L.C., asking why a simple doctrinal question (Should a patent remedies rule be extended to trademark cases?) has posed such problems for the courts. After a thorough review of past and present trademark injunction practice, and the Lanham Act’s legislative history, it finds that trademark law’s inability to assimilate eBay stems from unresolved substantive conflicts in the underlying legislation itself. In short, because the drafters could not settle on the proper scope of a federal trademark right, they hedged by granting a national exclusive right limited by undefined remedial discretion to enforce it. The extensive confusion in trademark case law and scholarship concerning the proper role for eBay is thus best seen as a direct outgrowth of a deeply conflicted statute. eBay inadvertently resurfaced a deep and underexplored ambivalence in the U.S. trademark scheme.
The ambiguity created by overlaying equitable discretion on top of statutory exclusivity is a familiar one to the broader subject area of statutory injunctions. But this article further shows how it is particularly impactful in the trademark space because trademark plaintiffs cannot attain monetary relief without making a heightened showing of harm beyond that needed to establish liability for infringement. In its most aggressive application, eBay’s solution to the statutory injunction problem (i.e., denying any presumptive right to injunctive relief) strips trademark owners of a presumptive entitlement to any remedy at all.
Two fixes are possible. Courts in trademark cases can acknowledge that the pre-eBay presumption of irreparable harm was an imperfect but workable judicial compromise designed to balance the Lanham Act’s simultaneous recognition of exclusive rights and equitable discretion, and reject or limit eBay’s extension to trademark practice accordingly. Or alternatively Congress must clarify the fundamental question of what it means to own a registered trademark in the United States.
Keywords: Trademark, Injunction, eBay, Remedies, Injunctive Relief, Lanham Act
JEL Classification: K39
Suggested Citation: Suggested Citation