Dam Things From Denmark, a/k/a TROLL COMPANY ApS v. Russ Berrie & Company, Inc

PRECEDENTIAL
Filed May 14, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 01-4422
DAM THINGS FROM DENMARK,
a/k/a TROLL COMPANY ApS
v.
RUSS BERRIE & COMPANY, INC.,
Appellant
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil No. 01-cv-04008)
District Judge: Honorable Nicholas H. Politan
Argued March 7, 2002
Before: BECKER, Chief Judge, ALITO,
and RENDELL, Circuit Judges
(Filed May 14, 2002)
Trent S. Dickey, Esq.
James M. Hirschhorn, Esq.
[ARGUED]
Sills, Cummis, Radin, Tischman,
Epstein & Gross
One Riverfront Plaza
Newark, NJ 07102
Counsel for Appellant
Robert L. Sherman, Esq. [ARGUED]
Paul, Hastings, Janofsky
& Walker
75 East 55th Street
New York, NY 10022
Counsel for Appellee
OPINION OF THE COURT
RENDELL, Circuit Judge.
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

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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
_________________________________________________________________
1. Dam Things’ complaint sets forth five other claims for relief which are
not implicated in this appeal.
2. By agreement of the parties, and in light of this pending appeal, this
date was extended to March 29, 2002.
2
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.
We note that the District Court’s somewhat conclusory
treatment of the issues, and trolls, may have been due to

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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, was based on its
determination that the copyright in the 1957/1958
"Original Good Luck Troll," P1, qualified for restoration.
Furthermore, on appeal Dam Things has clearly stated that
3
P1 is the only troll in which it seeks restoration. We note at
the outset, therefore, that we will limit our analysis to the
arguments pertaining to the restoration of P1.
I.
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
Things3 filed applications for U.S. copyright registration of
both the boy-like and girl-like trolls in 1964 and then again
in 1965 after its initial applications were rejected for
improperly designating the copyright holder as Denmark.
Dam Things has held and continues to hold a valid Danish
copyright in the trolls. Dam Things from Denmark v. Russ
_________________________________________________________________
3. According to an affidavit of Neils Dam, Thomas Dam’s son, his father
established Dam Things Establishment in 1962 and assigned all of his
copyrights to the company. Dam Things Establishment was later
succeeded by Thomas Dam Design and Copyrights AG. Finally, in 1993,

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that company was merged into Troll Company ApS.
4
Berrie & Co., 173 F. Supp. 2d 277, 284 (D.N.J. 2001). In
1965, the District Court for the District of Columbia held
that the Dam Things’ trolls submitted for patent and
copyright protection were in the public domain, because
they were published in the United States with improper
notice -- they were marked with "Denmark" and the date or
with just the date, instead of with the company’s name and
date -- or with no notice at all. Scandia House Enters., Inc.
v. Dam Things Establishment, 243 F. Supp. 450, 453-54
(D.D.C. 1965) [hereinafter Scandia].
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 trolls. In the 1990s, Russ obtained fifteen4
copyright registrations for trolls -- registered as derivative
works of the photographs of the Dam Things trolls in the
Russ catalogs.
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. S 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.
_________________________________________________________________
4. One additional copyright was obtained by Russ subsidiary Bright of
America, Inc.
5
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.

