Lego Contempt Ruling

UNITED STATES DISTRICT COURT

DISTRICT OF CONNECTICUT

 ——————————– x  LEGO A/S; LEGO SYSTEMS, Inc.; :  and LEGO JURIS A/S, : 

                               : 

          Plaintiffs,             : Civil No. 3:18-cv-2045(AWT)

                               :

v.   :    :

ZURU, INC.,                     : 

:

          Defendant.            : 

——————————– x 

RULING ON MOTION FOR CONTEMPT 

Plaintiffs LEGO A/S, LEGO Systems, Inc., and LEGO Juris A/S

(the “LEGO Group”) move for a finding that defendant ZURU, Inc. is in contempt of the Preliminary Injunction Order (ECF No. 47) issued by the court on July 8, 2019. For the reasons set forth below, the plaintiffs’ motion is being granted. 

I. PROCEDURAL BACKGROUND AND FACTS 

The plaintiffs brought this action seeking, inter alia, a temporary restraining order and a preliminary injunction enjoining the defendant from manufacturing, selling, offering for sale, distributing, displaying, and importing products that infringe the plaintiffs’ copyrights, trademarks, and design patents. A temporary restraining order was issued after a hearing on December 14, 2018. In February 2019, there was a twoday evidentiary hearing on the LEGO Group’s motion for a preliminary injunction. The temporary restraining order remained in place by agreement pending the court’s ruling on the motion for a preliminary injunction. 

The temporary restraining order and the Preliminary

Injunction Order addressed the plaintiffs’ Minifigure figurine,

Minifigure Copyrights, and Minifigure Trademarks; the plaintiffs’ U.S. Patent Nos. D688, 328S, D641, 053S, and D614707S; and the plaintiffs’ copyrighted Friends figurine and

Friends Copyrights (all as defined in the plaintiffs’ memorandum of law (ECF No. 7-1)). At issue in the instant motion for contempt is the plaintiffs’ Minifigure figurine, Minifigure Copyrights, and Minifigure Trademarks.

The Preliminary Injunction Order provided, inter alia, that it was: 

FURTHER ORDERED that the defendant, ZURU, Inc., together with its agents, servants, employees, successors and assigns, and all those in active concert or participation with them, hereby are, and using defined terms as they appear in the plaintiffs’ memorandum of law (ECF No. 7-1), RESTRAINED AND

ENJOINED from 

a. Manufacturing, selling, offering for sale, distributing[1], displaying or authorizing the sale of products, including the Infringing Products, containing unauthorized reproductions of the copyrighted and trademarked Minifigure figurine, including any figurine or image that is substantially similar to the Minifigure Copyrights or likely to be confused with the Minifigure

Trademarks[.]

Prelim. Inj. Order at 1-2, ECF No. 87. See also TRO at 2, ECF No. 19. The Preliminary Injunction Order: 

FURTHER ORDERED that the defendant must take actions to ensure the removal of the Infringing Products from the market, including recalling, to the extent it has the right to do so, all Infringing Products from its retailer, Walmart, and any other distributor of

Infringing Products in the United States, and filing on the docket a declaration detailing those actions within thirty (30) days from the grant of the

Preliminary Injunction[.]  

Prelim. Inj. Order at 1-2. Simultaneously with the issuance of the Preliminary Injunction Order, the court issued a written ruling, the Ruling on Motion for Preliminary Injunction (the “Ruling”), ECF No. 86, setting forth in detail its analysis and conclusions. 

     In December 2018, after the issuance of the temporary restraining order, the defendant began the process of redesigning its MAX Build More figurines, and by March 4, 2019 the defendant had developed redesigned figurines (the “Redesigned Figurines”). 

     In January 2019, ZURU, LLC, an Oregon limited liability company whose sole member is ZURU, Inc., commenced a parallel action in the Central District of California, which has now been transferred to this district. See ZURU LLC v. LEGO Systems Inc., 3:19-cv-1128 (AWT) (D. Conn.). On August 24, 2019, ZURU, LLC filed a first amended complaint in the California action, in which it submitted the Redesigned Figurines and corresponding

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images of them (the “Redesigned Images”) and sought declarations of invalidity and noninfringement with respect to the plaintiff’s copyrights and trademarks. ZURU, Inc. submitted the Redesigned Figurines and the Redesigned Images and requested a declaration of non-infringement in this case in its counterclaim included in its Answer (ECF No. 94), filed on July 22, 2019.      On August 7, 2019, Anna Jane Mowbray, the Chief Operating Officer of ZURU, Inc., filed a sworn declaration with the court as required by the Preliminary Injunction Order. Mowbray averred in her declaration that: 

ZURU also previously discussed the PI Order with

Walmart and understood from Walmart that Walmart was removing the Enjoined Products from the shelves of its stores in the United States and was no longer making the Enjoined Products available for sale in the United

States through its website. ZURU has also since confirmed that Walmart has removed the Enjoined

Products from the shelves of its stores in the United States and was no longer making the Enjoined Products available for sale in the United States through its website. Walmart is the only retailer to whom ZURU shipped allegedly infringing MAX Build More figures and block sets.      

