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Keywords

damageslitigationinjunctionappealcopyright

damagesinjunction

Related Cases

Nintendo of America, Inc. v. Lewis Galoob Toys, Inc., 16 F.3d 1032, 1994 Copr.L.Dec. P 27,220, 28 Fed.R.Serv.3d 74, 29 U.S.P.Q.2d 1857

Facts

Nintendo of America, Inc. manufactured the Nintendo Entertainment System (NES), which was highly popular in the late 1980s and early 1990s. Lewis Galoob Toys, Inc. announced the Game Genie, a device allowing NES owners to modify video games, which generated significant consumer interest. However, Nintendo obtained a preliminary injunction against Galoob shortly after the announcement, claiming copyright infringement. Galoob later prevailed in the underlying litigation, leading to the execution of the bond Nintendo had posted as security for the injunction.

Nintendo of America, Inc. manufactured the Nintendo Entertainment System (NES), which was highly popular in the late 1980s and early 1990s.

Issue

Whether Galoob was wrongfully enjoined and entitled to execute the bond posted by Nintendo for the preliminary injunction.

The first issue we consider is whether Galoob was wrongfully enjoined.

Rule

A party has been wrongfully enjoined under Rule 65(c) when it is ultimately found that the enjoined party had the right to do what it was enjoined from doing, and there is a rebuttable presumption that a wrongfully enjoined party is entitled to recover damages up to the amount of the bond.

Under this rule, before a court may execute a bond, it must find the enjoined or restrained party was 'wrongfully enjoined or restrained.'

Analysis

The court determined that Galoob was wrongfully enjoined because it ultimately prevailed in the underlying litigation, establishing its right to sell the Game Genie. The court also found that Nintendo failed to rebut the presumption that Galoob was entitled to the bond amount, as Galoob proved with reasonable certainty that it suffered damages due to the injunction. The district court's calculations of lost sales and profit margins were deemed reasonable and not clearly erroneous.

Galoob was wrongfully enjoined from selling the Game Genie. As a result, it was presumptively entitled to recover damages.

Conclusion

The Court of Appeals affirmed the district court's decision to execute the entire $15 million bond in favor of Galoob, concluding that Galoob was wrongfully enjoined and entitled to recover its damages.

Galoob was entitled to have the full amount of the bond executed in its favor.

Who won?

Lewis Galoob Toys, Inc. prevailed in the case because it was found to have been wrongfully enjoined from selling the Game Genie and successfully established its damages.

Galoob proved with reasonable certainty it was damaged by the issuance of the injunction.

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