Troll Dolls and Restoration

Judge Jon O. Newman of the Second Circuit is one of our national treasures. He has devoted his long, illustrious career to public service, beginning as a law clerk to Chief Justice Earl Warren, stints as a U.S. Senate aide, U.S. Attorney for the District of Connecticut, U.S. district judge, and chief judge of the court of appeals. His opinions are always thoughtful, restrained, and scholarly. We are doubly blessed because Judge Newman has been the author of dozens and dozens of landmark copyright opinions. We now have a new one, Troll Company v. Uneeda Doll Company, 2007 WL 1097082 (2d Cir. April 13, 2007).

The case is one of first impression in the Second Circuit, and one of the few on Section 104A. (See also Dam Things from Denmark v. Russ Berrie & Co., 290 F.3d 554 (2d Cir. 2002)). The works at issue are "those dam" troll dolls, "ugly but somehow endearing ... with oversized heads, big grins, pot bellies, and frizzy hair." The dolls have Denmark as a country of origin. They fell into the public domain for failure to affix notice; they were restored by Section 104A in the 1994 GATT implementing legislation.

Two issues were presented: (1) was plaintiff Troll Co. the owner of the restored copyright; (2) was defendant Uneeda a "reliance party." The questions were answered (prelimarily), respectively, yes and no. The first question turned on a number of factors, principal of which was the choice of law provision in Section 104A(b): rather than determining ownership of restored copyrights by reference to U.S. copyright law, such rights are governed by the law of the country of origin. This means that courts will have to examine a diversity of sources, but it is the only appropriate way to deal with the issue: the copyrights that were restored were created by foreign law. In 1994, we considered a proposal to apply U.S. law, but rejected it out of hand. Examining Danish copyright law, Judge Newman's opinion affirmed the preliminary injunction holding it likely that under Danish law, plaintiff is likely to be deemed the author.

The reliance party issue is one that we very deliberately considered in drafting Section 104A: it was the key element in concerns over a Takings Clause violation. One aspect of reliance party status was critical in Judge Newman's opinion: the requirement the reliance party has engaged in "continuing acts." The act deliberately refrains from providing a definition of "continuing" due to the fact-specific nature of such inquiries. Instead, in Congressman Hughes's floor statement, he analogizes to the continuing infringement doctrine, a doctrine well understood by courts, since they developed it. Judge Newman cites this statement and comes to the correct conclusion: defendant, who ceased exploiting the work for many years was not a reliance party.

Judge Newman's opinion points out one reason why Justice Scalia's screed against resort to legislative history is so profoundly misguided. Congress, aware that efforts to define a concept in the statute might prove under or over inclusive of the facts in real disputes, chose to refer courts, in legislative history, to a doctrine they had themselves developed and applied . Given that there was no Judiciary Committee report on the bill due to its fast-track nature, the legislative history was a floor statement by the subcommittee chairman, the person with the most familiarity with the provision, indeed the person on whose behalf the provision was drafted and inserted. A dispute arose, the court found the statute could admit of either argument advanced by defendant, and so it resorted to the floor statement, which supplied the answer.

Bravo to Judge Newman and to Craig Mende of Fross Zelnick of NYC, attorney for plaintiff.