Requiring Explicit “More Discerning Observer” Analysis Before Extending Preliminary Injunctions to Redesigned Products

Comprehensive Commentary on Lego A/S v. Zuru Inc., United States Court of Appeals for the Second Circuit (2025)

I. Introduction

Lego A/S v. Zuru Inc. is the latest skirmish in a long-running intellectual-property battle between Denmark’s iconic toy-maker, Lego, and New Zealand-based Zuru over small plastic figurines. Since 2018 Lego has sought to enjoin Zuru from marketing toy figures that allegedly copy Lego’s famous “Minifigure.” The litigation has already generated a temporary restraining order, a preliminary injunction, multiple redesigns by Zuru (“First-,” “Second-,” and now “Third-Generation” figurines), and an earlier trip to the Federal Circuit. The present appeal reaches the Second Circuit because Lego abandoned its design-patent claim, leaving only copyright and trademark causes of action.

The key question is procedural but powerful: May a district court summarily declare that an existing injunction also covers a newly-redesigned product, without making new substantial-similarity or likelihood-of-confusion findings on the record? The Second Circuit answers “no.” Although the panel ultimately remands rather than reverses, it articulates a clear rule that district courts must (i) articulate their reasoning, and (ii) apply the “more discerning observer” test when functional or unprotectable elements pervade the copyrighted work. The decision therefore provides important guidance on how preliminary injunctions should be enforced against alleged “work-arounds” or redesigns.

II. Summary of the Judgment

Jurisdiction. The court first confirms appellate jurisdiction under 28 U.S.C. § 1292(a)(1) because the district court’s order effectively modified—rather than merely interpreted—the earlier injunction.
Record Deficiency. The district court’s terse statement that “The Proposed Figurines are subject to the Preliminary Injunction Order” lacks any articulated reasoning. Without findings, the Second Circuit cannot determine whether the district court applied correct legal standards.
Remand Directive. Invoking United States v. Jacobson, the panel remands with instructions that the district court (a) perform a fresh substantial-similarity analysis under the “more discerning observer” test, (b) segregate protectable from unprotectable elements, and (c) conduct a full trademark likelihood-of-confusion analysis as well.
No Ruling on Merits. The panel expresses no view on whether Zuru’s Third-Generation figurines actually infringe; it merely demands a procedurally sound analysis before the injunction can be extended.

III. Analysis

A. Precedents Cited

The opinion weaves together a number of Second Circuit and Supreme Court authorities, some of which are highlighted below.

JLM Couture v. Gutman (2024) – Distinguishes between orders that interpret an injunction (not appealable) and those that modify it (appealable).
In re Tronox Inc. (2017) – Provides the standard of de novo review when determining whether a lower-court order modifies an injunction; also stresses heightened scrutiny when the appealed language is “tied to a term defined by law.”
Peter F. Gaito Architecture v. Simone (2010) – Articulates the two-step copyright infringement analysis and importance of comparing defendant’s work with protectable expression in plaintiff’s work.
Zalewski v. Cicero Builder (2014), Tufenkian v. Einstein Moomjy (2003), and Boisson v. Banian (2001) – Establish the “more discerning observer” test for works that combine protectable and unprotectable elements.
Feist v. Rural Telephone (1991) and Mattel v. Azrak-Hamway (1983) – Frame the core idea/expression dichotomy and caution against granting monopoly over abstract ideas.
Vans v. MSCHF (2023) – Supplies an updated catalog of factors assessing likelihood of confusion in trademark cases.

