Dam Things From Denmark, A/K/A Troll Company Aps v. Russ Berrie & Company, Inc.

OPINION OF THE COURT

We consider this case on an expedited appeal from the United States District *552 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. § 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 § 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 § 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, PI, 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 § 104A provides for derivative works.

We believe that the District Court properly determined that Dam Things was likely to establish that Pi’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 § 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 — PI. 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, *553 was based on its determination that the copyright in the 1957/1958 “Original Good Luck Troll,” PI, qualified for restoration. Furthermore, on appeal Dam Things has clearly stated that PI 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 PI.

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 Things 3 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 manufactur *554 ing trolls. In the 1990s, Russ obtained fifteen 4 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. § 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 5 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 § 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 § 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,” 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—

*555 (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;

(ii) lack of subject matter protection in the case of sound recordings fixed before February 15,1972; or

(in) 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. § 104A(h)(6)(A)-(D).

Dam Things claims that its copyright in its original troll qualifies for automatic restoration in accordance with § 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. § 104A(a)(l)(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. § 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 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. § 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. § 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. § 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 *556 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 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. § 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. § 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., 173 F.Supp.2d 277, 281 (D.N.J.2001) (quoting Doe v. 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. § 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 *557 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 — Plaintiffs Exhibit 1 (“PI”). 11 Dam Things 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 PI 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 Plaintiffs 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 PI.

Russ does not contest before us the fact that PI was first published in Denmark. Instead, it argues that P4 is the relevant troll because it is really the troll that Dam *558 Things contends Russ infringed. Dam Things, on the other hand, suggests that P4 is not a distinct work from PI 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 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 PI was the only specific item as to which restoration was sought. 13

As the other trolls that were created after PI are not identical works and were first used admittedly at different times and even in different locations than PI, our holding as to the restoration of PI does not control as to restoration of any other specific troll. That is not to say that the copyright restored in PI 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 extent that Russ argues that its trolls are merely derivative or even copies of Dam Things works other than PI. 14

Our holding today as to restoration is therefore limited to PI, 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 PI was restored. Therefore the place where PI 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 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 *559 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 PI.

We have held that judicial estoppel 15 is appropriate only 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 PI. 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 PI, and, therefore, are not inconsistent with representations regarding Pi’s date and place of publicátion. 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. § 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. § 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 PI, let alone regarding its date or place of first publication. Therefore, Dam Things’ position here that PI 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

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 *560 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 PI. 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 § 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. § 104A.

3. Conclusion

The District Court concluded “that [Dam Things] can prove all of the requisite elements of § 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 PI 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 individuál copyright protection. Contrary to Defendant’s contention, Plaintiffs [sic] do not claim a copyright on the idea of a *561 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 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 § 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 § 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 § 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 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.1991) (footnote omitted) *562 (“[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. § 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 Amstein 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).

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, 111 S.Ct. 1282, 113 L.Ed.2d 358 (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.

*563 2. Derivative Works

In light of the special provisions in § 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, 111 S.Ct. 1282; see also U.S. Const. art. I, § 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. § 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 dispensation and is not considered an infringer, and is instead treated as a licensee. 17 U.S.C. § 104A(d)(3).

In considering the originality required to qualify for copyright protection as a derivative work, the Supreme 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, 111 S.Ct. 1282 (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.

*564 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 Pad-dington 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.2