Dam Things from Denmark v Russ Berrie & Co., 051402 FED3, 01-4422
|Party Name:||Dam Things from Denmark v Russ Berrie & Co.|
|Case Date:||March 07, 2002|
|Court:||United States Courts of Appeals, Court of Appeals for the Third Circuit|
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
Trent S. Dickey, Esq. James M. Hirschhorn, Esq. [argued] Sills, Cummis, Radin, Tischman, Epstein & Gross One Riverfront Plaza Newark, NJ 07102, for Appellant.
Robert L. Sherman, Esq. [argued] Paul, Hastings, Janofsky & Walker 75 East 55th Street New York, NY 10022, for Appellee.
Before: Becker, Chief Judge, Alito, and Rendell, Circuit Judges
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 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.(FN1) 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.(FN2) 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.
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, 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 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.
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(FN3) 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 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 fifteen(FN4) 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.
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(FN5) 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,(FN6) 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 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,"...
To continue readingFREE SIGN UP