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This protection results from the United States’ promise,
in the context of the TRIPs5 annex to the Agreement
Establishing the World Trade Organization ("WTO"), to
adhere to the Berne Convention, which the United States
had entered in 1989. 3 Melville B. Nimmer & David
Nimmer, Nimmer on Copyright S 9A.04 (2001) [hereinafter
Nimmer]. In order to comply with the Berne Convention’s
"Rule of Retroactivity" contained in Article 18,6 Congress
enacted the Uruguay Round Agreements Act. Id. The Act
supplanted a previous version of S 104A (enacted only one
year earlier in an effort to comply with the North American
Free Trade Agreement ("NAFTA")), and provided for broad
restoration of foreign works. Id. Section 104A of the
Copyright Act now provides for automatic restoration of
copyright, as of January 1, 1996, for "an original work of
authorship" which meets the following requirements:
(A) is protected under subsection (a) [which provides
_________________________________________________________________
5. The United States Trade Representative has described the Agreement
on Trade-Related Aspects of Intellectual Property Rights ("TRIPs") as
"establish[ing] comprehensive standards for the protection of intellectual
property and the enforcement of intellectual property rights in WTO
member countries. It requires each WTO member country to apply the
substantive obligations of the world’s most important intellectual
property conventions, supplement those conventions with substantial
additional protection, and ensures that critical enforcement procedures
will be available in each member country to safeguard intellectual
property rights." Office of the United States Trade Representative, The
Uruguay Round Agreements Act Statement of Administrative Action:
Agreement on Trade-Related Aspects of Intellectual Property Rights (1994)
[hereinafter USTR Statement].
6. Article 18 of the Berne Convention provides:"This Convention shall
apply to all works which, at the moment of its coming into force, have
not yet fallen into the public domain in the country of origin through the
expiry of the term of protection." Berne Convention for the Protection of
Literary and Artistic Works (Paris Text 1971), 1161 U.N.T.S. 3.
6
for a term of protection equal to what the work would
have received "if the work had never entered the public
domain in the United States," and excepts certain
works which were "ever owned or administered by the
Alien Property Custodian"];
(B) is not in the public domain in its source country
through expiration of term of protection;
(C) is in the public domain in the United States due to
--
(i) noncompliance with formalities imposed at any
time by United States copyright law, including failure
of renewal, lack of proper notice, or failure to comply
with any manufacturing requirements;

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(ii) lack of subject matter protection in the case of
sound recordings fixed before February 15, 1972; or
(iii) lack of national eligibility; and
(D) has at least one author or rightholder who was, at
the time the work was created, a national or
domiciliary of an eligible country, and if published, was
first published in an eligible country and not published
in the United States during the 30-day period following
publication in such eligible country.
17 U.S.C. S 104A(h)(6)(A)-(D).
Dam Things claims that its copyright in its original troll
qualifies for automatic restoration in accordance with
S 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. S 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. S 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
7
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. S 104A(h)(4)(A).7
Parties who were in fact copying the restored work are given
one year to sell the now infringing works after being given
a "notice of intent to enforce" ("NIE") by the author of the
restored work. 17 U.S.C. S 104A(d)(2). But, the statute also
provides a safe harbor in the form of a mandatory license
for authors of "derivative works"; they are allowed to
continue manufacturing and selling their work, but must
pay the author of the restored work reasonable
compensation. 17 U.S.C. S 104A(d)(3).8
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 parties filed a series of declarations as well as
briefs in support of their respective positions. The District
Court concluded that Dam Things had "demonstrated a
likelihood of success on its copyright infringement claim"9
and on December 20, 2001 it entered a Second Amended
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7. During oral arguments, Dam Things asserted that Russ would not be
protected by the provisions for reliance parties because of the lack of
sales by Russ during relevant time periods. As this issue was not
properly raised by Dam Things in its briefs and appears not to have been
raised before the District Court, we will not address it here.
8. In its report on the Copyright Technical Amendments Act, the House
of Representatives expressed its reason for providing a special provision
in S 104A for derivative works: "In enacting section 104A, Congress
considered the fact that restoring copyright in works that are currently
in the public domain creates a potential problem: people may have used
these works as the basis for new derivative works, such as motion
pictures made from novels. At the time the new derivative work was
created, the use of the underlying work was completely lawful, since it
was in the public domain. Once copyright in the underlying work is
restored, however, the continued use of the derivative work without the
consent of the owner of the copyright in the underlying work would
constitute copyright infringement." H.R. Rep. No. 105-25, at 12 (1997).
9. The District Court did not consider Dam Things’ other claims for relief.
8
Order granting Dam Things a preliminary injunction and
detailing its terms. Part of this order instructs that Russ
will be entirely prohibited from selling its troll dolls as of
February 13, 2002 -- one year after the date of the NIE.10
The Court also ordered Dam Things to pay a cash or surety
bond in the amount of $100,000. The case comes before us
on an expedited appeal.
II.
As Dam Things brought this action to enforce an alleged
copyright, the District Court exercised jurisdiction pursuant
to 28 U.S.C. S 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. S 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.,

