Perfect 10, Inc. v. Google, Inc.
Filing
62
Filed (ECF) Appellant Perfect 10, Inc. petition for panel rehearing and petition for rehearing en banc (from 08/03/2011 opinion). Date of service: 08/17/2011. [7861468] (JNM)
Court of Appeals Docket Number 10-56316
Decided August 3, 2011
Before the Honorable Alex Kozinski, Chief Judge, Michael Daly Hawkins
and Sandra S. Ikuta, Circuit Judges
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PERFECT 10, INC.,
Plaintiff-Counter-Defendant-Appellant,
v.
GOOGLE, INC.
Defendant-Counter-Claimant-Appellee.
Appeal from the United States District Court, Central District of California,
Hon. A. Howard Matz, USDC No. CV 04-9484 AHM (SHx)
PETITION FOR PANEL REHEARING AND FOR
REHEARING EN BANC
Jeffrey N. Mausner (California Bar No. 122385)
David N. Schultz (California Bar No. 123094)
Law Offices of Jeffrey N. Mausner
21800 Oxnard Street, Suite 910
Woodland Hills, California 91367
Telephone: (310) 617-8100
Facsimile: (818) 716-2773
Attorneys for Plaintiff/Appellant Perfect 10, Inc.
CORPORATE DISCLOSURE STATEMENT
Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure,
Plaintiff-Appellant Perfect 10, Inc. certifies that it has no parent or
subsidiary corporations, and that no publicly held corporation owns 10% or
more of its stock. Perfect 10, Inc. has not issued shares to the public.
Dated: August 17, 2011
Respectfully submitted,
By:________________________________
Jeffrey N. Mausner
Law Offices of Jeffrey N. Mausner
Attorneys for Plaintiff-Appellant
Perfect 10, Inc.
TABLE OF CONTENTS
I. INTRODUCTION. .................................................................................... 1
A. Statement of Counsel. ....................................................................... 1
B. Reasons For Petition. ........................................................................ 3
II. THE PANEL RELIED UPON eBAY TO REVERSE
LONGSTANDING PRECEDENT WITHOUT ENGAGING IN
THE VERY ANALYSIS REQUIRED BY eBAY.................................... 5
A. The eBay Decision. ........................................................................... 6
B. The eBay Court Specifically Declined To Address The
Presumption At Issue In This Case. ................................................. 8
C. An Historical Analysis Of Copyright Law Establishes That
The Presumption Of Irreparable Harm Was Part Of A Long
Tradition Of Equity Practice, Going Back To The 17th
Century. .......................................................................................... 10
D. The Panel’s Opinion Conflicts With Congressional Intent
Regarding The Presumption Of Irreparable Harm. ........................ 13
E. The Presumption Of Irreparable Harm Is Not Equivalent To
The Categorical Rule Rejected In eBay.......................................... 14
F. The Patent Act Specifically Provides For Application Of
Equitable Principles, While The Copyright Act Does Not. ........... 16
G. The Preliminary Injunction At Issue Here Is Not
Comparable To The Permanent Injunction At Issue In eBay......... 16
III. THE PANEL’S OPINION IS CONTRARY TO THE
PRINCIPLES ESPOUSED IN THIS COURT’S ROOMMATES
DECISION. ............................................................................................ 18
IV. THE PANEL’S OPINION CONFLICTS WITH THIS
COURT’S OPINION IN MARLYN. ....................................................... 19
V. THE OPINION’S RULING REGARDING IRREPARABLE
HARM OVERLOOKED MATERIAL POINTS OF FACT AND
LAW. ...................................................................................................... 20
VI. CONCLUSION. ..................................................................................... 23
i
TABLE OF AUTHORITIES
Cases
Abbott Labs. v. Andrx Pharms., Inc., 452 F.3d 1331 (Fed. Cir. 2006) ........ 17
American Metropolitan Enterprises, Inc. v. Warner Bros. Records,
389 F.2d 903 (2d Cir. 1968) ..................................................................... 13
Ankenbrandt v. Richards, 504 U.S. 689 (1992).................................. 2, 13, 14
Apple Computer, Inc. v. Formula International, Inc., 725 F.2d 521
(9th Cir. 1984)............................................................................................. 5
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994)............................. 9
Christiana Industries v. Empire Electronics, Inc., 443 F.Supp.2d
870 (E.D.Mich.2006) ................................................................................ 18
Consol. Rail Corp. v. Gottshall, 512 U.S. 532 (1994) ............................. 2, 13
Dun v. Lumbermen’s Credit Ass’n, 209 U.S. 20 (1908)................................. 9
eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) .................... passim
Eisai Co., Ltd. v. Teva Pharms. USA, Inc., 2008 WL 1722098
