U.S. Fourth Circuit Upholds Denial of Preliminary Injunction in Video Game Copyright Litigation

In an unpublished opinion, the U.S. Court of Appeals for the Fourth Circuit affirmed a Maryland federal court’s denial of Bethesda Softworks, LLC’s motion for preliminary injunction on claims that defendant Interplay Entertainment Co. infringed its copyrights relating to the “Fallout” video game series. Bethesda Softworks, LLC v. Interplay Entertainment Co., No. 11-1860 (4th Cir. Oct. 26, 2011). The Fourth Circuit agreed with the district court’s conclusion that Bethesda Softworks failed to establish a likelihood of irreparable harm–a prerequisite for preliminary injunctive relief. In its non-precedential decision, the court held that–

  • A provision in the parties’ agreement stating that a breach would “result in irreparable injury for which there is no adequate remedy at law,” was not binding upon the district court.
  • The defendant’s alleged insolvency did not mandate a finding that damages would be an inadequate remedy or that preliminary injunctive relief was proper, because the “injunctive relief that Bethesda seeks would not preserve Interplay’s assets such that Interplay could satisfy a judgment in the event Bethesda prevails on the merits.”
  • The U.S. Supreme Court’s decision in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), which held that courts should not presume that permanent injunctive relief is appropriate whenever a plaintiff establishes a case of patent infringement, applies with equal force to requests for preliminary injunctions in copyright infringement cases.
  • The district court did not err in rejecting Bethesda Softworks’s contention that its alleged loss of intangible rights in the copyrighted material alone established irreparable harm, because “[t]here is no evidence that the development has been made public to anybody.”
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