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Schrock v. Learning Curve Int'l, Inc. - 586 F.3d 513 (7th Cir. 2009)


The Gracen standard embodies the following general principles: (1) the originality requirement for derivative works is not more demanding than the originality requirement for other works; and (2) the key inquiry is whether there is sufficient nontrivial expressive variation in the derivative work to make it distinguishable from the underlying work in some meaningful way. This focus on the presence of nontrivial distinguishable variation adequately captures the concerns articulated in Gracen without unduly narrowing the copyrightability of derivative works. The copyright in a derivative work is thin, extending only to the incremental original expression contributed by the author of the derivative work.


The licensee hired Schrock, a photographer, to take pictures of toys modeled after copyrighted train characters, which it used for advertising and packaging. After the licensee stopped giving the photographer work, Schrock registered his photos for copyright protection and sued the licensee and copyright owner. Applying the Gracen standard, the district court held that the photographer held no copyright in the photos as derivative works because he needed the licensee's permission to copyright them. Schrock appealed.


Does a copyright from a derivative work arise by operation of law?




Assuming arguendo that the photos were derivative works under 17 U.S.C.S. § 103(b), the United States Court of Appeals for the Seventh Circuit clarified that, under the Gracen standard, the photographer did not need authorization from the licensee to copyright the photos as long as he was authorized -- as he was -- to make the photos in the first place. The default rule was that a copyright in a derivative work arose by operation of law -- not through authority from the owner of the copyright in the underlying work. Schrock's photographs do not fall into the narrow category of photographs that can be classified as "slavish copies," lacking any independently created expression. To be sure, the photographs are accurate depictions of the three-dimensional "Thomas & Friends" toys, but Schrock's artistic and technical choices combine to create a two-dimensional image that is subtly but nonetheless sufficiently his own.  This is confirmed by Schrock's deposition testimony describing his creative process in depicting the toys. However, a remand was necessary to determine whether the parties had contractually agreed to alter the default rule. The court reversed and remanded.

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