(D.N.J., Mar. 28, 2008) ............................................................................. 17
Fair Housing Council of San Fernando Valley v. Roommates.Com,
LLC, 521 F.3d 1157 (9th Cir. 2008) (en banc) ............................... 2, 18, 19
Fleet Wholesale Supply Co. v. Remington Arms Co., 846 F.2d 1095
(7th Cir. 1988)............................................................................................. 9
Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996) ........... 18
Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc.,
527 U.S. 308 (1999) .................................................................................. 11
Hogg v. Kirby, 8 Ves. Jr. 215, 32 Eng. Rep. 336 (Ch. 1803) ....................... 11
Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co.,
571 F.3d 873 (2009).............................................................................. 3, 19
N.Y. Times Co. v. Tasini, 533 U.S. 483 (2001)............................................... 9
Powell v. Home Depot U.S.A., Inc. ., 2009 WL 3855174
(S.D.Fla., Nov. 17, 2009).......................................................................... 14
United States Department of Labor v. Wolf Run Mining Co.,
452 F.3d 275 (4th Cir. 2006) .................................................................... 17
ii
Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982) ............................. 7, 13
Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952) .................... 9
Statutes
17 U.S.C. §502 ........................................................................................ 13, 16
17 U.S.C. §512 ................................................................................................ 4
35 U.S.C. §283 .............................................................................................. 16
Other Authorities
H. Tómas Gómez-Arostegui, What History Teaches Us About
Copyright Injunctions and The Inadequate-Remedy-At-Law
Requirement, 81 S. Cal.L.Rev. 1197, 1208 & n.35 (2008) ............... passim
Rules
FRAP 35.................................................................................................. 1, 2, 3
FRAP 40...................................................................................................... 1, 3
iii
I.
INTRODUCTION.
A.
Statement of Counsel.
The undersigned counsel states that in his judgment, the following
situations exist which warrant rehearing and rehearing en banc:
1)
The Panel overruled this Circuit’s longstanding rule that a
showing of a reasonable likelihood of success on the merits in a copyright
infringement claim raises a presumption of irreparable harm for purposes of
preliminary injunctive relief. The Panel relied upon the United States
Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S.
388 (2006) (“eBay”) to overrule this precedent, without engaging in an
analysis of historical practice or Congressional intent, as required by eBay.
This is a question of exceptional importance regarding the availability of
injunctive relief in copyright infringement claims. (FRAP 35(b)(1)(B)). In
so ruling, the Panel overlooked material points of fact and law. (FRAP
40(a)(2)).
2)
The Panel’s holding that the United States Supreme Court’s
decision in eBay overrules this Circuit’s application of the presumption of
irreparable harm to preliminary injunctions involving copyright infringement
claims conflicts both with the eBay decision, which specifically declined to
1
address this issue, and with contrary decisions of other courts. (FRAP
35(b)(1)(A),(B)).
3)
The Panel’s overruling of this Circuit’s longstanding rule
applying the presumption of irreparable harm to copyright infringement
claims, even though this rule was in effect when Congress adopted the
Copyright Act of 1976, conflicts with the Supreme Court’s long espoused
principle that Congress is deemed to legislate against the backdrop of
judicial precedent and to adopt long-established practices, unless Congress
clearly indicates otherwise in the statute or legislative history. See Consol.
Rail Corp. v. Gottshall, 512 U.S. 532, 542-44 (1994); Ankenbrandt v.
Richards, 504 U.S. 689, 700-01 (1992). (FRAP 35(b)(1)(A)).
4)
The Panel’s Opinion makes it significantly more difficult for
copyright owners to enforce their rights, at a time when copyright
infringement on the Internet is epidemic. The Panel’s Opinion gives Internet
thieves an even greater advantage. It thus conflicts with this Circuit’s
decision in Fair Housing Council of San Fernando Valley v.
Roommates.Com, LLC, 521 F.3d 1157, 1164 n.15 (9th Cir. 2008) (en banc)
(“Roommates”), which states that Internet businesses should not be given
2
“an unfair advantage over their real-world counterparts.” (FRAP
35(b)(1)(A)).