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173 F. Supp. 2d 277, 281 (D.N.J. 2001) (quoting Doe v.
_________________________________________________________________
10. There is some controversy over the date of the NIE, as Dam Things
claims to have first sent an NIE to Russ in 1996. However, Russ admits
that on February 13, 2001 it received a duplicate NIE sent by Dam
Things. The District Court therefore adopted this as the relevant date for
the purpose of the injunction.
9
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?
A. Eligibility for Restoration
1. Background
As set forth above, 17 U.S.C. S 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
with formalities. Third, the author of the work was a
national or domiciliary of an eligible country. Fourth, the
work was first published in an eligible country not less
than thirty days prior to being published in the United
States. The first two requirements regarding the continued
existence of foreign copyright protection and the reason for
the work’s presence in the public domain were challenged
by Russ before the District Court. However, we believe that
they were properly disposed of in the Court’s opinion. As to
the third requirement, Russ has not challenged the fact
that Thomas Dam is a national of an eligible country. We
will therefore limit our discussion, as the parties did their
arguments before us, to the place of first publication.
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").11 Dam Things
_________________________________________________________________
11. The District Court refers to this as the"1957 Troll"; however, we do
not find this label very helpful, and will instead simply refer to this troll
as P1.

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10
represents this doll as "an original Good Luck troll." It was
reportedly manufactured in 1959, confirmed by the fact
that it is made of rubber and later dolls were made of PVC.
Further, it is shown in a September, 1959 magazine being
held by Thomas Dam’s daughter. The doll was presented to
us in a box to protect it, as the rubber doll stuffed with
sawdust has become very fragile with age. The short and
stout troll appears to have had four fingers and four toes
which have been broken with age and are now protected by
stockings. It has a cheery smile on its face, a broad nose,
large brown circular eyes, large pointy ears, and a mass of
shaggy, dark hair. The doll stands erect with its short arms
pointing out to the sides. Although not required by statute,
Dam Things applied for restoration of the copyright in this
troll doll on March 9, 2000.
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.12 The one difference which
has been pointed to and was relied on by the Copyright
Office in considering P4 as a derivative work for copyright
registration purposes was its rounded ears in contrast to
the pointy ears of P1.
Russ does not contest before us the fact that P1 was first
published in Denmark. Instead, it argues that P4 is the
_________________________________________________________________
12. Photographs of these early Dam Things trolls-- a boy and a girl --
appeared in Danish magazines Familie Journal and Femina in 1960
along with the story of their success.
11
relevant troll because it is really the troll that Dam Things
contends Russ infringed. Dam Things, on the other hand,
suggests that P4 is not a distinct work from P1 and
therefore if one of them is infringed then the other is as
well. Neither party argues that all of Dam Things’ trolls are
identical in appearance, and both seem to concede that
restoration of a copyright in a troll must of necessity be
linked to a specific troll which was first used in its nation

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of origin other than the United States. While the standards
for judging infringement and derivative works are useful in
some copyright analyses, we are confronted with a creature
of statute and must decide in exactly what work the
copyright was restored. The parties seem to conflate the
statutory requirement for restoration, with Dam Things
seeking restoration of its "troll," and Russ seeking to deny
restoration in Dam Things’ "trolls." However, we cannot
properly consider this argument framed in this fashion
regarding the breadth of the copyright protection, given the
fact that the myriad trolls paraded before us by Dam
Things are not identical works, and the statute envisions
that one must be able to identify the first publication of a
tangible item, a "work," in a specific location. Here, Dam
Things made clear at oral argument that P1 was the only
specific item as to which restoration was sought. 13
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
_________________________________________________________________
13. During oral argument, Dam Things asserted:"[O]nly the plaintiff, has
the right to determine which is the restored work and which work gets
the restored copyright. Dam did that. Judge Politan found it. It is PX1.
So with all these other labels that have been given to the 1961 doll, the
‘64 troll, the later dolls, the girl/boy troll, it doesn’t matter. We’re here
saying under 17 U.S.C. 104A, the work that has been restored in PX1."
12
extent that Russ argues that its trolls are merely derivative
or even copies of Dam Things works other than P1. 14
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