Decl. of Anna Jane Mowbray at ¶ 5, ECF No. 97. 

     Also in early August 2019, ZURU, Inc. relaunched its Max

Build More line of toys in the United States absent the Infringing Figurines, Infringing Images, and Infringing Bricks.

It was available for sale on Walmart.com and in Walmart retail locations.  

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     With respect to the plaintiffs’ Minifigure figurine and the defendant’s Infringing Figurines, the Ruling explained, inter alia, that: 

The standard test for substantial similarity between two items is whether an “‘ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them, and regard

[the]

aesthetic appeal as the same.’” Hamil America Inc. v. GFI, 193 F.3d 92,

100 (2d Cir. 1999) . . . . ‘The fact-finder must examine the works for their “total concept and feel.’ Hamil America, 193 F. 3d at 102 (quoting Knitwaves, 71

F. 3d at 1002).” Yurman Design, Inc. v. PAJ, Inc., 262 F. 3d 101, 111 (2d Cir. 2001). “Consideration of the total concept and feel of a work, rather than specific inquiry into plot and character development, is especially appropriate in an infringement action involving children’s work, because children’s works are often less complex than those aimed at an adult audience.” Williams v. Crichton, 84 F. 3d 581, 589 (2d Cir. 1996) (citing Reyher v. Children’s Television

Workshop, 533 F.2d 87, 91 (2d Cir. 1976), cert. denied, 429 U.S. 980 (1976).  

The evidence at the hearing showed that the total concept and feel of the defendant’s Infringing

Figurines is substantially similar to that of the plaintiffs’ Minifigure figurine. At the hearing, the plaintiffs’ expert witness, Elizabeth Knight

(“Knight”), demonstrated the substantial similarities between the Minifigure figurine and the Infringing Figurines by showing the results of a side-by-side comparison of the figurines and also showing the results of an overlay of images of the figurines. The side-by-side comparison and the overlay demonstrated there is very little in terms of differences between the plaintiffs’ and defendant’s products.

Ruling on Mot. for Prelim. Inj. at 9-11. 

     The Ruling also reflects that the court concluded that:  The average lay observer for purposes of this case would be an adult who is buying toys for a child, and  . . . . adults do not pay as close attention to these

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products as children do. Also, as the defendant’s expert, Richard Gottlieb (“Gottlieb”), testified, and Knight agreed, “it’s harder for an adult” to see the small differences between the products because “[a]n adult looks very briefly. They don’t pay a lot of attention.” 

Id. at 11. 

The defendant’s design documents for the Redesigned

Figurines show that the defendant started with the plaintiff’s

Minifigure figurine and then considered using different proportions with respect to various parts of the figurine, as well as using the same proportions but shapes that were different from the plaintiffs’ Minifigure figurine. See Pls.’ Exs. 8 through 12 and 15.  

     Of course, the defendant did not have the benefit of the Ruling at the time it developed the Redesigned Figurines during the period from December 2018 to March 2019. However, Sherrie Hargus, ZURU, Inc.’s Vice President of Sales – Walmart and Sam’s

Club, testified about the defendant’s efforts to comply with the

Preliminary Injunction Order, as well as the design of the

Redesigned Figurines and the rollout of that product. In response to a question from the court about what the defendant did to be certain that the Redesigned Figurines were not in violation of the Preliminary Injunction Order, Hargus testified that ZURU, Inc. “took another look at the entire product.” Mot.

for Contempt Hr’g Tr. at 65:1-2, ECF No. 137. She testified

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that, in doing so, ZURU’s engineering team and marketing team took into account the Preliminary Injunction Order and then assessed the Redesigned Figurines. No change was made to the Redesigned Figurines after the defendant reviewed the Preliminary Injunction Order. 

     ZURU, Inc. has been distributing the Redesigned Figurines in the United States through Walmart.com. The Redesigned

Figurines appear in the Redesigned Images.                         

