Intellectual Property

The High Burden To Restrain Negative Reviews On Amazon And Other Sites

A key element of any motion for temporary restraining order or preliminary injunction is demonstrating the likelihood of irreparable harm. In federal cases, the standard is provided by Federal Rule of Civil Procedure 65, and case law has made it clear that this type of relief is considered an extraordinary and drastic remedy.

The high burden of proof was recently on full display in a federal case pending in the Central District of California between Lollicup USA, Inc. and Kenny Jin, et al. There, the court denied Lollicup USA’s application for a temporary restraining order, without prejudice, due to its inability to successfully demonstrate that irreparable harm is likely to be suffered absent the issuance of an order in favor of the plaintiff.

The court began by explaining a distinction between two forms of relief sought by way of filing a motion for preliminary injunction. There are prohibitory injunctions that prohibit parties from taking action, preserving the status quo pending a determination of the action on the merits. Alternatively, a mandatory injunction orders a responsible party to take action. Mandatory injunctions are particularly disfavored and are generally not granted unless extreme or very serious damage will result. They will not be issued when the injury is capable of compensation in damages.

Lollicup USA was seeking a mandatory injunction order. It wanted to enjoin a defendant from selling children’s masks on that allegedly infringe on Lollicup’s intellectual property rights. Specifically, Lollicup USA complained that negative reviews on irreparably harm its brand’s goodwill and reputation with the public.

The court recognized that harm to a business’ goodwill and reputation is unquantifiable and considered irreparable; however, the court agreed with the defendant’s contention that Lollicup USA failed to demonstrate harm to the goodwill and reputation of its brand even though courts have recognized that negative reviews can cause irreparable harm. It distinguished between an instance where a plaintiff presents evidence that a negative review was left on the plaintiff’s page and where the reviews are made on a third party’s page, as was true in the instant case. Additionally, the court noted that many of the reviews left on the defendant’s page were overwhelmingly positive.

Lollicup USA was deemed to have failed to show that the negative reviews harm its reputation with the public and the motion was denied, but the judge finished the ruling with an interesting paragraph that begins with a line that states, “Let me drop the third person for a moment.”

“Although I’ve denied the Application, there potentially is wrongful conduct here,” wrote the judge. “I’m not going to grant summary judgment before any discovery, but I will offer two things to Lollicup. The first is the denial without prejudice. Lollicup may file a motion for preliminary injunction if it gathers additional evidence of harm that is not compensable by damages. The second is a quick case schedule and a prompt trial date, if the pandemic allows.”