On April 15, 2025, after jurors found a line of dolls from the toymaker, MGA Entertainment, Inc. (“MGA”), infringed the trade dress rights of a pop group owned by music artists Clifford "T.I." Harris and Tameka "Tiny" Harris, the U.S. District Court for the Central District of California (Case No. 2:20-cv-11548-JVS-AGR) granted entry of an approximately $71 million judgment in favor of the Harrises. In the same order, however, the Court denied the Harrises’ motion for a permanent injunction enjoining MGA’s continued infringing use of the trade dresses at issue after finding that MGA had successfully rebutted the statutory presumption of irreparable harm.

For background, the Trademark Modernization Act of 2020 (the “TMA”), which expressly sought to promote trademark protections for brand owners, amended the Lanham Act such that any plaintiff seeking an injunction of trademark or trade dress infringement “shall be entitled to a rebuttable presumption of irreparable harm” upon a finding of infringement or even a likelihood of success on the merits of a claim for infringement. 15 U.S.C. § 1116(a). In doing so, the amendment made it easier for brand owners to secure injunctive relief immediately halting further infringement.

Pursuant to the TMA, the Court in MGA held that the Harrises were entitled to a rebuttable presumption of irreparable harm in their request for an injunction, which would have been a “cherry on top” to their $71 million judgment. However, the Court declined the request after concluding that MGA had successfully rebutted the presumption by proving that it had ceased manufacturing, selling, and advertising the infringing dolls. The Court also emphasized that the Harrises failed to present any concrete evidence of reputational harm or business loss, especially since they did not compete in the doll market nor had credible future merchandising plans. Given those factors, a permanent injunction was unwarranted despite the jury’s conclusive findings of infringement.

More broadly, MGA is the latest of a growing trend of cases scrutinizing the “rebuttable presumption of irreparable harm” that the TMA imposed in protection of brand owners. Indeed, MGA cites to another recent decision from the same court, Kahala Franchising, LLC v. Real Faith, LLC, 2022 WL 1605377, at *5 (C.D. Cal. May 20, 2022), in which the owner of the Pinkberry yogurt brand failed to obtain a preliminary injunction against a rogue “holdover” franchisee that successfully rebutted the presumption with evidence that it was “continuing to operate as a successful franchise.” Brand owners should monitor this line of authorities as it potentially weakens one of the TMA’s central protections.

KEY TAKEAWAYS:

• The TMA made it easier for brand owners to secure injunctive relief that would immediately stop further infringement by providing plaintiffs with a “rebuttable presumption of irreparable harm” upon a finding of trademark or trade dress infringement.

• However, MGA is the latest of a growing trend of cases revealing the limits of the “rebuttable presumption” enjoyed by brand owners. Even where brand owners have already been awarded damages for infringement, they may be unable to obtain injunctive relief absent any concrete evidence of continued losses attributable to the infringers’ ongoing conduct.