Case ID: f-appx_403/html/0591-01.html
Source: Caselaw Access Project
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Date Created: 2024-08-24T03:29:51.129683

ESBIN & ALTER, LLP, Plaintiff-Appellant-Cross-Appellee, v. SABHARWAL, GLOBUS, & LIM, LLP, Defendant-Appellee-Cross-Appellant, Paul Zappier, Advanced Trade Settlement, LLC, Rad Technologies, Inc., Defendant-Appellees.
    Nos. 10-2419-cv(L), 10-2546-cv(XAP).
    United States Court of Appeals, Second Circuit.
    Dec. 17, 2010.
    
      Daniel S. Alter, Alter & Alter LLP, New York, NY, for AppellanNCross-Appellee.
    Paul M. Falker, Arent Fox LLP, New York, NY, for Appellee-Cross-Appellant.
    Marc Lieberstein, Frederick L. Whitmer, Kilpatrick Stockton LLP, New York, NY, for Defendant-Appellees.
    Present: ROSEMARY S. POOLER, BARRINGTON D. PARKER and RICHARD C. WESLEY, Circuit Judges.
   SUMMARY ORDER

Plaintiff-Appellant-Cross-Appellee Es-bin & Alter, LLP appeals from an order of the district court granting in part and denying in part Esbin & Alter’s request for preliminary injunctive relief enjoining Defendant-Appellees and DefendanL-Appellee-Cross-Appellant Sabharwal, Globus, & Lim, LLP, from distributing and continuing to use certain software in violation of Esbin & Alter’s copyright. We assume the parties’ familiarity with the underlying facts, procedural history, and issues presented on appeal.

We review the grant of a preliminary injunction for abuse of discretion. SEC v. Dorozhko, 574 F.3d 42, 45 (2d Cir.2009). A district court abuses its discretion “when (1) its decision rests on an error of law ... or a clearly erroneous factual finding, or (2) its decision — though not necessarily the product of a legal error or a clearly erroneous factual finding — cannot be located within the range of permissible decisions.” Kickham Hanley P.C. v. Kodak Ret. Income Plan, 558 F.3d 204, 209 (2d Cir.2009) (internal quotation marks and citation omitted).

A party seeking a preliminary injunction must generally demonstrate that it will suffer irreparable harm absent injunctive relief and either (1) that it is likely to succeed on the merits of the action, or (2) that there are sufficiently serious questions going to the merits to make them a fair ground for litigation, provided that the balance of hardships tips decidedly in favor of the moving party. Citigroup Global Mkts., Inc. v. VCG Special Opportunities Master Fund Ltd., 598 F.3d 30, 34-35 (2d Cir.2010). Moreover, as we explained in Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010), in the copyright context, courts must always consider the balance of hardships, even when the movant demonstrates a likelihood of success on the merits, and must also determine that an injunction would not disserve the public interest before issuing provisional relief. Id. at 79-80.

Additionally, in Salinger, we abrogated the longstanding practice in this Circuit of presuming irreparable harm upon a showing that a copyright plaintiff was likely to succeed on the merits of an infringement action. See id. at 75-76. In so doing, we explained that even where a plaintiff has demonstrated a likelihood of success on the merits, a “court may issue the injunction only if plaintiff has demonstrated that he is likely to suffer irreparable injury in the absence of an injunction,” and we cautioned courts not to “adopt a categorical or general rule or presume that the plaintiff will suffer irreparable harm....” Id. at 80 (internal quotation marks and citation omitted).

In this case, the district court awarded injunctive relief shortly before our decision in Salinger issued. Accordingly, the district court applied a presumption of irreparable harm upon a showing that Esbin & Alter was likely to succeed on the merits of its copyright infringement claim. However, after this Court’s decision in Salinger, that presumption no longer holds. Further, while the district court briefly addressed whether Esbin & Alter had made an independent showing of irreparable harm, we find the record below insufficient to conclude that Esbin & Alter would face irreparable harm absent injunctive relief. It appears no evidence was submitted to the district court regarding Esbin & Alter’s loss of market share or clients following Sabharwal, Globus, & Lim’s acquisition and use of the allegedly infringing software. Moreover, we are unable to locate any other evidence in the record establishing a connection between any alleged competitive harm Esbin & Alter might suffer, or has suffered, and Sabharwal, Globus, & Lim’s use of the software.

We also note that the irreparable harm analysis in Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3d Cir.1983), is distinguishable from the present case. Whereas the subject of the infringement action in Apple Computer (computer operating system software) was a portion of a product sold by defendant (a computer) that was itself in direct competition with plaintiffs product (a computer with operating system programs), Esbin & Alter and Sabharwal, Globus, & Lim are law firms whose principal products (legal services) appear to be supported by the subject of the underlying infringement action in this case (the software); that is, these two firms do not sell software directly. It does not necessarily follow that no irreparable harm can flow from any infringement in this case, but Esbin & Alter must make an affirmative showing of any such irreparable harm before injunctive relief is appropriate. Accordingly, we remand to the district court for fact-finding on the issue of irreparable harm as arising potentially from both the use and distribution of the software in question.

For the foregoing reasons, the preliminary injunction is VACATED and the case is REMANDED to the district court for additional fact finding on the issue of irreparable harm, which, at the judge’s discretion, may be consolidated with a trial on the merits. Within ten days of a decision of the district court, the jurisdiction of this Court may be restored by a letter from either party to the Clerk of the Court, see United States v. Jacobson, 15 F.3d 19, 22 (2d Cir.1994), in which event the renewed appeal(s) will be assigned to this panel. We have considered the parties’ remaining arguments and defer them until such time as there may be renewed appeals pending before this Court.