OPINION OF THE COURT
RENDELL, Circuit Judge.
We consider this case on an expedited appeal from the United States District
Upon application by Dam Things, the District Court granted a preliminary injunction forbidding Russ from selling any trolls after February 13, 2002.
Russ attacks the District Court's grant of the preliminary injunction on two grounds. First, Russ argues that the Dam Things troll, P1, does not qualify for copyright restoration, in part because Dam Things abandoned its copyright. Second, Russ contends that even if restoration is proper, the injunction was improvidently granted because the Russ trolls at least qualify for the safe harbor protection § 104A provides for derivative works.
We believe that the District Court properly determined that Dam Things was likely to establish that P1's copyright qualified for restoration and that this copyright was not abandoned by Dam Things. We find, however, that the District Court's subsequent analysis was flawed in two ways. First, the District Court conflated the tests for infringement and derivative works, and it therefore did not properly consider the possibility that any of the Russ trolls qualified for § 104A's safe harbor for derivative works. Second, the District Court did not conduct the proper comparison of each of the allegedly infringing Russ trolls against the restored Dam Things troll—P1. As we believe that the District Court based its grant of the injunction on an incomplete factual and legal analysis, we will vacate the injunction and remand for further consideration by the District Court in light of this opinion.
We note that the District Court's somewhat conclusory treatment of the issues, and trolls, may have been due to the parties' lack of clarity as to what troll designs were the subject of their arguments. Essentially, the parties label the trolls and group them as suits each party's interests. The parties' briefs accordingly ask us to rule in sweeping fashion as to the protection, or lack thereof, to be afforded to the various Russ and Dam Things trolls. The District Court's opinion adopts such a general approach in grouping all of the trolls together, referring to the Dam Things trolls generally as the "Good Luck Troll designs." The Court's reasoning, however,
In the 1950s, Thomas Dam, a Danish woodcarver, created a troll figure for his daughter out of rubber. He called it the "Good Luck Troll," claiming that it had the ability to bring good luck to whomever possessed it. Apparently, his creation garnered much attention from the community and Dam decided to sell trolls to the public. He first manufactured them in his home, and soon established a factory outside of his home for this purpose. An article from the Danish weekly magazine Se & HQr dated September 4, 1959, features a photograph of Thomas Dam's daughter holding the trolls and tells of the troll's rising popularity — amounting to sales of 10,000 trolls each month in Denmark alone. In 1961, the trolls began to be produced in PVC instead of rubber, increasing their durability. As the troll's success continued, Dam began selling his trolls in other countries. According to Dam Things, the Dam trolls were first sold in the United States in 1961.
In 1960, Thomas Dam applied for a United States design patent for a troll doll, and the patent was issued in 1961. This troll doll was later described by Thomas Dam as "girl-like" as opposed to the original "boy-like" troll, and certain photographs of the troll submitted with the application reflect that the troll has hair pulled back in a ponytail. Dam Things
In the early 1950s, Russell Berrie was a manufacturer's representative for two companies who sold Dam Things trolls. Berrie started his own company, Russ Berrie and Company, Inc. in 1963 and began to sell trolls manufactured by Dam Things' U.S. licensee, Royalty Design, using the Dam Things molds, in 1967. When Royalty Design went bankrupt, Russ then used the Dam Things molds to manufacture trolls. Berrie claims that in 1987 his company began to modify the trolls. In 1988, Russ sent a Dam Things troll "pencil topper" to be used to make a mold and to manufacture trolls in China. In 1988 Russ also sent to China a photo of a Dam Things troll from the Russ catalog for the purpose of making a mold and manufacturing
Dam Things now claims copyright infringement of its public domain troll. This unusual claim is made possible by an act of Congress and is grounded on Dam Things' assertion that its copyright in its original troll has been restored pursuant to 17 U.S.C. § 104A. In this legislation, Congress declared that a wide range of foreign works previously in the public domain in this country, perhaps for many years, are once again afforded copyright protection. The United States took this action in an effort to comply with agreements it had entered into with foreign governments regarding intellectual property rights. Although Russ points out the "extraordinary windfall" Dam Things will receive, and the "extraordinary burden" it will bear, if Dam Things' copyright is restored, the legislature's purpose in providing these protections for foreign copyright holders was to ensure greater protection for American copyright holders abroad.