5)
The Panel’s Opinion conflicts with this Court’s decision in
Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873
(2009) (“Marlyn”), which continued to apply the presumption of irreparable
harm to trademark infringement claims after eBay. (FRAP 35(b)(1)(A)).
6)
Material points of fact and law were overlooked in the Panel’s
decision that Perfect 10 had not established that it would suffer irreparable
harm in the absence of injunctive relief. (FRAP 40(a)(2)).
B.
Reasons For Petition.
Plaintiff-Appellant Perfect 10, Inc. (“Perfect 10” or “P10”) petitions
for rehearing and rehearing en banc because the Panel’s Opinion overruled
the presumption of irreparable harm in copyright infringement cases only by
misconstruing the Supreme Court’s eBay decision. The Panel failed to
consider that the presumption historically has been part of traditional
equitable practice for centuries, as well as Congressional intent in passing
the Copyright Act of 1976. The Panel also ignored significant differences
between: (i) permanent and preliminary injunctions; (ii) the language of the
Copyright and Patent Act; and (iii) the categorical rule at issue in eBay and
3
the presumption at issue here. Moreover, the Panel overlooked material
evidence establishing that Perfect 10 has been irreparably harmed by
Google’s conduct. As a result, the Panel failed to address critical errors in
the district court’s substantive rulings.1
The Panel’s new requirement that copyright holders demonstrate
irreparable harm to obtain preliminary injunctive relief alters long-settled
expectations and disrupts a remedial scheme that has been operating for
hundreds of years. Because of the Panel’s ruling, it is now nearly impossible
for copyright holders to enjoin the theft of their intellectual property.
Furthermore, copyright holders have no guidance as to what constitutes a
compliant DMCA notice or how they can protect their intellectual property
without it being republished on the Internet. The Congressional
International Anti-Piracy Caucus has estimated that global copyright
1
Such errors include rulings that: (i) copies of infringed images do not
identify those images for purposes of §512(c)(3)(a)(ii) of the DMCA [RB2023;OB36-41;RB10;RB13;RB15]; (ii) Google need not use imagerecognition to find and remove infringing images, despite evidence that
Google can readily do so [ER20092-94¶¶23-24;OB56]; and (iii) Google is
not contributorily liable for forwarding DMCA notices to chillingeffects.org
and then creating thousands of links to the infringing images in those notices
[RB32-35;ER20082-88¶¶10-15;ER20113-142]. Opinion at 10123.
4
infringement costs American companies over $25 billion in lost sales
annually.2 Rehearing is necessary so that this Circuit may address this evergrowing problem of Internet piracy. At the very least, before this Circuit
takes the monumental step of eliminating the presumption of irreparable
harm, it should permit the parties and amici to brief the issue further.
II.
THE PANEL RELIED UPON eBAY TO REVERSE
LONGSTANDING PRECEDENT WITHOUT ENGAGING IN
THE VERY ANALYSIS REQUIRED BY eBAY.
The Panel recognized that this Circuit has long followed the rule that,
for purposes of a preliminary injunction, “[a] showing of a reasonable
likelihood of success on the merits in a copyright infringement claim raises a
presumption of irreparable harm.” Opinion at 10125, quoting Apple
Computer, Inc. v. Formula International, Inc., 725 F.2d 521, 525 (9th Cir.
1984). The Panel stressed that this Circuit has “repeated and relied on this
rule numerous times in the nearly three decades since Apple Computer.” Id.
2
See
http://hatch.senate.gov/public/index.cfm/releases?ContentRecord_id=b1094
14b-1b78-be3e-e0b8-34869d0477c4&ContentType_id=7e038728-1b1846f4-bfa9-f4148be94d19&Group_id=e5b4c6c5-4877-493d-897bd8ddac1a9a3e&MonthDisplay=5&YearDisplay=2010
5
Nevertheless, the Panel held that its “longstanding rule” was “clearly
irreconcilable with the reasoning” of the Supreme Court’s decision in eBay,
“and has therefore been effectively overruled.” Opinion at 10128 (citation
and quotation omitted).
The Panel’s ruling is actually contrary to eBay’s reasoning.