II. DISCUSSION  

A. ZURU, Inc. Is In Contempt                         

“[A] contempt order is a ‘potent weapon,’ Int’l

Longshoremen’s Ass’n v. Phila. Marine Trade Ass’n., 389 U.S. 64,

76 (1967), that is inappropriate if ‘there is a fair ground of doubt as to the wrongfulness of the defendant’s conduct,’ Cal. Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 6`8

(1885).” Latino Officers Ass’n City of New York, Inc. v. City of

New York, 558 F.3d 159 (2009). “A contempt order is warranted only where the moving party establishes by clear and convincing evidence that the alleged contemnor violated the district court’s edict.” King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995). “[S]pecifically, a movant must establish that

(1) the order the contemnor failed to comply with is clear and unambiguous, (2) the proof of noncompliance is clear and convincing, and (3) the contemnor has not diligently attempted

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to comply in a reasonable manner.” Id.; see also Latino Officers

Ass’n, 558 F.3d at 164. 

The plaintiffs have met their burden with respect to each of these three requirements, and the court finds that ZURU, Inc.

is in contempt of the Preliminary Injunction Order. 

1. Clear and Unambiguous Order     

The language of the Preliminary Injunction Order is clear and unambiguous. The prohibition extends to “any figurine or image that is substantially similar to the Minifigure Copyrights or likely to be confused with the Minifigure Trademarks.” In its opposition, ZURU, Inc. states in a footnote that “[t]he boundaries of the terms ‘substantially similar’ and ‘likely to be confused with’ in the Preliminary Injunction are ambiguous.” ZURU, Inc.’s Opp’n to Pl.’s Mot. for Contempt at 2 n.1, ECF No.

124. It is unclear exactly what point ZURU, Inc. is making in this footnote, but, in any event, the use of these terms in the Preliminary Injunction Order is based on the discussion and analysis in the Ruling, where these terms are elaborated upon in detail. Also, at the hearing, ZURU, Inc. did not point to any ambiguity in the terms of the Preliminary Injunction Order; rather it argued, with respect to the Redesigned Figurines, that “it is a figure that ZURU does not believe is substantially similar to the minifigure copyright or likely to be confused with the minifigure trademark, which is the standard in the

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preliminary injunction.” Mot. for Contempt Hr’g Tr. at 170:18-

22.        

2. Clear and Convincing Proof of Noncompliance 

There is no question that ZURU, Inc. has engaged in

“manufacturing, selling, offering for sale, distributing, displaying, or authorizing the sale of” the Redesigned Figurines. Prelim. Inj. Order at 2. The relevant inquiry here is whether the plaintiffs have established by clear and convincing evidence that the products at issue contain “unauthorized reproductions of the copyrighted and trademarked Minifigure figurine, including any figurine or image that is substantially similar to the Minifigure Copyrights or likely to be confused with the Minifigure Trademarks.” Prelim. Inj. Order at 2. The plaintiffs have done so. 

It is undisputed that there are disparities between the plaintiffs’ Minifigure figurine and the defendant’s Redesigned Figurines. But the plaintiffs have demonstrated by clear and convincing evidence that unless an ordinary observer set out to detect the disparities, that person would be disposed to overlook them and regard the aesthetic appeal of the two products as the same.     

The plaintiffs’ expert who testified at the hearing on the motion for a preliminary injunction, Elizabeth Knight, also testified on October 30, 2019 at the hearing on the motion for

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contempt. Knight showed the results of an overlay of the plaintiffs’ Minifigure figurine and the Redesigned Figurines; this was something she had also done at the hearing on the motion for a preliminary injunction with respect to the plaintiffs’ Minifigure figurine and the Infringing Figurines. The results of the overlay supported her conclusion that the plaintiffs’ Minifigure figurine and the defendant’s Redesigned Figurines “are virtually the same to the perception of the consumer.” Mot. for Contempt Hr’g Tr. at 124:11-12. Knight showed the results of an overlay from a front view, a side view, and a top view, demonstrating that the differences are noticeable only upon careful examination of the figurines. Knight also showed the results of a comparison between the

Infringing Figurines and the Redesigned Figurines. She was able to demonstrate that when one looks at the material that was added to create the Redesigned Figurines and when one looks at the material that was removed in order to create the Redesigned Figurines, the differences are, in each instance, “minuscule.”

Id. at 126:3. 

The defendant’s expert, Ronald Kemnitzer, testified that the overall appearance of the Redesigned Figurines is not substantially similar to the plaintiffs’ Minifigure figurine because of a number of differences. Kemnitzer agreed, however, that what is relevant is the total concept and feel: “Let me

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preface this comparison by saying that it’s not the comparison of individual elements that constitute a test of being substantially similar. It’s a test of the overall appearance.”

Id. at 83:22-25. 

