“Traditional Principles of Equity?” How Seventh Circuit False Advertising Precedent Minimizes the Burden on Plaintiffs Who Move for Preliminary Injunctions

Companies advertise to gain a competitive edge, but sometimes these advertisements can be deceiving and harm consumers. Under the Lanham Act, plaintiffs can move for preliminary injunctions to stop or modify advertisements before a full trial on the merits of their false or deceptive advertising claims. Seventh Circuit Lanham Act precedent minimizes the burden on plaintiffs who move for preliminary injunctions. If the Seventh Circuit reversed this precedent, the burden on plaintiffs at this stage of the litigation would align both with equitable and economic principles. The Seventh Circuit recently upheld a preliminary injunction in Eli Lilly & Co. v. Arla Foods Inc., a false advertising case. However, the court relied on outdated precedent, potentially preventing itself from reaching an economically-sound decision. Together, Professor John Leubsdorf and Judge Richard Posner pioneered an economic approach to preliminary injunctive relief. Their approach guides district courts through a more reasoned economic analysis of the traditional preliminary injunction factors. In light of this economic view, Seventh Circuit false advertising precedent prevents courts from considering the economic impact of their decisions prior to a trial on the merits. First, the Seventh Circuit presumes irreparable harm in Lanham Act cases. Typically, the plaintiff has the burden of showing irreparable harm, and the Seventh Circuit’s presumption of irreparable harm eases the plaintiff’s burden on a motion for a preliminary injunction. Second, while the Seventh Circuit requires proof of actual consumer confusion or deception at trial, this evidence is not required at the preliminary injunction stage. This Comment will argue that in order to accurately understand the economic impact of a preliminary injunction on both the plaintiff and defendant, the Seventh Circuit should eliminate the presumption of irreparable harm and require proof of actual consumer confusion or deception at the preliminary injunction stage