Moreover, the Panel failed to apply the very analysis required by eBay. As
explained below, the Panel’s reliance upon eBay to overrule the presumption
of irreparable harm in copyright infringement claims is incorrect, for at least
six reasons.
A.
The eBay Decision.
In eBay, the Supreme Court considered a decision holding that
MercExchange was entitled to a permanent injunction in its patent
infringement action against eBay. eBay, 547 U.S. at 391. The Federal
Circuit had applied its rule that “a permanent injunction will issue once
infringement and validity have been adjudged.” Id. at 393-94. The Supreme
Court reversed, holding that “the traditional four-factor framework that
governs the award of injunctive relief” applies to “disputes under the Patent
Act” and that a permanent injunction in a patent infringement case may issue
only in accordance with “traditional principles of equity.” Id. at 394. The
6
Court stressed that “a major departure from the long tradition of equity
practice should not be lightly implied.” Id. at 391, quoting Weinberger v.
Romero-Barcelo, 456 U.S. 305, 320 (1982).
Moreover, seven justices, in concurring opinions, stressed the
importance of historical traditions in determining how to apply the fourfactor test for injunctive relief. Chief Justice Roberts, joined by Justices
Scalia and Ginsberg, stressed that
there is a difference between exercising equitable discretion
pursuant to the established four-factor test and writing on an
entirely clean slate. Discretion is not whim, and limiting
discretion according to legal standards helps promote the basic
principle of justice that like cases should be decided alike.
When it comes to discerning and applying those standards, in
this area as others, a page of history is worth a volume of
logic.
Id. at 395 (quotations and citations omitted; emphasis added). Justice
Kennedy likewise noted in his concurrence that historical practice “is most
helpful and instructive when the circumstances of a case bear substantial
parallels to litigation the courts have confronted before.” Id. at 396. Justice
7
Kennedy appeared most concerned with granting automatic injunctions to
so-called patent trolls, who do not manufacture or sell products employing
the patent, but merely license the patent. Id. at 396-97.
B.
The eBay Court Specifically Declined To Address The
Presumption At Issue In This Case.
The Panel’s holding that eBay’s reasoning effectively overrules this
Circuit’s presumption of irreparable harm ignores the fact that the eBay
Court specifically chose not to address such a presumption. In addition to
the Federal Circuit’s rule that a permanent injunction must issue once
infringement and validity of the patent have been adjudged, the parties also
asked the eBay Court to address the Federal Circuit’s narrower rule that
irreparable harm is irrebuttably presumed in such cases. The eBay Court
declined to address this rule, never once stating that a presumption of
irreparable harm in intellectual property cases (rebuttable or not) is contrary
to traditional equitable principles. See H. Tómas Gómez-Arostegui, What
History Teaches Us About Copyright Injunctions and The InadequateRemedy-At-Law Requirement, 81 S.Cal.L.Rev. 1197, 1208 & n.35 (2008)
8
(“Copyright Injunctions”), found at Attachment 3 hereto.3 As Professor
Gómez-Arostegui notes, the Supreme Court could not have made such a
statement, because it did not undertake any analysis of the role the
presumption of irreparable harm played in early patent or copyright cases.
Id. Furthermore, none of the three copyright cases cited by the eBay Court
dealt with the presumption of irreparable harm.4
3
Although Professor Gómez-Arostegui sometimes uses the phrase
“inadequate-remedy-at-law requirement,” this term is essentially
synonymous with the requirement of irreparable harm. See, e.g.,
Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 584-85 (1952)
(“these two contentions are here closely related, if not identical”); Fleet
Wholesale Supply Co., Inc. v. Remington Arms Co., Inc., 846 F.2d 1095,
1098 (7th Cir. 1988) (“a conclusion that the injury is irreparable necessarily
shows that there is no adequate remedy at law. To say that the injury is
irreparable means that the methods of repair (remedies at law) are
inadequate.”) (citation omitted).
4
In two cases, the Court stated that copyright injunctions should not
automatically issue upon a finding of infringement when the public interest
weighs against issuance. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569,
578 n.10 (1994); N.Y. Times Co. v. Tasini, 533 U.S. 483, 504-05 (2001). In
the third case, the Court affirmed the denial of an injunction mainly on the
ground that the balance of hardships tipped in defendant’s favor. Dun v.
Lumbermen’s Credit Ass’n, 209 U.S. 20, 22-23 (1908). See Copyright
Injunctions, supra, 81 S.Cal.L.Rev. at 1208 n.38.