Kemnitzer specifically discussed seven ways in which he contends the Redesigned Figurines are different from the plaintiffs’ Minifigure figurine. Kemnitzer did not address whether these differences are ones that would be harder for an adult to see when buying toys for a child because an adult looks very briefly at toys, as ZURU, Inc.’s expert Richard Gottlieb testified at the hearing on the motion for a preliminary injunction. See Prelim. Inj. H’rg Tr. 153:20-22, ECF No. 65 (“An adult looks very briefly. They don’t pay a lot of attention.”).  

First, Kemnitzer discussed the head of the Redesigned

Figurines. He testified that, although the Redesigned Figurines have a cylindrical head like the Minifigure figurine, “the head also has ears and it has a shield shaped front side and it has a descending chin. So it’s really different.” Id. at 84:22-25.    Kemnitzer also testified that “the redesign of the head and enlarging it changes the proportions of the head to the overall stature of the figurine.” Id. at 95:8-10. Kemnitzer placed significance on the fact that the proportion of the head size to the height of the LEGO Minifigure figurine is equivalent to the head size of a three-year-old child, while the proportion of the

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head size to the height of the Redesigned Figurines is equivalent to the head size of a one-year-old child. However, the overall height of the plaintiffs’ Minifigure figurine is 40.33mm and the overall height of the Redesigned Figurine is

41.6mm, a difference of 1.3mm. Given the overall heights of the Minifigure figurine and the Redesigned Figurines, the difference between a head that is proportioned in size to that of a threeyear-old and a head that is proportioned in size to that of a one-year-old is not something that an average lay observer would notice unless that person carefully examined the figurines sideby-side. Thus, the proportion of the head size to the overall stature of the Redesigned Figurines supports the plaintiffs’ position, not the defendant’s.

Second, Kemnitzer testified that “the diameter of the LEGO neck is substantially different than the neck of the redesigned MAX. And the reason for that is — the reason MAX has a ball and socket joint on the head so it can move in different ways.” Id. at 85:3-6. However, the ball and socket joint on the Redesigned Figurines is not something that would be apparent to an average lay observer, i.e., an adult who is buying toys for a child, unless that person set out to detect the difference, particularly in light of the fact that the figurines are in packaging when they are displayed for sale. Nor would the difference in the diameters of the necks be a disparity that

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such an average lay observer would detect under such circumstances. 

Third, Kemnitzer testified about the torso of the

Redesigned Figurines. He noted that “[t]he redesigned MAX figure does not have a trapezoidal figure,” id. at 85:11-12, and “if you look at the figure, the space between the side of the torso and the arm, you will see that [the torso] has a pretty substantial scoop out of it. It’s that absence of material in that area that does a couple things: It creates a visual gap between the side of the torso and the arm, and then the chamfers make the break sharper.” Id. at 85:21-86:2. However, the results of the overlay conducted by Knight showed that the disparities between the torsos are not something that an average lay observer would notice unless that person set out to detect the disparities. 

Fourth, Kemnitzer testified that “in the LEGO the sides are flat and the back is flat,” id. 86:17-18, but in “the redesigned MAX figurine, the front of the torso . . . actually has a slight curvature,” id. at 86:20-21. When asked if one could see the “slight curvature” on one of the exhibits, Kemnitzer stated

“[y]es, you can.” Id. at 86:23. However, the exhibits introduced at the hearing reflect that the curvature is barely perceptible. In any event, it is something that an average lay observer might

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not notice even if that person had set out to detect disparities.

Fifth, Kemnitzer testified about the arms. He testified, with respect to the Minifigure figurine, that “the arms are mounted slightly below the upper surface of the torso” and “the arms at the side are uniform, pretty much uniform in thickness and configuration.” Id. at 87:1-5. With respect to the Redesigned Figurines, he stated that “[t]he redesigned MAX figurine, on the other hand, has shoulders that extend well above the top of the torso and they’re very bulbous. And the arms of the figurine vary substantially in changes from thick to thin.” Id. at 87:6-9. However, the results of the overlay conducted by Knight reflects that, with the exception of the “bulbous” shoulders, which would not stand out to an average lay observer, i.e., someone who is looking very briefly, the differences are minuscule. 

Sixth, Kemnitzer testified that “[t]he LEGO figurine sits on top of a rectangular plate and it actually is removable from it,” while “[t]he torso of the redesigned figure actually rotates around the top plate 360 degrees so that he can be positioned in ways that illustrate more natural walking or scarier walking or even doing the splits.” Id. at 87:14-15 and 87:18-21. However, this disparity is something that would not be apparent to an average lay observer, i.e., an adult who is

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buying toys for a child, unless that person set out to detect the disparities, particularly in light of the fact that the figurines are in packaging when they are displayed for sale. 

