 After Micro Star started to seek a declaratory judgment from the district court for free of copyright infringement from FormGen, FormGen countersued for a preliminary injunction to prevent further production and distribution of N/I.Building on the precedent established by "Lewis Galoob Toys, Inc. v. Nintendo of America, Inc.", 964 F.2d 965(9th Cir.1992), the district court ruled that N/I was not a derivative work, and hence the content itself did not violate FormGen's copyright.However, the district court found that N/I's packaging infringed FormGen's copyright on the D/N-3D characters, as it reproduced the art without licensing from FormGen.