This protection results from the United States' promise, in the context of the TRIPs
17 U.S.C. § 104A(h)(6)(A)-(D).
Dam Things claims that its copyright in its original troll qualifies for automatic restoration in accordance with § 104A. If it does, then the copyright "shall subsist for the remainder of the term of copyright that the work would have otherwise been granted in the United States if the work never entered the public domain in the United States." 17 U.S.C. § 104A(a)(1)(B).
Section 104A also provides some relief for "reliance parties" — American authors who copied the restored works while they were in the public domain in the United States. 17 U.S.C. § 104A(d)(2)-(3). Section 104A defines "reliance party" in relevant part as "any person who (A) with respect to a particular work, engages in acts, before the source country of that work becomes an eligible country, which would have violated section 106 if the restored work had been subject to copyright protection, and who, after the source country becomes an eligible country, continues to engage in such acts...." 17 U.S.C. § 104A(h)(4)(A).
Dam Things filed this copyright infringement suit on August 22, 2001. In its complaint, Dam Things sets forth six grounds for relief, and seeks thirteen forms of relief, including injunctive relief. On August 24, 2001, the District Court entered an "Order to Show Cause" as to "why an Order should not be entered for ... preliminary injunctive relief." Both
As Dam Things brought this action to enforce an alleged copyright, the District Court exercised jurisdiction pursuant to 28 U.S.C. § 1338(a). We exercise jurisdiction over this interlocutory appeal of the District Court's issuance of a preliminary injunction pursuant to 28 U.S.C. § 1291(a)(1). We review the District Court's issuance of the preliminary injunction for an abuse of discretion. The Court of Appeals for the Second Circuit has explained: "A district court may abuse its discretion by applying an incorrect legal standard or by basing the preliminary injunction on a clearly erroneous finding of fact." Waldman Publ'g Corp. v. Landoll, Inc., 43 F.3d 775, 780 (2d Cir.1994). In other words, we will still review the District Court's legal determinations and its application of the law to the facts de novo. See Southco, Inc. v. Kanebridge Corp., 258 F.3d 148, 150-51 (3d Cir.2001).
The District Court applied the established four-prong test in order to determine whether to grant Dam Things a preliminary injunction: "(1) whether the movant has shown a reasonable probability of success on the merits; (2) whether the movant will be irreparably injured by denial of the relief; (3) whether granting preliminary relief will result in even greater harm to the nonmoving party; and (4) whether granting the preliminary relief will be in the public interest." Dam Things from Denmark v. Russ Berrie & Co., 173 F.Supp.2d 277, 281 (D.N.J.2001) (quoting Doe v. Nat'l Bd. of Med. Exam'rs, 199 F.3d 146, 154 (3d Cir.1999)). As we conclude that the District Court committed legal error in the analysis leading to its determination that Dam Things had a reasonable probability of success on the merits, we will limit our discussion to this first prong, and therefore we will examine the merits of Dam Things' claim under the statute and the District Court's treatment of it. This requires a three-step inquiry: first, does Dam Things hold a restored copyright, second, did Russ infringe Dam Things' copyright, and, third, is Russ protected by the 104A safe harbor for creators of derivative works?
Eligibility for Restoration
As set forth above, 17 U.S.C. § 104A provides essentially four requirements for restoration of a foreign work's copyright that are relevant here. First, the copyright has not expired in its source country. Second, it is in the public domain in the United States because of failure to comply
While Dam Things claims that the troll for which it seeks restoration was first published in Denmark, Russ contends that it was actually first published in the United States. Underlying this argument is the preliminary question in this case — which troll is at issue here? Dam Things has presented one troll to the Copyright Office, to the District Court, and to us as the troll whose copyright has been restored — Plaintiff's Exhibit 1 ("P1").