Finally, Kemnitzer testified about the legs. He testified, with respect to the Minifigure figurine, that the legs “bulge [frontwards] at the top and otherwise are rectangular with uniform thickness” and “com[e] off of the torso and mov[e] down to the leg portion without any interruption.” Id. at 87:23-24 and 88:5-6. He testified, with respect to the Redesigned Figurines, that “what’s happening in the leg area of the redesigned figurine, is there is a lot of open space between the legs and the top of the legs and base plate.” Id. at 88:13-15. In addition, Hargus testified that the “[o]ur legs are thicker, more closely resembling actual muscle of the human. The way the bottom half fits compared to LEGO, when you look at it visually, the appearance is more like a human.” Id. at 67:22-68:1. However, the results of the overlay conducted by Knight demonstrated that the differences are very minor.  

Thus, the disparities pointed out by the defendant range from barely perceptible to very minor or miniscule disparities that are noticeable only if one sets out to detect them. They are, individually and in the aggregate, ones that an average lay observer, i.e., an adult who is buying toys for a child and looking briefly at the toys, would be disposed to overlook.

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Kemnitzer also testified that there is not a substantial similarity between the plaintiffs’ Minifigure figurine and the Redesigned Figurine because they have different persona. He stated: “I think the LEGO figurine projects a picture – a persona of a robotic, inanimate, passive and out of shape figurine.” Id. at 91:22-4. He described the persona of the Redesigned Figurine as “aggressive . . . . masculine, rugged, animated, edgy.” Id. at 92:18-19. Hargus also testified that various parts of the Redesigned Figurine, e.g., the head, the arms, and the joints of the hips, can move like a human. However, a side-by-side comparison of the defendant’s Infringing

Figurines and the Redesigned Figurines, as well as the results of the overlay conducted by Knight with respect to the Infringing Figurines and Redesigned Figurines, demonstrate that there is very little in terms of differences between those two versions of the defendant’s figurines. Thus, in advancing these contentions with respect to the ability of the Redesigned Figurines to move like a human and their persona in opposition to the instant motion, ZURU, Inc. is merely reasserting arguments that were made by it in opposition to the motion for a preliminary injunction and addressed in the Ruling: 

The defendant argues that the similarities between the

Minifigure figurine and the Friends figurine, on the one hand, and the Infringing Figurines and the

Infringing Friends Image, on the other hand, are not substantial when one makes a visual comparison. The

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defendant argues: “ZURU’s products have flexible joints that provide more degrees of freedom for moving limbs. Additionally, Plaintiffs’ figurines utilize geometric shapes, such as the trapezoidal torso, resembling robots; whereas ZURU’s products feature cut-in waists, broad shoulders, and rounded hips resembling humanoid physiques.” Def.’s Mem. in Support of Mot. to Dismiss (ECF No. 31-1), at 32. Also, the defendant’s expert witness, Gottlieb, testified that the ZURU Inc. MAX Build More product is “substantially different” from the Minifigure figurine because the “MAX product looks a little bit more like an action figure” whereas “the LEGO product is really more of a construction element.” Prelim. Inj. Hr’g Tr. (ECF No. 65), at 153:17, 153:24—154:6; see also Def.’s Closing

Arg. (ECF No. 57), at 17. However, these arguments deserve less weight than Knight’s analysis in light of the fact that the standard for determining substantial similarity is whether an “ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them, and regard the aesthetic appeal the same.” Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101,

111 (2d Cir. 2001) (emphasis added).

Ruling on Mot. for Prelim. Inj. at 12-13. 

3. Failure to Diligently Attempt to Comply in a Reasonable Manner    

The plaintiffs have established that the defendant did not diligently attempt to comply with the Preliminary Injunction Order in a reasonable manner. 

The defendant began the process of designing the Redesigned

Figurines in December 2018. By early March 2019, the defendant had completed the process of developing the Redesigned Figurines. Hargus testified that she was “involved in every conversation [with Walmart] as it related to communicating any changes to the product.” Mot. for Contempt Hr’g Tr. at 24:3-4.

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By early April, Hargus had presented the Redesigned Figurines to

Walmart.com, and Walmart.com placed orders for the Redesigned

Figurines on April 27, 2019 and May 28, 2019. The required factory ship dates for those orders were June 11, 2019 and July 1, 2019, respectively. Hargus testified that the goal was for the entire program to “be up in August.” Id. at 55:21-22. 