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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 than one year prior to this application."
Second, in the course of the Scandia litigation, before the
issues were limited solely to the matter of copyright,
Thomas Dam reaffirmed the truth of this statement and
also explained that P4 was "vastly different artistically"
from P1.
We have held that judicial estoppel15 is appropriate only
_________________________________________________________________
14. We need not decide for the purpose of this opinion whether P4 is a
distinct work, a derivative work, or just a "copy" of P1.
15. Russ also contends that, in the alternative, we should apply
collateral estoppel. We have "required the presence of four factors before
collateral estoppel may be applied: (1) the identical issue was previously
adjudicated; (2) the issue was actually litigated; (3) the previous
determination was necessary to the decision; and (4) the party being
precluded from relitigating the issue was fully represented in the prior
action." Raytech Corp. v. White, 54 F.3d 187, 190 (3d Cir. 1995) (citing
United Indus. Workers v. Gov’t of the Virgin Islands , 987 F.2d 162, 169
(3d Cir. 1993)). The issue here -- P1’s country of first publication -- only
possibly satisfies the fourth factor. Clearly we would not apply collateral
estoppel in such a case.
13
where the following factors are met: "(1) the party to be
estopped is asserting a position that is irreconcilably
inconsistent with one he or she asserted in a prior
proceeding; (2) the party changed his or her position in bad
faith, i.e., in a culpable manner threatening to the court’s
authority or integrity; and (3) the use of judicial estoppel is
tailored to address the affront to the court’s authority or
integrity." Montrose Med. Group Participating Sav. Plan v.
Bulger, 243 F.3d 773, 777-78 (3d Cir. 2001).
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. S 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. S 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

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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 1960.16
_________________________________________________________________
16. Additionally, the assertions in Thomas Dam’s affidavit during the
Scandia litigation would not properly be the subject of judicial estoppel
because the statements were not adopted by the court in the course of
the litigation, and therefore bad faith is not evidenced. We have
explained "that a party has not displayed bad faith for judicial estoppel
purposes if the initial claim was never accepted or adopted by a court or
agency." Montrose Med. Group Participating Sav. Plan, 243 F.3d at 778
(citing Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795 (1999)).
Thomas Dam’s statement on the patent application could arguably
satisfy this requirement because the Patent Office accepted this date in
its decision to issue the design patent, and, furthermore, Dam profited
thereby. However, estoppel is still improper because Russ fails to
overcome the most basic requirement of inconsistency.
14
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 result in a miscarriage of justice." Montrose Med.
Group Participating Sav. Plan, 243 F.3d at 784 (internal
quotations omitted). We will not expand our application of
judicial estoppel to factual settings where the specific test
we have set forth is not satisfied.17
b. Abandonment
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 S 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. S 104A.
_________________________________________________________________
17. Russ also tries to use Thomas Dam’s prior statements to establish
that P4 is a distinct work from P1 and that it was P4, not P1, which was
thrust into the public domain in Scandia. Russ admits, however, that

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even if it was P4 and not P1 that was placed in the public domain via
the Scandia litigation, P1 still is properly the subject of restoration under
S 104A. As Russ itself explains: "The statute was intended not merely to
revive lapsed U.S. copyrights in foreign works, but to confer U.S.
copyright protection on eligible foreign copyrighted works even if those
works had not previously had a U.S. copyright." (citing USTR Statement
at 12; 3 Nimmer S 9A.04[A][1]). Therefore, this argument does not help
Russ defeat Dam Things’ claim to restore P1.
15
3. Conclusion
The District Court concluded "that [Dam Things] can
prove all of the requisite elements of S 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.
B. Copyright Infringement
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:
The Court has carefully examined the dueling trolls
at issue here, and is convinced that Plaintiff has made
a prima facie showing of infringement. A finder of fact
who compares Russ’s trolls with Dam’s could not
reasonably conclude that the Russ’s trolls [sic] are
original designs or that they comprise original
expression of the idea of a troll. In the present case, all
of the troll embodiments involved are very similar in
appearance. This Court believes that, for purposes of
copyright law, the designs are too similar to be given
individual copyright protection. Contrary to Defendant’s
contention, Plaintiff ’s [sic] do not claim a copyright on
the idea of a troll or a monopoly on trolldom. Nor are
they entitled to it. But Plaintiff is entitled to protect its
particular, original, identifiable expression of troll.
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
16

