Dam Things of Denmark a/k/a Troll Company Aps v. Russ Berrie & Company, Inc.

We consider this case on an expedited appeal from the

United States District Court for the District of New Jersey.

The parties to this appeal, Dam Things from Denmark,

a/k/a Troll Company ApS (together "Dam Things"), and

Russ Berrie and Company, Inc. ("Russ"), are purveyors of

trolls -- short, pudgy, plastic dolls with big grins and wild

hair. Dam Things, a Danish company, asserts that its

copyright in its original troll design, the "Basic Good Luck
Troll," has been restored pursuant to 17 U.S.C.S 104A.

Section 104A is a highly unusual provision which has

restored copyright protection in a vast number of foreign

works previously in the public domain. Dam Things

brought this action against Russ alleging infringement of its

restored copyright.1 If restoration is proper under the

statute, the key remaining issues are whether there is

infringement, and if so, whether the infringing works will be

totally prohibited or will be entitled to mandatory licenses

under S 104A's safe harbor for derivative works.

Upon application by Dam Things, the District Court

granted a preliminary injunction forbidding Russ from

selling any trolls after February 13, 2002.2 In its opinion

and order, the District Court explained that the preliminary

injunction was warranted because in all likelihood Dam

Things could establish that the copyright in the"Good Luck

Troll designs" was restored under S 104A and that Dam
Things could also prove that Russ infringed its restored

copyright.

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 S 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 S 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.

* * *

Click the case caption above for the full text of the Court's opinion.

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. 28 Costs

on appeal are to be borne equally by the parties.

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