B. The Court’s Legal Reasoning

Appealability. The panel reasoned that the lower court’s single-sentence order “enjoining the manufacture and sale” of a new product could not be read as a mere clarification. By purporting to extend the injunction’s scope to a non-adjudicated item, the order necessarily modified the injunction and is therefore appealable.
Need for Findings. Because the terms “substantial similarity” (copyright) and “likelihood of confusion” (trademark) are legal conclusions reached after factual analysis, the appellate court cannot defer to an unexplained statement. Without findings the order fails both Rule 65(d) (injunctions must state reasons) and basic appellate review standards.
Proper Standard – “More Discerning Observer.” The Minifigure combines functional (snap-fit legs, head stud) and aesthetic (smile, torso design) elements. When functional elements are present, the less demanding “ordinary observer” test risks granting protection over ideas or utilities. Consequently, the district court must “filter out” unprotectable traits and compare only the protected expression.
Comparison Baseline. The court warns against comparing Zuru’s third-generation product to Zuru’s second-generation product; the correct baseline is Lego’s original work. This nuance prevents cumulative drift in which each redesign is measured only against its immediate predecessor, steadily expanding injunctive coverage beyond the scope of the original rights.

C. Potential Impact of the Decision

Procedural Discipline. District courts in the Second Circuit must now build a detailed record—including visual comparisons—before applying an existing injunction to a redesigned product. Summary pronouncements risk remand or reversal.
Heightened Scrutiny for Hybrid Works. Any copyrighted article that blends utilitarian and aesthetic components (toys, furniture, fashion, consumer products) will presumptively trigger the more discerning observer test. Plaintiffs cannot rely on the broader ordinary-observer shortcut.
Strategic Redesigns. Defendants seeking to “design-around” an injunction gain a clearer path: show that differences relate to functional/unprotectable elements and demand a full rights-filtering analysis. Plaintiffs, conversely, must marshal evidence that similarities lie in protectable expression.
Trademark-Copyright Interaction. By insisting on separate analyses for likelihood of confusion and substantial similarity, the judgment underscores that success on one claim does not mechanically carry the other.
Non-Patent Protection Limits. The opinion reiterates that functional features are the domain of patent—not copyright—law. Companies that forgo or lose patent protection must adjust expectations when relying on copyright or trade dress.

IV. Complex Concepts Simplified

Preliminary Injunction: A court order issued early in litigation to prevent harm until a full trial can occur. It is not permanent but often shapes the parties’ leverage.
Substantial Similarity: In copyright, the degree of resemblance that makes copying actionable. It asks whether defendant appropriated protected expression, not merely ideas or commonplace features.
Ordinary Observer vs. More Discerning Observer Test: The ordinary observer test gauges the impression on an average layperson. The more discerning observer test— applied when unprotectable elements dominate—requires the trier of fact to filter out those elements before comparing works.
Likelihood of Confusion: The trademark inquiry into whether consumers will likely mistake the source of goods. Factors include strength of the mark, similarity of marks, proximity of products, evidence of actual confusion, etc.
Jacobson Remand: An appellate device allowing the lower court to make additional findings while retaining appellate jurisdiction, expediting ultimate resolution.
Idea/Expression Dichotomy: Fundamental copyright doctrine denying protection for general ideas while protecting the particular expression of those ideas.

V. Conclusion

Lego A/S v. Zuru Inc. may technically be a “summary order” without precedential effect, but it sends a clear, well-reasoned message. When a plaintiff invokes an existing injunction against a redesigned product, the district court must articulate—on the record—how the new product meets the operative legal standards. Specifically, where functional or otherwise unprotectable elements are present, the more discerning observer test is mandatory. Failure to comply invites remand and delays enforcement.

The decision reinforces the boundary between copyright, trademark, and patent protection, ensuring that courts do not unwittingly grant monopolies over ideas or functional attributes. Future litigants in design-around battles, whether in toys, apparel, or consumer electronics, should expect closer scrutiny and must prepare detailed evidentiary showings tailored to protectable expression. Ultimately, the ruling strengthens procedural fairness while sharpening substantive IP doctrine in the Second Circuit.

Requiring Explicit “More Discerning Observer” Analysis Before Extending Preliminary Injunctions to Redesigned Products – Commentary on Lego A/S v. Zuru Inc. (2d Cir. 2025)