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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 S 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 S 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 S 104A reliance party’s
work infringes and should be barred, or is a derivative work
entitled to licensing.
1. Infringement
In cases where copyright infringement is at issue, the
17
Court should first consider whether there has been
infringement by comparing each of the allegedly infringing
works against the restored work.18 The test for copyright
infringement is well-established. There are two essential
elements: ownership of copyright, and copying by the
defendant. Whelan Assocs., Inc. v. Jaslow Dental Lab., Inc.,
797 F.2d 1222, 1231 (3d Cir. 1986). Copying is proven by
showing not only that the defendant had access to a
copyrighted work, but also that there are substantial
similarities between the two works. Id.; see also Ford Motor
Co. v. Summit Motor Prods., Inc., 930 F.2d 277, 291 (3d Cir.

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1991) (footnote omitted) ("[C]opying is demonstrated when
someone who has access to a copyrighted work uses
material substantially similar to the copyrighted work in a
manner which interferes with a right protected by 17 U.S.C.
S 106.").
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).
_________________________________________________________________
18. As discussed below, the District Court need not reconsider its
infringement analysis on remand because Russ has conceded that it
"performed what would have been an infringing act if the work had not
been in the public domain."
18
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,19 and
"actionable copying" which considers whether there is
"substantial" similarity between the alleged infringing work
and protectible elements of the original work.20 Boisson, 273
F.3d at 267; see also Sturdza v. United Arab Emirates, 281
F.3d 1287 (D.C. Cir. 2002) (dividing the test into the
consideration of whether the defendant actually copies and
whether it copied protectible aspects of the copyrighted
work). The test for actual copying can be established by
direct evidence or inferred by evidence of access and
"similarites that are probative of copying between the
works, and expert testimony." See Laureyssens , 964 F.2d
at 140, quoted in Boisson, 273 F.3d at 267. However, the
Supreme Court has explained that "[n]ot all copying . . . is
copyright infringement." Feist Publ’ns, Inc. v. Rural Tel.
Serv. Co., 499 U.S. 340, 361 (1991). The trial court
therefore must still consider whether the copying is
actionable, viewing the item through the lay person’s eyes,
focusing on whether the substantial similarities relate to
protectible material.21 Boisson, 273 F.3d at 268.
_________________________________________________________________

