More Discerning Observer test

 The Second Circuit issued a summary order today in an 11 page opinion that raises interesting questions of infringement and appellate procedure. The case is Lego A/S v. Zuru, Inc., 24-634 cv and came on appeal from the District Court of Connecticut. The facts are a bit messy, but in essence involve the scope of a preliminary injunction.  The trial court had issued a preliminary injunction over Zuru's toy figurines which it thought likely to be substantially similar to mini-figurines of Lego. The injunction also applied to any further figurines that were substantially similar. A second set of figurines were manufactured and sold by Zuru, which the trial court held to be in contempt of the injunction. A third set was created which Zuru gave Lego and the court notice of, as the contempt order required. The trial court issued a TRO enjoining the third set, but in a very brief order. Zuru appealed arguing the third set was not substantially similar to Lego's works. 

The Second Circuit remanded because the trial court had not performed any analysis comparing the third set to Lego's works, indeed had "provided no reasoning for its decision." Ordinarily, once would simply remand. However, in this instance, the court of appeals, relying on its decision in United States v. Jacobson, 15 F.3d 19 (2d Cir. 1994),  ordered the trial court to supplement its reasoning. Upon issuance of a new order, the circuit stated that "either party may reinstate this appeal by filing a letter with the Clerk of this Court. If either party files such a letter seeking further action from this Court, the matter will be referred to this panel." 

On remand, the circuit ordered the trial court to use the more discerning observer test, and "must not base its finding of substantial similarity on unprotectable elements ... ." The more discerning observer test is employed to ensure that when a work contains both protectible and unprotectible elements, but substantial similarity can only be found in the similarities between the protectible elements. Unlike the Ninth Circuit's bifurcated extrinsic and intrinsic test, the Second Circuit's approach is unitary and while the unprotectible elements are excluded from consideration, still in the end the "total concept and feel" test is employed with substantial similarity always being in protectible elements. 

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