Hargus was offered by the defendant as a witness who would testify about ZURU, Inc.’s efforts to comply with the Preliminary Injunction Order, the design of the Redesigned Figurines, and ZURU, Inc.’s rollout of the Redesigned Figurines.

With respect to ZURU Inc.’s efforts to comply with the

Preliminary Injunction Order, Hargus offered detailed testimony about the entire MAX Build More program being pulled off the shelves at Walmart stores and being put in the back of the stores in an on-hold location one week prior to Christmas. She testified about MAX Build More toys being donated by Walmart to the Boys and Girls Clubs. She testified with specificity about what Walmart charged ZURU, Inc. to remove the toys in the MAX Build More program from Walmart stores. She testified about the costs that ZURU, Inc. has incurred and will incur as a result of the donation and the destruction of toys in the MAX Build More program. 

With respect to ZURU Inc.’s design and rollout of the Redesigned Figurines, Hargus testified that she was “aware of

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our team’s due diligence as it related to making sure that our product was completely different than LEGO product on all levels.” Id. at 25:16-18. However, in response to questions from the court, Hargus conceded that she was not “involved in the specifics of the redesign outside of presenting what the redesign would be to Walmart.” Id. at 64:12-14. She was able to testify only that it was her “understanding that [people at ZURU, Inc.] did their due diligence as related to the patents and other things.” Id. at 64:14-16. When asked what ZURU, Inc. did after July 8, 2019 to be certain that the Redesigned Figurines were not in violation of the Preliminary Injunction

Order, Hargus testified that “[t]his specific product was reviewed again to make sure that we were in contrast to the Lego product. Our team made sure that we were looking at [it], in good faith, [and] we felt that the redesign put us even further from the Lego products . . . visibly from a consumer perspective and otherwise.” Id. at 65:7-12. Hargus provided no information as to any purported basis for ZURU, Inc. to be confident that it was in compliance with the Preliminary Injunction Order. Hargus had no personal knowledge of any specific steps that were taken or any questions that were considered as part of an evaluation of the Redesigned Figurines in light of the analysis and conclusions in the Ruling. In fact, there is no credible evidence that ZURU, Inc. ever took any such steps or considered

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any such questions; the court cannot credit the testimony by Hargus about the Redesigned Figurines being reviewed again in light of the number of occasions during her testimony when she made statements that were subsequently revealed to be inaccurate or misleading.  

Rather, ZURU Inc.’s design documents show that it started with the plaintiffs’ Minifigure figurine and decided what changes to make to the plaintiffs’ figurine to come up with the Redesigned Figurines, and then chose not to make any further change after the Preliminary Injunction Order and the Ruling were issued. The evidence here shows that ZURU, Inc., having geared up to distribute the Redesigned Figurines through Walmart.com, simply decided not to disrupt its launch of the

Redesigned Figurines. 

III. Willful Violation  

The plaintiffs request an award of reasonable attorneys’ fees and costs associated with enforcement of the Preliminary Injunction Order. The court concludes that such an award is appropriate here.

“[C]ourts in this Circuit generally ‘award the reasonable costs of prosecuting the contempt, including attorney’s fees,’ only where violation of a court order is found to have been willful.” Manhattan Industries, Inc. v. Sweater Bee by Banff, Ltd., 885 F.2d 1, 8 (2d Cir. 1989) (quoting Canterbury Belts

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Ltd. v. Lane Walker Rudkin, Ltd., 869 F.2d 34, 39 (2d Cir.

1989)). The court finds that ZURU, Inc.’s contempt was willful.

Having been enjoined in the Preliminary Injunction Order,

ZURU, Inc. had an obligation to keep a “safe distance” from infringing conduct going forward. “The safe distance rule is a ‘well-accepted part of the court’s remedial toolkit.’ It is designed to prevent a proven infringer from evading contempt charges by making only insignificant changes to the infringing mark and continuing its conduct.” J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition §30:21 (5th ed. 2018); see also Oral-B Lab., Inc. v. Mi-Lor Corp., 810 F.2d 20, 24 (2d Cir. 1987) (“The court having found, at least as a preliminary matter, that Mi-Lor had infringed Oral-B’s trade dress, it was Mi-Lor’s duty to keep a safe distance from the line drawn by the district court’s injunction.”). 

