The Seventh Circuit case, Daniel P. Schrock v. Learning Curve International, RC2 Brands, Inc, and HIT Entertainment, concerned the popular “Thomas & Friends” train characters. HIT licensed the right to make toy figures of its train characters to defendant Learning Curve (now owned by defendant RC2 Corporation). Learning Curve then retained Schrock to take photographs of its toys, including those based upon the Thomas & Friends properties.
Schrock granted limited rights to Learning Curve to use his resulting photos of Learning Curve’s products. This arrangement continued on a regular basis for about four years. Schrock’s invoices, eventually totaling more than $400,000, were paid in full.
Learning Curve stopped giving work to Schrock in 2003, but continued to use some of Schrock’s photos in its printed advertising, packaging and on the internet. In 2004, the photographer registered his photographs with the Copyright Office and obtained copyright registration certificates in his name. He then brought his lawsuit for copyright infringement.
On defendants’ motion for summary judgment, the primary issue was whether Schrock’s photos, as derivative works of the actual toys, were sufficiently original to obtain copyright protection, and whether defendants’ consent was required for Schrock to register the photos with the Copyright Office.
The district court, focusing on the derivative issue, granted summary judgment and threw out the case.
The Copyright Act
A derivative work is defined in the Copyright Act as a:
“…work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgement, condensation, or any other form in which a work may be recast, transformed or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which as a whole represent an original work of authorship, is a ‘derivative work.’”
No Consent to Permit Copyright Registration Required
One of the exclusive rights of copyright is the right to create derivative works. Therefore, if Schrock did not have permission from the copyright owner of the toys to create his photos of the toys, his photographs may have infringed the underlying copyrights (“It is a copyright infringement to make or sell a derivative work without a license from the owner of the copyright in the underlying work.”). However, since the photos were created on assignment, Schrock had such consent, and he owned the copyright to his derivative images.
The appellate court determined that the district court’s opinion was erroneous in that it required Schrock, as the author of the derivative works, to get two consents from the owner of the underlying work. The first consent was to create the images, which consent was required because the copyright owner of the toys also controlled the right to make derivative works. However, the appellate court found that once this consent was given (it was on assignment), a second consent to copyright the images was not necessary because there is nothing in the Copyright Act which requires consent of an author of a derivative work to obtain such consent from the copyright owner of the underlying work. To the contrary, it explained, copyright protection, which begins at the moment of creation of original works of authorship, applies with equal force to derivative works.
The appellate court did note an exception to this default rule. That occurs when the parties, by contract, prohibit the derivative work owner from claiming copyright. In such event, assuming the evidence established a valid and binding contract, the contract terms would prevail because the owner of the copyright to the underlying work has the copyright to prepare derivative works. Therefore, the underlying work owner can limit or condition the rights granted.
Once the appellate court determined the legal standard, it reversed the decision, but since it could not determine, from the record on appeal, whether the defendants had contractually limited Schrock’s right to copyright his photos, the appellate panel remanded the case to the district court to determine what actually happened.
Amount of Required Creativity
The defendants had also argued that a derivative work is subject to a higher, more demanding standard of originality.
The appellate court also rejected this argument, pointing out that nothing in the Copyright Act suggested that derivative works are to be subject to a more exacting originality requirement than other works of authorship.
The key, said the appellate court, is whether there is sufficient non-trivial expressive variation in the derivative work to make it distinguishable from the underlying work in some meaningful way (the added and protective elements in a derivative work must be distinct from the underlying work since the derivative work owner can only protect these added elements). Since Schrock’s contribution consisted of the photographic elements of lighting, angle, perspective and the like, there was sufficient added elements to meet the “minimal originality” required. Therefore he could obtain copyright in his photos.
The defendants also argued that, because Schrock’s photos are “straightforward” product photos, they do nothing more than accurately portray the products. The appellate court rejected this argument as well, refusing to establish a categorical rule that all accurate product photos are uncopyrightable.
New York Court Decision
The Schrock court of appeals decision was cited with approval by the Eastern District of New York in the January 14, 2010 decision in Fragrancenet.com Inc. v. Fragrancex.com Inc. This case concerned allegations that defendant copied more than 900 copyrighted images from plaintiff’s website and posted them on defendant’s website. The court, citing the Seventh Circuit opinion in Schrock with approval, denied defendant’s motion to dismiss. It also rejected the argument that photos were not copyrightable because they were product shots serving the function of merely conveying information about the product sold on plaintiff’s website.
These decisions were very important to the photography community, and in particular, photographers who work on assignment with products. If the Chicago decision had not been reversed, the inability of photographers to register copyrights to derivative product photos would have also foreclosed their ability to sue for copyright infringement unless the client affirmatively granted such consent in writing. Thankfully, the appellate court correctly reversed the district court decision on the law, and together with the New York decision, clarified what may have been uncertainty in this area.
Accordingly, there no longer is any doubt in the Seventh and Second Circuit Courts of Appeal that photographers can continue to enforce their copyrights to product shots.
Attorney Joel L. Hecker lectures and writes extensively on issues of concern to the photography industry. His office is located at Russo & Burke, 600 Third Ave, New York NY 10016. Phone: 1 212 557-9600. E-mail: HeckerEsq[at]aol[dot]com.