## Facts

- Knitwaves, Inc. designed and sold children’s fall-themed knitwear, including the “Leaf Sweater” (striped background with puffy leaf appliqués) and the “Squirrel Cardigan” (squirrel and leaves appliquéd on a multi-paneled front), and obtained copyrights for those designs.
- Lollytogs Ltd. (Inc.), selling under the “French Toast” label, released competing fall sweaters that included leaf and squirrel designs that were admittedly copied from Knitwaves’ sweaters.
- The accused sweaters used similar appliqués, comparable striping/paneling, and an autumn color palette that produced a similar overall aesthetic.
- Knitwaves sued for copyright infringement and for unfair competition/trade dress infringement under the Lanham Act and New York law.
- After a preliminary injunction and a bench trial, the district court found willful infringement under copyright and trade dress theories, issued a permanent injunction, and awarded monetary relief including statutory damages, profits, lost profits, costs, and attorney’s fees.
- Lollytogs appealed liability and remedies; Knitwaves cross-appealed as to the amount of damages.

## Issues

1. Whether the accused sweaters were substantially similar to the copyrighted sweater designs under the ordinary observer test as applied to works containing both protectable expression and unprotectable ideas.
2. Whether the sweater designs constituted protectable, inherently distinctive trade dress under Lanham Act § 43(a).
3. Whether the remedies were proper, including lost profits, refusal to apportion profits, willfulness findings, statutory damages enhancement, and attorney’s fees.

## Decision

- Affirmed the finding of copyright infringement because the accused sweaters were substantially similar in protectable expression when viewed for their overall look.
- Reversed the Lanham Act/trade dress liability determination.
- Vacated the $12,000 lost-profits award as unsupported.
- Affirmed the refusal to apportion profits between infringing and non-infringing elements.
- Affirmed the finding of willful copying and upheld the statutory damages award without enhancement.
- Held the attorney’s fee award excessive and required a reduction.

## Legal Principles

- Copyright protects the particular artistic expression of a theme (e.g., arrangement, composition, stylization, and color choices), not the underlying idea or general motif.
- Where a work mixes protectable and unprotectable elements, the substantial-similarity analysis may apply a more discriminating view that filters out unprotectable matter, while still assessing whether the protectable elements create a substantially similar overall aesthetic.
- Substantial similarity may be found based on the “total concept and feel” of the works; itemized differences do not control if the overall expressive impression is effectively the same.
- Product-design trade dress requires a showing that the claimed design functions as a source identifier; broad protection for a general aesthetic style is disfavored, particularly where it risks granting perpetual control over designs already governed by copyright limits.
- Lost profits must be supported by non-speculative proof; unsupported projections are not recoverable.
- In awarding infringer’s profits, a court may decline apportionment where the infringement is treated as the principal driver of sales and the defendant fails to carry its burden to show deductible or separable non-infringing value.
- Attorney’s fees in copyright cases must be reasonable and proportionate; excessive awards warrant reduction.

## Conclusion

The court sustained liability and core monetary and injunctive relief for willful copyright infringement based on substantial similarity in the sweaters’ protectable overall look, but rejected trade dress protection for the general fall-themed product design, vacated an unsupported lost-profits component, and reduced excessive attorney’s fees while leaving statutory damages unenhanced.


Knitwaves, Inc. v. Lollytogs Ltd. (Inc.), 71 F.3d 996 (2d Cir. 1995)