9
C.
An Historical Analysis Of Copyright Law Establishes That
The Presumption Of Irreparable Harm Was Part Of A
Long Tradition Of Equity Practice, Going Back To The
17th Century.
The Panel’s Opinion stresses that, under eBay, “courts must analyze
each statute separately to determine whether Congress intended to make ‘a
major departure from the long tradition of equity practice’ and create a
statutory presumption or categorical rule for the issuance of injunctive
relief.” Opinion at 10128 n.2, quoting eBay, 547 U.S. at 391. The Panel
never engaged in such analysis, however. Nor, as explained above, did the
eBay Court. 5 The Supreme Court has never stated, in eBay or any other
case, that a presumption of irreparable harm in copyright infringement cases
runs counter to traditional equitable principles. Professor GómezArostegui’s detailed analysis in Copyright Injunctions, discussed below,
demonstrates that the presumption of irreparable harm in copyright
infringement cases was part of traditional equity practice going back to at
5
Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010), upon which the Panel
relied [Opinion at 10127], likewise failed to undertake such analysis.
10
least the 17th Century.
The Supreme Court has held that “the equity jurisdiction of the federal
courts is the jurisdiction in equity exercised by the High Court of Chancery
in England at the time of the adoption of the Constitution and the enactment
of the original Judiciary Act” – approximately 1789. Grupo Mexicano de
Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308, 318 (1999). In
1789, and in all preceding years in which the Chancery heard infringement
cases, the requirement of irreparable harm “played no active role in deciding
whether to issue a copyright injunction. … On the contrary, the historical
record suggests that in copyright cases, legal remedies were deemed
categorically inadequate.” Copyright Injunctions, supra, at 1201.
Moreover, “cases continued to reject any objection that an adequate remedy
could be had at law in copyright cases late into the nineteenth century.” Id.
at 1277. For example, an 1803 case, Hogg v. Kirby, 8 Ves. Jr. 215, 225, 32
Eng. Rep. 336, 340 (Ch. 1803), held that the principle of granting injunctive
relief in copyright cases was that a damages remedy was inadequate per se.
Id.
Based on his detailed historical analysis, Professor Gómez-Arostegui
concludes that
11
[t]he historical record shows that legal remedies were deemed
categorically inadequate in copyright cases, and that by 1789,
the Chancery’s jurisdiction to issue copyright injunctions had
become concurrent and incontestable. The Supreme Court could
thus hold today, without running afoul of traditional equitable
principles, that a copyright injunction can issue without regard
to the adequacy of legal remedies.
Id. at 1197-98. Professor Gómez-Arostegui further concludes that “federal
courts must consider eliminating the inadequate-remedy-at-law requirement
as a threshold requirement for all copyright injunctions ... Eliminating the
inadequacy requirement would thus bring courts in line with traditional
equitable principles, rather than running afoul of them.” Id. at 1280
(emphasis added).
In short, the analysis of traditional equity practice required by eBay
establishes that this Circuit’s longstanding rule, that a showing of reasonable
likelihood of success on the merits in copyright infringement claims raises a
presumption of irreparable harm, is consistent with such practice, and should
not have been overruled.
12
D.
The Panel’s Opinion Conflicts With Congressional Intent
Regarding The Presumption Of Irreparable Harm.
The Supreme Court has held that where there is no indication that
Congress intended to change the meaning courts have given to a statute,
courts must presume that Congress did not intend a change. Gottshall, 512
U.S. at 542-44; Ankenbrandt, 504 U.S. at 700-01. Section 502 of the
Copyright Act, enacted in 1976, neither mentions equitable principles nor
specifically prohibits the presumption of irreparable harm. The presumption
of irreparable harm clearly existed before Congress adopted the 1976 Act.
See, e.g., American Metropolitan Enterprises, Inc. v. Warner Bros. Records,
389 F.2d 903, 905 (2d Cir. 1968). Congress is presumed to have been aware
of this presumption when it adopted Section 502 in the 1976 Act. See
Weinberger, 456 U.S. at 313 (“considerations applicable to cases in which
injunctions are sought in the federal courts reflect a ‘practice with a
background of several hundred years of history,’ a practice of which
Congress is assuredly well aware”). Nowhere in the 1976 Act, however, did
Congress disapprove of this presumption. On the contrary, the legislative
history of the 1976 Act indicates that Congress did not intend to alter the law
or previous practices of the courts. Copyright Injunctions, supra, at 1205-06
13
n.20. The Panel’s Opinion overruling the presumption thus conflicts with
Congressional intent and the Supreme Court’s Gottshall and Ankenbrandt
decisions.