Russ, on the other hand, focuses its attention on what it terms "the 1961" or "Public Domain Troll." This is the troll that was the subject of Dam Things' 1961 design patent. Dam Things has referred to this at various times as a girl-like version of P1 and has also applied for a new registration for this troll in 2000 as being an "adaptation of previously published boy doll." Dam Things has not agreed that this troll was first published in 1961, and, in fact, on its 2000 copyright application it claimed it was first published in 1958. The girl-like troll that was the subject of the design patent was presented to the District Court and us as Plaintiff's Exhibit 4 ("P4"). This troll doll appears much like the first — it has four fingers on each hand and four toes on each foot, a large smile, broad nose, and large round eyes. It also stands erect with its arms outstretched, and it has a short, pudgy figure.
Russ does not contest before us the fact that P1 was first published in Denmark. Instead, it argues that P4 is the relevant troll because it is really the troll that Dam
As the other trolls that were created after P1 are not identical works and were first used admittedly at different times and even in different locations than P1, our holding as to the restoration of P1 does not control as to restoration of any other specific troll. That is not to say that the copyright restored in P1 might not provide protection for the other works based upon the appropriate originality analysis. Understandably, and appropriately, on remand the District Court will have to determine the extent of the protection provided to other Dam Things works to the extent that Russ argues that its trolls are merely derivative or even copies of Dam Things works other than P1.
Our holding today as to restoration is therefore limited to P1, and our discussion of Appellant's arguments will be limited accordingly. All that we need to decide is whether, as Dam Things urges, the copyright in P1 was restored. Therefore the place where P1 was first published is what matters.
2. Russ's Contentions
a. Judicial Estoppel
Russ argues that Dam Things should be estopped from contending now that its trolls were not first published in the United States because it previously represented to the United States Patent Office and to the court during the Scandia litigation that P4, the troll for which it was seeking design patent protection, was first published in the United States. Russ specifically points to two statements made by Thomas Dam. First, in his patent application filed on September 1, 1960, Dam represented that he did "not believe that this design [P4] was ever known or used before [his] invention thereof or patented or described in any printed publication in any country before [his] invention thereof, or more
We have held that judicial estoppel
As discussed above, our restoration analysis is limited to P1. Here the threshold requirement of inconsistency is not satisfied because the representations made regarding P4's qualification for a design patent do not pertain to P1, and, therefore, are not inconsistent with representations regarding P1's date and place of publication. Russ points to statements in the patent application and in Thomas Dam's later affidavit that specifically address the requirements for patent protection: that the design be "unobvious," 35 U.S.C. § 103(a), and that the subject of the patent has not been "described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application." 35 U.S.C. § 102. Both of these representations were made with respect to P4, however, and therefore wholly unrelated to the issue before us. Dam made no representations regarding P1, let alone regarding its date or place of first publication. Therefore, Dam Things' position here that P1 was first published in Denmark in 1958 is not "irreconcilably inconsistent" with its position before the Patent Office that P4 was not previously published outside the United States more than a year prior to the date of publication — September 1960.
Furthermore, we have previously explained that judicial estoppel is appropriately applied in a narrow category of cases because it "is an extraordinary remedy that should be employed only when a party's inconsistent behavior would otherwise
Russ also contends that Dam Things abandoned its copyright in P1. It points specifically to Dam Things' publication of many trolls in the United States in the 1960s without proper notice, the fact that it did not appeal the Scandia decision, and its admission to Scandia that the trolls were in the public domain, as acts constituting abandonment. "Abandonment occurs only if there is an intent by the copyright proprietor to surrender rights in his work." 4 Nimmer § 13.06. While there is a split of authority as to whether an overt act is necessary to establish abandonment, it is undisputed there must be either an act, or a failure to act, from which we can readily infer an intent to abandon the right. See id. (setting forth the conflicting authorities). We agree with the District Court that the acts relied upon by Russ are insufficient to establish that Dam Things intended to abandon its United States copyright. In doing so, we do not suggest that, as Dam Things proposes, abandonment may never be a bar to restoration pursuant to 17 U.S.C. § 104A.
