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Preliminary Injunction: Definition & Example

Instructor: Toni Bonton

Toni has taught personal finance and is currently pursuing a doctorate in business administration.

During the course of a lawsuit, it is important to ensure that both parties are treated fairly. This is sometimes done through court ordered injunctions that restrict certain behaviors. This lesson discusses the preliminary injunction.

Stop the Presses

After graduating from medical school, Scott decided to open a small medical laboratory with his best friend, Paul, to continue their research on the brain's ability to unlock its full potential. To protect years of research, they each thought it was best to sign a non-compete clause, which is an agreement that prevents either party from competing against the other by working for a competitor or starting a similar company. They felt like this was a smart move that would ensure that their groundbreaking research would not fall into the wrong hands should one of them not be able to continue with the company.

Recently, Scott and Paul have been working on a serum that may be the key to unlocking the full potential of the brain. After several lab trials, the serum shows promise and Paul is ready for the next step. Paul suggested that the lab begin human trials so they could prepare the serum for market; however, Scott is not so sure the serum is ready for that stage because the possible side effects could be harmful to humans. After months of arguing about the next step for the serum, Paul decides to leave the lab to start his own lab, promising to only use his research. Under the advice of his attorney, Scott sues Paul for breach of contract, or failure to abide by the terms of a contract.

Order in the Court

Because Paul has the intelligence and the skill to replicate and market the serum, Scott's attorney asks the court for a preliminary injunction. A preliminary injunction is a temporary court order granted during the early stages of a trial at the request of one party that prevents the other party from doing something specific until the trial is over and the court has issued a ruling or judgment. A good way to understand a preliminary injunction is to think of a trial as a boxing match. The preliminary injunction is the bell that makes the fighters return to their respective corners until a decision has been made.

If the judge grants the preliminary injunction, it means that Paul can't start his own trials or recreate the serum until the court rules in the case. When judges decide whether to issue a preliminary injunction, they look at four different elements.

The Checklist

To grant a preliminary injunction, the judge considers four key criteria.
PI_criteria

The first element is the likelihood of success based on the merits of the case. Scott has a good chance of winning the case because of the non-compete clause he and Paul signed when they formed their partnership. This is not necessarily a slam-dunk, but the case has enough merit to be successful. Even if the case lacked the certainty of success, if the case is serious enough to warrant further inquiry, then the criteria can still be met.

The second element is threat of irreparable harm to one of the parties. This does not have to be a physical harm. In this case, Scott's business may suffer irreparable harm if Paul is allowed to go ahead with his work on the serum. Scott may even have to close his lab because the trade secrets of his business will be in the hands of someone who can use those secrets against him.

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