E.
The Presumption Of Irreparable Harm Is Not Equivalent
To The Categorical Rule Rejected In eBay.
The Panel mistakenly concluded that the eBay Court’s analysis
applied to both categorical rules and presumptions. Opinion at 10125.
Because the eBay Court’s reasoning is inapplicable to presumptions, courts
have concluded that “the presumption of irreparable harm in the context
of preliminary injunctions should survive eBay.” Powell v. Home Depot
U.S.A., Inc. ., 2009 WL 3855174, *13 (S.D.Fla., Nov. 17, 2009) (emphasis
added). As the Powell court explained:
[T]he presumption of irreparable harm in preliminary
injunctions is not inconsistent with eBay because the
presumption does not constitute the “automatic” approach in
granting injunctive relief in patent cases. What concerned the
eBay Court was the categorical approach in granting or denying
injunctive relief without properly considering the equities. See
eBay, 547 U.S. at 393-94 (“Just as the District Court erred in its
14
categorical denial of injunctive relief, the Court of Appeals
erred in its categorical grant of such relief.”) ... The
presumption of irreparable harm, however, does not mean and
is not equal to automatically granting injunctive relief after
finding infringement and validity of patent, because the
presumption only shifts the burden to the infringer for rebuttal.
... Moreover, the presumption does not ignore the other two
necessary steps in the preliminary injunction analysis: balance
of hardships and public interest. Because the likely infringer
may or may not successfully rebut the presumption of
irreparable harm, and because the balance of hardships and
public interest may or may not outweigh the irreparable harm,
the presumption itself does not force any court to automatically
grant or deny a preliminary injunction. Therefore, the
presumption is not inconsistent with eBay.
Id. Rehearing is thus necessary to address the Panel’s incorrect attempt to
equate the presumption of irreparable harm with “a rule that an injunction
automatically follows a determination that a copyright has been infringed.”
Opinion at 10127, quoting eBay, 547 U.S. at 392-93.
15
F.
The Patent Act Specifically Provides For Application Of
Equitable Principles, While The Copyright Act Does Not.
The Panel’s reliance upon eBay was flawed because the language of
the current Copyright Act is different than the Patent Act. The Patent Act
specifically requires the application of equitable principles, providing that
courts “may grant injunctions in accordance with the principles of equity
to prevent the violation of any right secured by patent, on such terms as the
court deems reasonable.” 35 U.S.C. §283 (emphasis added). By contrast,
the Copyright Act provides only that courts “may” grant injunctive relief “on
such terms as [they] may deem reasonable to prevent or restrain
infringement of a copyright.” 17 U.S.C. §502(a).
G.
The Preliminary Injunction At Issue Here Is Not
Comparable To The Permanent Injunction At Issue In
eBay.
Policy reasons further compel a distinction between the permanent
injunction addressed in eBay and preliminary injunctive relief:
Unlike a permanent injunction, which resolves the merits of a
claim and imposes an equitable remedy because a legal one is
inadequate [citing eBay], a preliminary injunction maintains a
16
particular relationship between the parties in anticipation of a
decision on the merits, pending completion of the litigation.
United States Department of Labor v. Wolf Run Mining Co., 452 F.3d 275,
280 (4th Cir. 2006)(emphasis added). Preliminary injunctions are
considered when a lawsuit’s factual development is limited and are meant to
preserve the status quo pending trial. They are temporary and will expire
once the case’s merits are decided. Accordingly, plaintiffs should not have
to prove irreparable harm at the preliminary injunction stage. Indeed, courts
have applied the presumption of irreparable harm to preliminary injunctions
after eBay, even in the patent context. See, e.g., Abbott Labs. v. Andrx
Pharms., Inc., 452 F.3d 1331, 1347 (Fed. Cir. 2006) (“we conclude that
Abbott has not established a likelihood of success on the merits. As a result,
Abbott is no longer entitled to a presumption of irreparable harm.”); Eisai
Co., Ltd. v. Teva Pharms. USA, Inc., 2008 WL 1722098, *10 (D.N.J., Mar.