The District Court concluded "that [Dam Things] can prove all of the requisite elements of § 104A and is therefore likely to succeed on the merits of its restoration claim." Dam Things from Denmark v. Russ Berrie & Co., 173 F.Supp.2d 277, 286-87 (D.N.J.2001). We agree with this aspect of the District Court's ruling, as it appears that Dam Things will be able to establish that P1 satisfies all four requirements for restoration, including first publication in an eligible country.
Upon determining that the restoration of the Dam Things copyright was likely, the District Court focused on the merits of Dam Things' claim — the likelihood of success on the copyright infringement claim. The District Court's reasoning was as follows:
Russ argues that it has modified Dam's designs by changing the size of the heads, changing the facial expressions, and changing the shape and size of the dolls' bodies, and that these changes are sufficient to constitute original designs. Def. Surreply Br. at 18. Simply because one troll's nose is larger or one's ears are slightly more pointed, or that a troll's mouth is opened or closed, in this Court's view, does not make these designs sufficiently distinct so as to be afforded independent copyright protection....
In further defense of its trolls, Russ maintains that only minimal or slight creativity need be demonstrated in order for a work to be original. See Feist Publications, Inc., 499 U.S. 340, 111 S.Ct. 1282, 113 L.Ed.2d 358. But as Defendant also points out, "something more than a `merely trivial variation,' something recognizably `his own'" is necessary for a showing of originality. Alfred Bell & Co. v. Catalda Fine Arts, 191 F.2d 99 (2d Cir.1951). Here, the Court believes that Russ's trolls contain only trivial variations from Dam's original troll, and therefore are not sufficiently original....
As the foregoing analysis makes clear, this Court is convinced that all of the dolls in this case involve one basic troll design; Thomas Dam created this design in 1957 and 1958 in Gjol, Denmark. His company owns the rights to it, and it is entitled to copyright protection for the original design.
Dam Things from Denmark, 173 F.Supp.2d at 288-90 (D.N.J.2001) (footnotes omitted).
We believe that the District Court's analysis was too conclusory, given the complex issues of infringement and originality before it, and particularly in light of the unique challenges presented by § 104A. We are specifically concerned with the District Court's incomplete consideration of Russ's contention that its trolls would qualify as derivative works. As the United States Courts of Appeals have yet to provide any guidance as to the application of § 104A, and, additionally, as courts often confuse and even conflate the issues of infringement and originality, we will set forth the proper standards and analysis that needs to be conducted by a district court faced with an issue of whether a § 104A reliance party's work infringes and should be barred, or is a derivative work entitled to licensing.
In cases where copyright infringement is at issue, the Court should first consider whether there has been infringement by comparing each of the allegedly infringing works against the restored work.
Following the Second Circuit's lead in Arnstein v. Porter, 154 F.2d 464, 468-69 (2d Cir.1946), we have further subdivided the test for substantial similarity into two considerations. See Whelan Assocs., 797 F.2d at 1232 (noting our adoption of the Arnstein bifurcated substantial similarity test); see also Sid & Marty Krofft Television Prods., Inc. v. McDonald's Corp., 562 F.2d 1157, 1164-65 (9th Cir.1977) (describing the two considerations as "extrinsic" and "intrinsic"). First, the opinions of experts may be called upon in determining whether there is sufficient similarity between the works so as to conclude that the alleged infringer "copied" the work. Whelan Assocs., 797 F.2d at 1232. Second, the fact-finder is to determine whether a "lay-observer" would believe that the copying was of protectible aspects of the copyrighted work. Id. One court has described this test as being whether "the ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them, and regard their aesthetic appeal as the same." Folio Impressions, Inc. v. Byer California, 937 F.2d 759, 765 (2d Cir.1991), quoted in Boisson v. Banian, Ltd., 273 F.3d 262, 272 (2d Cir.2001).
The Court of Appeals for the Second Circuit has termed these two considerations as "actual copying" which focuses on access in conjunction with "probative" similarity,
2. Derivative Works
In light of the special provisions in § 104A, once a court has found infringement, it must consider whether the safe harbor provision is implicated, namely, whether the infringing works are derivatives of the restored work.