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19. In Laureyssens v. Idea Group, Inc., 964 F.2d 131 (2d Cir. 1992), the
Second Circuit adopted the term "probative similarity" in this first
portion of the test instead of "substantial similarity" because "[t]he
presence of a ‘substantial similarity’ requirement in both prongs of the
analysis -- actual copying and whether the copying constitutes an
improper appropriation -- creates the potential for unnecessary
confusion, especially because a plaintiff need not prove substantial
similarity in every case in order to prove actual copying." Id. at 140.
20. As Nimmer has explained in his treatise on copyright: "It bears
repeating, moreover, that the inquiry in this section is into improper
appropriation, i.e., actionable copying as a legal proposition. Although
the term ‘substantial similarity’ often is invoked as a proxy to prove
copying as a factual proposition, we have seen that the term ‘probative
similarity’ is to be preferred in that context and the question of
‘substantial similarity’ arises analytically only thereafter." 4 Nimmer
S 13.03[A].
21. A This test makes clear that "it is only after actual copying is
established that one claiming infringement then proceeds to demonstrate
that the copying was improper or unlawful by showing that the second
work bears ‘substantial similarity’ to protected expression in the earlier
work." Castle Rock Entm’t, Inc. v. Carol Publ’g Group, Inc., 150 F.3d 132,
137 (2d Cir. 1998).
19
2. Derivative Works
In light of the special provisions in S 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.22 Just
as with all other works, "originality is a constitutionally
mandated prerequisite for copyright protection" for
derivative works. Feist Publ’ns, Inc., 499 U.S. at 351; see
also U.S. Const. art. I, S 8. However, all aspects of a work
need not be original with the author. An author’s work can
utilize expression from an already existing work created by
another author, or even that same author. A new work that
utilizes expression from a previously existing work is
considered to be derivative of that work. The Copyright Act
defines a derivative work as "based upon one or more
preexisting works, such as a translation, musical
arrangement, dramatization, fictionalization, motion picture
version, sound recording, art reproduction, abridgment,
condensation, or any other form in which a work may be
recast, transformed, or adapted." 17 U.S.C. S 101. An
author’s right to protection of the derivative work only
extends to the elements that he has added to the work; he
cannot receive protection for the underlying work.
Furthermore, if the underlying work is itself protected by
copyright, then he will receive no protection at all; on the
contrary, he is a copyright infringer, because in order to
create his work he has copied the underlying work.
However, section 104A obviously creates an exception to
this rule and even though the foreign author has a restored
copyright, the creator of the derivative work is given special

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dispensation and is not considered an infringer, and is
instead treated as a licensee. 17 U.S.C. S 104A(d)(3).
In considering the originality required to qualify for
copyright protection as a derivative work, the Supreme
_________________________________________________________________
22. If, on the other hand, there was no infringement, Russ would
succeed in this case and our analysis would be over. As Nimmer
explains: "a work will be considered a derivative work only if it would be
considered an infringing work if the material that it has derived from a
pre-existing work had been taken without the consent of a copyright
proprietor of such pre-existing work." 1 Nimmer S 3.01.
20
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 (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. Id. The court
concluded that differences as to the shape of the satchel,
the leaves in the eagle’s talons, and other such alterations
were too minor to support a claim for originality. Id. at 489.
By contrast, in litigation over the alleged copying of
Paddington Bear, the Second Circuit found sufficient
variations to constitute originality in the drawing of the
bear where changes included: "the changed proportions of
the hat, the elimination of individualized fingers and toes,
the overall smoothing of lines -- combine to give the . . .
drawing a different, cleaner ‘look.’ " Eden Toys, Inc. v.
Florelee Undergarment Co., 697 F.2d 27, 35 (2d Cir. 1982).
The court there explained that while the alterations to the
new drawing were "too minor to entitle the [new] work to
claim a different aesthetic appeal, [they] are still original
and substantial enough to deserve independent copyright
protection." Id. at 34-35. The Court of Appeals for the
Seventh Circuit has contended that Batlin presented a
change by the Second Circuit to a "less liberal" test
requiring that a derivative work be "substantially different
from the underlying work [in order] to be copyrightable."
Gracen v. Bradford Exch., 698 F.2d 300, 305 (7th Cir. 1983).23
_________________________________________________________________
23. In Gracen, the Seventh Circuit found insufficient originality in a

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painting portraying Dorothy from the film version of the Wizard of Oz
because it was not "substantially different from the underlying work."
698 F.2d at 304.
21
The Second Circuit’s analysis appears unchanged, however,
as that court has reconfirmed its approach in Batlin: "The
law requires more than a modicum of originality. This has
been interpreted to require a distinguishable variation that
is more than merely trivial." Waldman Publ’g Corp. v.
Landoll, Inc., 43 F.3d 775, 782 (2d Cir. 1994) (citing L.
Batlin & Son, Inc., 536 F.2d at 490).
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). 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). 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 Russ’s trolls
contain only trivial variations from Dam’s original troll, and
22
therefore are not sufficiently original." Dam Things from
Denmark, 173 F. Supp. 2d at 288-89 (emphasis added).
But, then, in the next paragraph when comparing the Dam
Things trolls to one of the Russ trolls, the District Court
reverted to a broader statement: "[T]hey are substantially