28, 2008)(“Aside from the fact that this is a preliminary injunction, this
Court observes that the standard rejected by the Supreme Court in eBay was
one in which the Federal Circuit applied a presumption that the injunction
should issue, not a presumption that one of the four prongs-irreparable harm-
17
exists.”); Christiana Industries v. Empire Electronics, Inc., 443 F.Supp.2d
870, 884 (E.D.Mich.2006)(“eBay did not invalidate the presumption.”).
III.
THE PANEL’S OPINION IS CONTRARY TO THE
PRINCIPLES ESPOUSED IN THIS COURT’S ROOMMATES
DECISION.
This Circuit has emphasized that Internet businesses that violate the
law should not receive preferential treatment over regular merchants:
The Internet … has become a dominant – perhaps the
preeminent – means though which commerce is conducted.
And its vast reach into the lives of millions is exactly why we
must be careful not to … give online business an unfair
advantage over their real-world counterparts, which must
comply with the laws of general applicability.
Roommates, 521 F.3d at 1164 n.15 (emphasis added). Similarly, during oral
argument, Chief Justice Kozinski cautioned Google’s counsel “not to rely on
the difference between physical space and cyber space” in attempting to
distinguish this case from Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d
259 (9th Cir. 1996). Transcript, 34:23-35:13, found at Attachment 2 hereto.
By making it substantially more difficult, if not impossible, for
18
copyright holders to enjoin infringement of their intellectual property on the
Internet, the Panel’s Opinion contravenes the above principles and
significantly increases the gap between cyberspace and the real world. A
brick-and-mortar business whose property is stolen may turn to the police
for immediate assistance. The damage suffered by such real-world theft is
presumed. Here, by contrast, it is no longer presumed that the massive theft
of intellectual property on the Internet irreparably harms copyright holders
such as Perfect 10. Rehearing is necessary, because the Panel’s Opinion
undermines Roommates and effectively “create[s] a lawless no-man's-land
on the Internet.” Roommates, 521 F.3d at 1164.
IV.
THE PANEL’S OPINION CONFLICTS WITH THIS COURT’S
OPINION IN MARLYN.
The Panel’s overruling of the presumption of irreparable harm in
copyright infringement cases conflicts with Marlyn. In Marlyn, decided
after eBay, this Court continued to apply the presumption of irreparable
harm to a trademark infringement claim. 571 F.3d at 877. The Panel failed
to address this conflict. Opinion at 10128 n.2.
Application of the presumption of irreparable harm to trademark
claims, but not copyright claims, is neither reasonable nor logical. Both
19
copyrights and trademarks are intangible, intellectual property rights.
Accordingly, rehearing en banc is necessary to resolve the conflict created
by the Panel’s Opinion.
V.
THE OPINION’S RULING REGARDING IRREPARABLE
HARM OVERLOOKED MATERIAL POINTS OF FACT AND
LAW.
The Panel erred in ruling that Perfect 10 had not established that it
was likely to suffer irreparable harm because it “has not shown a sufficient
causal connection between irreparable harm to Perfect 10’s business and
Google’s operation of its search engine.” Opinion at 10130. This erroneous
ruling overlooked material points of fact and law:
1)
Perfect 10 submitted an enormous amount of evidence of
ongoing harm to its business as a result of Google’s conduct, including:
(i) Google’s current display of over 22,000 Perfect 10 thumbnails
[ER20186-90¶¶6-7;ER30001-16]; (ii) use of those thumbnails by Google
users to view or download tens of millions of infringing full-size P10
Images from websites to which Google links these thumbnails [OB8081;ER20249¶86;ER40200-210;ER60233¶66;ER80181-185]; (iii) millions of
downloads of full-size P10 Images using unauthorized passwords freely
20
available from Google [FER78-113;OB15;ER20193-194¶12;ER3002429;ER20247-249¶85;ER40196-199]; and (iv) Google’s ongoing
republication and display of tens of thousands of P10 Images from Perfect
10’s DMCA notices, thereby making those images permanently available for
free on the Internet. OB74-76;ER20082-88¶¶10-15;ER20113-142. Such
evidence, which Google failed to refute, was never addressed by the Panel.6
2)
Instead of considering the above evidence, the Panel
unrealistically focused on Perfect 10’s “fail[ure] to submit a statement from
even a single former subscriber who ceased paying for Perfect 10’s service
because of the content freely available via Google.” Opinion at 10129. A
statement from one former Perfect 10 subscriber is significantly weaker than
Perfect 10’s evidence, which demonstrates that hundreds of millions of
Google users have no reason to join perfect10.com, because Google offers
for free virtually everything Perfect 10 sells. ER20186-190¶¶6-7;ER3000130016;ER20191-20201¶¶11-16;ER30017-30076. Moreover, this statement
would be difficult to obtain because it would force the former subscriber to
6
Instead, the Panel apparently accepted the mistaken and unsupported
assertion of Google’s counsel that “there’s nothing left to enjoin.”