In considering the originality required to qualify for copyright protection as a derivative work, the Supreme Court has explained: "To qualify for copyright protection, a work must be original to the author. Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity." Feist Publ'ns, Inc., 499 U.S. at 345, 111 S.Ct. 1282 (emphasis added) (citations omitted). The Court went on to explain: "To be sure, the requisite level of creativity is extremely low; even a slight amount will suffice." Id. The Court of Appeals for the Second Circuit has explained: "We do follow the school of cases in this circuit and elsewhere supporting the proposition that to support a copyright there must be at least some substantial variation, not merely a trivial variation such as might occur in the translation to a different medium." L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486, 491 (2d Cir.1976) (en banc). In Batlin, the Second Circuit considered whether a plastic Uncle Sam bank based on a cast iron original contained sufficient originality to satisfy the requirements for derivative works.
We have similarly applied the originality test set forth in Feist that a work "must possess `at least some minimal degree of creativity.'" Southco, Inc. v. Kanebridge Corp., 258 F.3d 148, 150 (3d Cir. 2001) (quoting Feist Publ'ns, Inc., 499 U.S. at 345, 111 S.Ct. 1282). In Southco, we went on to explain: "Although the Court has noted that this is not a `stringent' standard, it has also held that there is `a narrow category of works in which the creative spark is utterly lacking or so trivial as to be virtually nonexistent.'" Id. at 151. (quoting Feist Publ'ns, Inc., 499 U.S. at 358-59, 111 S.Ct. 1282). When considering originality, therefore, the court must determine whether the author's creativity is enough to overcome a charge of triviality.
3. District Court's Analysis
These descriptions of the tests for copyright infringement and for derivative works illustrate the complex task that a court faces in addressing these issues. In this case, the District Court did assess the similarity between the trolls, and Russ does not challenge the Court's determination that the Russ trolls infringe Dam Things' restored copyright in P1. We therefore focus our discussion on the derivative works analysis. Unfortunately, it is not clear whether the Court actually addressed the derivative works issue which requires a determination as to originality, but, if so, it did not apply the proper standards for originality; instead, it conflated them with the requirements for infringement, which involve findings regarding similarity. Furthermore, the District Court did not properly compare the relevant trolls.
Dam Things claims that the District Court did consider the issue of originality, because it used the magic derivative works language: "Here, the Court believes that
The distinction between the tests for infringement and for originality may be nuanced, but it does exist and must be carefully considered by the court. The Court of Appeals for the Second Circuit explained:
Eden Toys, 697 F.2d at 34.
The District Court should have compared the relevant trolls against one another to determine whether the various Russ trolls are derivatives of P1. Without detailed consideration of the Russ trolls as against P1, the District Court determined that all of the Russ trolls and all of the Dam Things trolls are too similar to be distinguishable. It explained: "A finder of fact who compares Russ's trolls with Dam's could not reasonably conclude that the [sic] Russ's trolls are original designs or that they comprise original expression of the idea of a troll." Dam Things from Denmark v. Russ Berrie & Co., 173 F.Supp.2d 277, 288-89 (D.N.J.2001). This blanket treatment relating to the trolls fell short of what is required. As we saw firsthand, these trolls come in all shapes and sizes — small pencil-toppers, and nine inch "giants," as well as grandparents, teenagers, and babies. Perhaps in the abstract one can believe that "a troll is a troll," but it is clear that all trolls cannot simply be judged alike, particularly when the inquiry must focus on distinct aspects of each. It is certainly possible that some of the Russ trolls could be considered to be derivative works while others would not. This exacting comparison needs to be made.
On remand, the District Court must re-examine Dam Things' "likelihood of success on the merits." While a party need not prove that its success is certain, and is not expected to submit all of its proof, it is essential that the District Court consider the evidence before it according to the proper legal standards. Therefore, on remand, the District Court should look at the infringing Russ trolls and individually compare each one to P1 to determine whether it constitutes a derivative work of the Dam Things troll.
As the District Court conducted an incomplete legal analysis of the likelihood of Dam Things' success on the merits in this case, we will vacate the District Court's preliminary injunction order and remand this case for further consideration consistent with this opinion.