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The full case is here on this web site: Country Kids v. Sheen, 1996, 10th Cir Court of Appeals. Maker of dolls sued a former employee claiming she copyed her doll designs. Court of Appeals reversed preliminary injunction, saying that most aspects of the dolls were not copyrightable.

The Proper Test for Infringement After filtering out the unprotectable elements of a work, a court must determine whether "those protectable portions of the original work that have been copied constitute a substantial part of the original work--i.e. a matter that is significant in the plaintiff's [product]." Gates Rubber, 9 F.3d at 839. This is "primarily a qualitative rather than a purely quantitative analysis, . . . and must be performed on a case-by-case basis." Id. (citation omitted); see also 3 Nimmer13.03[A], at 13-54 ("even if the similar material is quantitatively small, if it is qualitatively important, the trier of fact may properly find substantial similarity."). Plaintiff contends that, in addition to erroneously filtering out protected elements, the district court incorrectly concluded that Plaintiff could not prevail unless Defendants' dolls were a "virtual copy" of Plaintiff's dolls. The traditional test for substantial similarity is "whether the accused work is so similar to the plaintiff's work that an ordinary reasonable person would conclude that the defendant unlawfully appropriated the plaintiff's protectible expression by taking material of substance and value." Atari, 672 F.2d at 614 (citation omitted). The essence of this test is 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." Peter Pan Fabrics, 274 F.2d at 489. The touchstone of the analysis is the "overall similarities rather than the minute differences between the two works." Atari, 672 F.2d at 618. In this context, we believe the "ordinary observer" test is an appropriate method for the court to use in its comparison analysis. See, e.g., Concrete Mach. Co., 843 F.2d at 609 (after establishing copying of protected aspects, "the trier of fact can then assess pursuant to the 'ordinary observer' test whether there is substantial similarity between the protected expression and the accused work"); Atari, 672 F.2d at 614 ("the ordinary observer test, in application, must take into account that the copyright laws preclude appropriation of only those elements of the work that are protected by the copyright"). Although the district court invoked the ordinary observer test, it does not appear that this test was correctly applied. At one point in its oral ruling the district court stated that "Defendants would infringe only by copying these appliques with such detail and particularity that an ordinary observer would . . . confuse a particular Carousel doll with one of the very Crayon dolls shown in Plaintiff's Exhibits One and Two." Aplt. App. 183-84. Later in its oral ruling, it ultimately concluded that an ordinary observer "would not conclude that any current doll in Defendants' production is a virtual copy of any given, particular doll [manufactured by Plaintiff]." Aplt. App. 184 (emphasis added). However, a finding of substantial similarity does not require that an infringing work be a "virtual copy" of a protected one. Nor is the sine qua non of substantial similarity whether an ordinary observer would "confuse" the two works in their entirety. Rather, as stated above, the test is whether the accused work is sufficiently similar that an ordinary observer would conclude that the defendant unlawfully appropriated the plaintiff's protectable expression by taking material of substance and value. Atari, 672 F.2d at 614; see also Concrete Mach. Co., 843 F.2d at 607; Educational Testing Servs. v. Katzman, 793 F.2d 533, 541 (3d Cir. 1986)(quoting Atari, 672 F.2d at 614). We therefore remand this case to the district court for a comparison between those features of Plaintiff's dolls which it finds protectable and Defendants' dolls under the appropriate substantial similarity test.

If copying is established then the second step--that of showing unlawful appropriation--is reached. See Walker, 784 F.2d at 51. This test for illicit copying to prove infringement of another's copyright demands that the similarities relate to protectible material; the test asks 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." Peter Pan Fabrics, Inc., 274 F.2d at 489; see Walker, 784 F.2d at 51. Of course, the ordinary observer would compare the finished product that the fabric designs were intended to grace (women's dresses), and would be inclined to view the entire dress--consisting of protectible and unprotectible elements--as one whole. Here, since only some of the design enjoys copyright protection, the observer's inspection must be more discerning.