## Facts

- Dam Things, a Danish company founded by Thomas Dam, created the “Basic Good Luck Troll,” a short, pudgy plastic doll with a grin and wild hair.
- In prior U.S. litigation, a federal court held the troll had entered the U.S. public domain because it was published in the United States without proper copyright notice under then-existing law.
- Russ Berrie, a U.S. company, later manufactured and sold troll dolls and related products similar to Dam Things’ design.
- During the 1990s, Russ obtained multiple U.S. copyright registrations for its troll designs as “derivative works” based on public-domain material.
- In 1994, the Uruguay Round Agreements Act added 17 U.S.C. § 104A, which automatically restores U.S. copyrights for certain foreign works that had fallen into the U.S. public domain due to noncompliance with U.S. formalities.
- Dam Things claimed the § 104A restoration applied to its original troll design and sued Russ for infringement, seeking to stop Russ’s sales.
- Russ argued (1) the work was not eligible for restoration or had been abandoned and (2) even if restored, Russ’s designs qualified for § 104A’s preexisting derivative-works protections, limiting Dam Things’ remedies to a compulsory license/royalties rather than a complete ban.

## Issues

1. Whether Dam Things was likely to establish that its troll design qualified for copyright restoration under 17 U.S.C. § 104A and that the rights had not been abandoned.
2. Whether Russ’s troll designs qualified as preexisting derivative works by a reliance party under § 104A(d)(3), limiting remedies available to Dam Things.
3. Whether the district court properly applied preliminary-injunction standards by adequately analyzing the derivative-works safe harbor on a design-by-design basis.

## Decision

- The Third Circuit agreed Dam Things was likely to prove the troll design qualified for § 104A restoration because it was a foreign work that entered the U.S. public domain due to failure to satisfy U.S. formalities.
- The court agreed Dam Things was likely to show no abandonment because abandonment requires an affirmative manifestation of intent to surrender rights, not merely failure to comply with formalities or failure to prevail in earlier litigation.
- The court held the district court’s preliminary-injunction analysis was inadequate because it did not conduct a design-specific inquiry into whether any Russ products were qualifying derivative works within § 104A(d)(3).
- The court vacated the preliminary injunction in part and remanded for a product-by-product evaluation of derivative-work status and the applicability of the statutory safe harbor, which could require a compulsory license rather than an outright prohibition for qualifying items.

## Legal Principles

- 17 U.S.C. § 104A restores U.S. copyright protection to certain foreign works that entered the U.S. public domain for reasons such as failure to comply with U.S. notice and other formalities.
- Abandonment of copyright requires an affirmative intent to relinquish rights; nonenforcement or prior loss of protection due to formalities does not alone prove abandonment.
- The § 104A(d)(3) reliance-party safe harbor for preexisting derivative works can restrict remedies for infringement of the restored work, including substituting a compulsory license/royalty framework for injunctive exclusion as to qualifying derivatives.
- Courts must separate (1) infringement/substantial similarity from (2) derivative-work originality and safe-harbor eligibility; substantial similarity may show infringement but does not resolve whether a work is a protected derivative for § 104A remedy limitations.
- At the preliminary-injunction stage, broad relief is improper where the record lacks a design-by-design determination of which accused works are excluded from, or covered by, the § 104A derivative-works provisions.

## Conclusion

The Third Circuit held Dam Things was likely entitled to restoration of U.S. copyright in its Danish troll design and likely had not abandoned it, but it required a granular analysis of whether Russ’s individual troll designs were protected reliance-party derivative works under § 104A, vacating broad preliminary injunctive relief and remanding to determine the proper scope of remedies.


Dam Things from Den. a/k/a Troll Co. ApS v. Russ Berrie & Co., 290 F.3d 548 (3d Cir. 2002)