Here, ZURU, Inc. made no effort to keep a “safe distance” from infringing conduct after the issuance of the Preliminary Injunction Order. In fact, as discussed above, first, the results of Knight’s comparison of the Infringing Figurines and the Redesigned Figurines demonstrates that the differences between them are noticeable only upon careful examination; and second, there is no evidence that ZURU, Inc. made any effort at all to avoid engaging in infringing conduct with respect to the Redesigned Figurines after the issuance of the Preliminary

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Injunction Order. The reference to an infringer who attempts to

“evade contempt charges by making only insignificant changes” is an accurate description of the conduct by ZURU, Inc. here, with respect to its conduct both before and after the issuance of the Ruling and the Preliminary Injunction Order. 

The fact that ZURU, Inc. continued with its launch of the

Redesigned Figurines, as the redesign had been finalized in

March 2019, in reliance on arguments that had been rejected in the Ruling, shows that ZURU, Inc. was more concerned about being able to continue with the launch of the Redesigned Figurines than about complying with the Preliminary Injunction Order.                

IV. Modification of the Preliminary Injunction Order                 

The plaintiffs seek an amendment to the Preliminary

Injunction Order to add the following language: “FURTHER ORDERED that the defendant must seek the Court’s approval prior to manufacturing, selling, offering for sale, distributing, displaying or authorizing the sale of any figurine in its enjoined product lines.” Emergency Mot. for Contempt at 2, ECF No. 114. The plaintiffs argue that “nothing will control ZURU’s future actions or maintain the status quo absent modification of the [Preliminary Injunction Order], as the LEGO Group suggests.” Reply in Further Support of Emergency Mot. for Contempt at 5, ECF No. 128. The court concludes that some relief, but not in

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the form of the relief requested by the plaintiffs, is appropriate.  

Ordinarily, the court would presume that finding a party in contempt of a court order and requiring it to pay attorneys’ fees and costs would be sufficient to ensure compliance with that court order going forward, particularly where that party is being advised by counsel. As was the case with the Preliminary Injunction Order, the court would usually conclude that it is sufficient for the opposing parties and the court to receive a sworn statement from an authorized representative of that party representing that the party is in compliance with the court order. For several reasons, the court concludes that the plaintiffs should not be limited to relying on such a declaration at this point, and that it is not prudent for the court to do so either. 

First, this is the third instance in which the plaintiffs have had to address infringement by ZURU, Inc. In August 2017, ZURU, Inc., in response to a letter from counsel for the plaintiffs complaining about infringement, agreed, inter alia, that it would “remove the phrase ‘Zuru Mayka Lego Tape’ or any other combination that may suggest our tape comes from LEGO.” Mot. for TRO and Prelim. Inj., Ex. 8, ECF No. 7-10. The plaintiffs filed a copy of the letter from the defendant

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documenting this incident in support of their motion for a temporary restraining order. 

Second, just prior to the plaintiffs filing this lawsuit, in-house counsel for ZURU, Inc. wrote to the plaintiffs’ counsel stating, “I can confirm that we will recall product currently with Walmart, and that we have started to action that today.” Mot. for TRO and Prelim Inj., Ex. 11, ECF No. 7-13. However, during her testimony on October 30, 2019, both on direct and during cross-examination, Hargus made it clear that this representation by ZURU’s counsel was incorrect. Hargus testified that there was no conversation with Walmart until after the court issued the temporary restraining order. See Mot. for Contempt Hr’g Tr. 12:12-15; 27:23-24; 29:3-10. 

Third, testimony by Hargus on October 30, 2019 also shows that ZURU, Inc. was in violation of the temporary restraining order with respect to the packaging for its Mayka Toy Block Tape during the entire time the temporary restraining order was in effect. On direct, Hargus testified: “So the Mayka products were not originally part of the first process in the latter part of last year to the earlier part of this year. But in July, there was an update to the process. We were asked to pull our . . . Mayka line, which contains many SKUs, many items. Those were then pulled on August 1.” Id. at 20:23-21:3. Hargus confirmed this fact on cross-examination: 

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Q. When did you first ask Walmart.com to take images of Mayka tape infringing products, the ones that had figurines on it, in this process?

A.  I think it was midpoint July.  

Id. at 40:6-9. 

     Fourth, on April 11, 2019, counsel for ZURU, Inc. wrote to counsel for the plaintiffs in response to concerns expressed by the plaintiffs’ counsel about ZURU, Inc.’s “(1) display or otherwise offer for sale of Infringing Products, including figurines/images that are substantially similar to the Minifigure Copyrights or likely to be confused with the

Minifigure Trademarks [and] (2) active solicitation of customers by encouraging general inquiries related to said Infringing Products.” Pls.’ Contempt Hr’g Ex. 1. Counsel for ZURU, Inc. stated, inter alia, that “ZURU has not made any ‘offer for sale’ or ‘active solicitation’ of its MAX Figures.” Id. Hargus’s testimony shows that this representation by ZURU, Inc.’s counsel was incorrect. Hargus testified: 

Q.  As of April 2019, it is not true that ZURU has not made any offer for sale or active solicitation of its MAX figures, because in fact you already had; isn’t that right?   