Transcript, 24:25-25:1; 32:11-12.
21
admit he was committing copyright infringement.
3)
The Panel mistakenly relied upon Dr. Zada’s alleged
acknowledgment that “search engines other than Google contribute to
making Perfect 10 images freely available.” Opinion at 10129. Such
reliance is improper for at least two reasons. First, the startling implication
of the Panel’s analysis is that if numerous parties, including Google, are all
engaging in copyright infringement by making P10 Images freely available
without Perfect 10’s consent, Perfect 10 cannot obtain injunctive relief
against any of these parties, even though they are all responsible for the
harm suffered by Perfect 10. This conclusion would turn copyright law on
its head and effectively prevent copyright holders from obtaining relief for
infringement of their works on the Internet. Second, the Panel misused the
language quoted from Dr. Zada’s declaration, which was included to show
that Dr. Zada had sufficient expertise to testify regarding Google’s
operations, not that there was massive infringement by other search engines.
ER20182. The Panel’s reliance upon Dr. Zada’s viewing of websites such
as Yahoo! is particularly inappropriate, because Perfect 10 submitted
evidence that Yahoo! took only three days to process DMCA notices that
Google refused to process. ER20246-247¶83;ER40180;40182;40185-189.
22
4)
The Panel appeared to erroneously assume that monetary
damages sufficient to compensate Perfect 10 for the harm it has suffered are
available. As a result of the Panel’s failure to address any aspect of the
merits of Perfect 10’s copyright claims [Opinion at 10130 n.3], any such
remedy is years away. Because the district court incorrectly ruled that all of
Perfect 10’s Group C notices are deficient and made many other critical
errors, Perfect 10 is now forced to try the remaining small portion of the
case, once again appeal the district court’s ruling, and then retry the case if it
receives a favorable ruling on appeal. The evidence suggests that Perfect 10
may not be able to survive to reach that point [ER20076-77¶2;ER20186190¶¶6-7;ER30001-16;ER20201-204¶17;ER30077-98;ER20082-85¶¶1011;ER20113-20125].
VI.
CONCLUSION.
For the foregoing reasons, Perfect 10 respectfully requests that this
Court grant its petition for rehearing and rehearing en banc.
Dated: August 17, 2011
Respectfully submitted,
By:___________________________
Jeffrey N. Mausner
David N. Schultz
Law Offices of Jeffrey N. Mausner
Attorneys for Plaintiff-Appellant
Perfect 10, Inc.
23
CERTIFICATE OF COMPLIANCE PURSUANT TO
CIRCUIT RULES 35-4 and 40-1
I certify that pursuant to Circuit Rules 35-4 and 40-1, the attached
PETITION FOR PANEL REHEARING AND FOR REHEARING EN
BANC is proportionately spaced, has a typeface of 14 points, and contains
4,197 words (petitions and answers must not exceed 4,200 words).
Dated: August 17, 2011
Respectfully submitted,
By:_______________________________
Jeffrey N. Mausner
Law Offices of Jeffrey N. Mausner
Attorneys for Plaintiff-Appellant
Perfect 10, Inc.
24
CERTIFICATE OF SERVICE
I hereby certify that I electronically filed the foregoing Petition for Panel
Rehearing and for Rehearing En Banc with the Clerk of the Court for the United
States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF
system on August 17, 2011.
I certify that all participants in the case are registered CM/ECF users and
that service will be accomplished by the appellate CM/ECF system.
Dated: August 17, 2011
Respectfully submitted,
By_______________________________
Jeffrey N. Mausner
Law Offices of Jeffrey N. Mausner
Attorneys for Plaintiff-Appellant
Perfect 10, Inc.
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?