Second Circuit Dismisses Zuru’s Appeal in LEGO Copyright/Trademark Case for Lack of Jurisdiction

The U.S. Court of Appeals for the Second Circuit on Tuesday dismissed an appeal from Zuru Inc. in its ongoing copyright and trademark dispute with the Lego group, finding that the court lacked appellate jurisdiction.

Lego A/S, Lego Systems, Inc., and Lego Juris A/S first brought claims against Zuru Inc. in 2019, alleging that Zuru’s “First-Generation” toy figurines infringed on the copyright and trademark rights of Lego’s Minifigure. The U.S. District Court for the District of Connecticut granted Lego’s motion for a preliminary injunction, which enjoined Zuru from manufacturing or selling the infringing First-Generation figurines and “any figurine or image that is substantially similar to the Minifigure Copyrights or likely to be confused with the Minifigure Trademarks.” The U.S. Court of Appeals for the Federal Circuit (CAFC) later affirmed the preliminary injunction.

Following the injunction, Zuru released its “Second-Generation” figurines, which the district court found to be in contempt of the preliminary injunction order. The court then modified the injunction to require Zuru to provide 30 days’ notice before manufacturing or selling any new figurines. In November 2023, Zuru filed such notice for its “Third-Generation” figurines, and the district court subsequently enjoined their manufacture and sale, finding them subject to the existing preliminary injunction. Zuru appealed that decision to the Second Circuit.

In a March 2025 decision, the Second Circuit remanded the case to the district court to “supplement the record by providing its assessment of whether the Third-Generation figurines are substantially similar to or likely to be confused with Lego’s Minifigure.” The Second Circuit also instructed the district court to apply the “more discerning observer test” in its substantial similarity analysis. On remand, the district court, in a detailed 29-page order, again concluded that the Third-Generation figurines fell within the scope of the preliminary injunction.

Zuru then appealed for a second time, arguing that the district court “erred as a matter of law in its assessments of similarity and confusion” and in doing so “necessarily modified the Preliminary Injunction.” Lego argued that the Second Circuit lacked appellate jurisdiction to hear the appeal.

The Second Circuit began by noting that, while it has jurisdiction over interlocutory orders that grant, modify, or dissolve injunctions, it lacks jurisdiction over orders that merely interpret or clarify an injunction’s terms. The court explained that if the Third-Generation figurines were substantially similar to or likely to be confused with Lego’s Minifigure, they would fall within the existing preliminary injunction order, and the court would lack jurisdiction over the appeal.

The district court had correctly identified the “more discerning observer test” as the proper legal standard. This test requires a court to “attempt to extract the unprotectable elements from [its] consideration and ask whether the protectable elements, standing alone, are substantially similar.” The court identified the unprotectable elements of the Lego Minifigure as the stud projection on the head, the inside radius of the c-shaped hands, and the holes at the base of the feet and back of the legs. After considering expert testimony from both sides, the district court sided with Lego’s expert, finding her opinion to be properly supported and Zuru’s expert’s analysis to be “deficient.” The Second Circuit found “no basis to disturb that determination.”

The Second Circuit also found that the district court’s conclusion was supported by a second, independent ground of the likelihood of confusion. The court applied the eight-factor test from Polaroid Corp. v. Polarad Electronics Corp. to assess the “likelihood of confusion.” The district court found that several factors weighed in Lego’s favor and concluded that Lego’s trademark is strong, having spent over $200 million on advertising and promotion between 1978 and 2015 and selling over 120 million Minifigures. The court also found a “high degree of similarity” between the competing figurines and that the products compete in the same market. Furthermore, Zuru acted in bad faith, citing a “truncated redesign process” and a “demonstrated lack of commitment to keeping a ‘safe distance’ from infringing conduct.”

While the Second Circuit noted that the “actual confusion” factor should be considered neutral, as Lego had moved to enjoin the sale of the Third-Generation figurines before any evidence of actual confusion could emerge, it ultimately agreed with the district court’s overall conclusion. The Second Circuit stated, “we have reviewed the district court’s thorough and careful consideration of the Polaroid factors, and we agree with its overall conclusion that, on this record, the Third-Generation figurines are likely to be confused with the Lego Minifigure.”

Since the district court correctly determined that Zuru’s Third-Generation figurines were both substantially similar to and likely to be confused with Lego’s Minifigure, the Second Circuit concluded that the figurines fell within the scope of the existing preliminary injunction order. The order explained that this determination provided an independent ground for depriving the court of appellate jurisdiction, and accordingly dismissed the appeal for lack of appellate jurisdiction.