A.  Of our redesigned figures. 

Q.  Correct. 

A.  Correct. Redesigned figures. 

Id. at 36:8-14. 

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     Fifth, as discussed above, notwithstanding conclusory assertions by Hargus, there is no credible evidence that ZURU, Inc. ever took any steps reasonably calculated to ensure that the Redesigned Figurines were not in violation of the Preliminary Injunction Order. Rather, it simply decided to not disrupt its launch of the Redesigned Figurines regardless of the Preliminary Injunction Order and the analysis and the conclusions in the Ruling.

     Based on the foregoing, the court concludes that ZURU, Inc. has been persistent in its infringing activity, that it cannot be relied upon to keep a “safe distance” from infringing activity, and that the plaintiffs should not be required to simply rely on representations of ZURU, Inc. or its counsel that ZURU, Inc. is in compliance with the Preliminary Injunction

Order. The court further concludes that it is appropriate to require ZURU, Inc. to file a notice with the court, which shall include detailed information about any such figurine, at least 30 days prior to manufacturing, selling, offering for sale, distributing, displaying, or authorizing the sale of any figurine in its MAX Build More product line or in any replacement for the MAX Build More product line. This will allow sufficient time for the court to receive and act on any application for a temporary restraining order.

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     Such an approach avoids a situation where ZURU, Inc.

develops a new figurine the plaintiffs agree is non-infringing, but ZURU, Inc. nevertheless has to wait for approval from the court. It is also consistent with the standard set forth in Dole Fresh Fruit Co. v. United Banana Co., 821 F.2d 106 (2d Cir.

1987), with respect to use of civil contempt to ensure compliance with a court order, namely that, before imposing coercive sanctions the court must “explicitly consider (1) the character and magnitude of the harm threated by the continued contumacy; (2) the probable effectiveness of any suggested sanction in bringing about compliance; and (3) the contemnor’s financial resources and the consequent seriousness of the burden of the sanction upon him.” Id. at 110. Here, one, as a result of ZURU, Inc.’s demonstrated lack of commitment to keeping a “safe distance” from infringing conduct, the plaintiffs would be required to monitor the marketplace to determine whether ZURU, Inc. is manufacturing, selling, offering for sale, distributing, displaying, or authorizing the sale of yet another version of its MAX Build More figurines relying on theories that have already been rejected in the Ruling and in this order. Two, this approach should be effective in bringing about compliance because it will result in advance notice to the plaintiffs and an opportunity for them to address any infringing ZURU, Inc.

figurine before it is in the marketplace. Three, under the

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circumstances of this case, this approach does not result in any significant burden, financial or otherwise, upon ZURU, Inc., and any burden that does result is the consequence of its own actions.          

V. CONCLUSION    

For the reasons set forth above, The LEGO Group’s Emergency

Motion for Contempt (ECF No. 114) is hereby GRANTED. It is hereby ORDERED as follows: 

  1. ZURU, Inc. shall cease manufacturing, selling, offering for sale, distributing, displaying or authorizing the sale of Redesigned Figurines and Redesigned Images; 
  2. ZURU, Inc. shall take actions to ensure the removal of the Redesigned Figurines and Redesigned Images from the market, including recalling, to the extent it has the right to do so, all Redesigned Figurines and Redesigned Images from its retailer, Walmart, and any other distributor of its products in the United States, and filing on the docket a declaration detailing those actions no later than December 4, 2019;     
  3. During the pendency of this case and until further order of the court, ZURU, Inc. must file a notice with the court, which shall include detailed information about any such figurine, at least 30 days prior to manufacturing, selling, offering for sale, distributing, displaying, or authorizing

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the sale of any figurine in its MAX Build More product line or in any replacement for the MAX Build More product line; and

  • ZURU, Inc. shall pay the plaintiffs’ costs, expenses, and fees, including but not limited to reasonable attorneys’ fees, incurred by the plaintiffs in connection with their motion for contempt and ZURU, Inc.’s Motion for Order that Redesigned Figurines Do Not Violate the Preliminary

Injunction (ECF No. 112). The plaintiffs shall file their application for costs, expenses and fees within 30 days.  

It is so ordered.

Dated this 20th day of November 2019, at Hartford, Connecticut. 

                                     /s/ AWT                                                Alvin W. Thompson

                                               United States District Judge

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[1] The temporary restraining order did not include the word

“distributing.”

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