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similar in appearance, and a casual observer would be
unable to differentiate the maker of these troll dolls." Id. at
290. The Court seems to have completely intertwined the
two tests to a point where it is impossible to determine
where one analysis begins and the other ends, if in fact
there are two analyses. It is important to remember that by
definition, derivative works are substantially similar to the
original work, because "[a] work is not derivative unless it
has been substantially copied from a prior work." 1 Nimmer
S 3.01. The test for minimal creativity is therefore
necessarily separate and apart from the test for substantial
similarity. We cannot conclude that the District Court
conducted a derivative works analysis, apart from a
similarity analysis, because although the Court used the
"trivial variations" language that is used to distinguish
works as derivative, it never once employed the word
"derivative" or noted that a second test needs to be applied.24
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:
The difference between these two tests is not merely
academic. A work which makes non-trivial
contributions to an existing one may be copyrighted as
_________________________________________________________________
24. In its consideration of restoration, the District Court briefly
mentioned the reliance party issue, but seemed to misunderstand the
possible implications of such status, particularly regarding whether the
reliance party is a copier or a creator of an original work. The District
Court explained: "Because Dam’s Good Luck trolls were in the public
domain when Russ ‘created’ its trolls, Russ indeed may have been a
reliance party. The Court, however, makes no final determination on this
issue today, but assumes for purposes of this motion that Russ qualifies
as a reliance party." Dam Things From Denmark , 173 F. Supp. 2d at 285
n.9. This is further evidence that the court entirely overlooked the
copy/derivative work distinction that is so vital to its ultimate
determination.
23
a derivative work and yet, because it retains the‘same
aesthetic appeal’ as the original work, render the
holder liable for infringement of the original copyright
if the derivative work were to be published without
permission from the owner of the original copyright.
Eden Toys, 697 F.2d at 34.25 The fact that the two
companies’ dolls have the "same aesthetic appeal" or "are
very similar in appearance" does not rule out the
applicability of the safe harbor for derivative works.26
The District Court’s analysis was also deficient in that it
conducted a generalized comparison of the Dam Things
trolls and the Russ trolls. In order to determine whether
one work is a derivative of another, the trial judge must
actually compare the exact works at issue. In this case

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Dam Things presented its trolls to the District Court on one
occasion and Russ presented its trolls on a separate
occasion. The trolls themselves were never placed into
evidence. As a result, the Court never had the opportunity
to compare the physical trolls of both Russ and Dam
Things side-by-side. While each side places the blame for
this evidentiary lapse on the other party, the placement of
the blame is irrelevant. Furthermore, we will not state that
as a matter of law it is insufficient for the judge to consider
photos of the trolls instead of the trolls themselves.
However, having ourselves been faced with a legion of trolls
on counsels’ tables during oral arguments, we know for a
_________________________________________________________________
25. Nimmer also provides a helpful explanation:"The standards for
originality and for substantial similarity should not be confused. While
a mere ‘distinguishable variation’ will constitute a sufficient quantum of
originality so as to support a copyright in such variation, that same
‘distinguishable variation’ in one work may not sufficiently alter its
substantial similarity to another so as to negative infringement." 4
Nimmer S 13.03[A].
26. At one point during its generalized comparison of the trolls, the
District Court observed: "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." Dam
Things from Denmark, 173 F. Supp. 2d at 289. Such comparisons of the
trolls would be proper, but must be undertaken using the standard of
more than mere trivial variations.
24
fact that the photographs are no substitute for the real
thing in this case.
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.

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On remand, the District Court must reexamine 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.27
III.
As the District Court conducted an incomplete legal
_________________________________________________________________
27. In the interest of efficiency, we suggest that the District Court
consider consolidating its Rule 65 injunction hearing with its merits
hearing on remand.
25
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.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
_________________________________________________________________
28. As the preliminary injunction is being vacated, we need not reach
Russ’s challenge to the amount of the injunction bond ordered by the
District Court.
26

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