Schrock, Daniel v. Learning Curve International, Inc., 08-1296 (7th Cir. 2009)

HIT Entertainment granted Learning Curve a license, which was not part of the record, to make “Thomas & Friends” train toys.  Learning Curve hired a photographer to take promotional shots of the toys. After four years, the relationship between Learning Curve and the photographer soured. Learning Curve continued to distribute the promotional shots in advertisement and on the internet. The photographer registered the promotional photos and brought suit against Learning Curve and HIT alleging infringement.

The District Court granted summary judgment for Learning Curve finding that the images were a derivative work of the toys, and that the photographer needed both [1] permission from Learning Curve to make the photographs; and [2] permission from Learning Curve to have a copyright in the derivative works. Since Learning Curve never explicitly granted the photographer the right to make a derivative work, said the District Court, the photographer never had a copyright in the photos.

The Seventh Circuit reversed finding that, assuming there was no agreement to the contrary,  the photographer only needed permission to take the pictures, not permission to obtain a copyright in the works. The Seventh Circuit relied on their holding in See Liu v. Price Waterhouse LLP, 302 F.3d 749, 755 (7th Cir. 2002) (Kanne, J., writing), as opposed to language from Gracen v. Bradford Exchange, 698 F.2d 300 (7th Cir. 1983) (Posner, J., writing), which suggesting that explicit permission was required for an author to have a copyright in a derivative work, not just permission to make the work.

Originality and derivative works

The Seventh Circuit, assuming that the photos were derivative works for the purposes of the opinion, found that the promotional photos “possessed sufficient incremental original expression to qualify for copyright.” The Seventh Circuit opined that Gracen’s statement that “a derivative work must be substantially different from the underlying work to be copyrightable,” 698 F.2d at 305, “should not be understood to require a heightened standard of originality for copyright in a derivative work.” The Seventh Circuit instead looked to Buckew and found that “the only ‘originality’ required for [a] new work to be copyrightable . . . is enough expressive variation from public-domain or other existing works to enable the new work to be readily distinguished from its predecessors.” Bucklew v. Hawkins, Ash, Baptie & Co., LLP, 329 F.3d 923, 929 (7th Cir. 2003) (Ponser, J., writing).

Remand

The Seventh Circuit remanded the case for further findings on whether the photographer granted HIT and Learning Curve an oral non-exclusive license in the photos; and to see whether Learning Curve had the power to authorize the photographer to make the photos, under the licensing agreement between HIT and Learning Curve.

(H/t Rebecca Tushnet.)