We reverse. We assume for purposes of this decision
that the district court correctly classified Schrock’s
photographs as derivative works. It does not follow,
however, that Schrock needed authorization from Learning
Curve to copyright the photos. As long as he was
authorized to make the photos (he was), he owned the
copyright in the photos to the extent of their incremental
original expression. In requiring permission to make and
permission to copyright the photos, the district court relied
on language in Gracen v. Bradford Exchange, 698 F.2d 300
(7th Cir. 1983), suggesting that both are required for
copyright in a derivative work. We have more recently explained, however, that copyright in a derivative work
arises by operation of law—not through authority from
the owner of the copyright in the underlying work—
although the parties may alter this default rule by
agreement. See Liu v. Price Waterhouse LLP, 302 F.3d 749,
755 (7th Cir. 2002). Schrock created the photos with
permission and therefore owned the copyright to the
photos provided they satisfied the other requirements for
copyright and the parties did not contract around the
default rule.
We also take this opportunity to clarify another aspect
of Gracen that is prone to misapplication. Gracen said
that “a derivative work must be substantially different
from the underlying work to be copyrightable.” 698 F.2d
at 305. This statement should not be understood to
require a heightened standard of originality for copyright
in a derivative work. We have more recently
explained 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). Here, Schrock’s photos
of Learning Curve’s “Thomas & Friends” toys possessed
sufficient incremental original expression to qualify for
copyright.
But the record doesn’t tell us enough about the agreements
between the parties for us to determine whether
they agreed to alter the default rule regarding copyright
or whether Learning Curve had an implied license to continue to use Schrock’s photos. Whether Schrock could
copyright his photographs and maintain an infringement
action against the defendants depends on the contractual
understandings between Schrock, Learning Curve,
and HIT. Accordingly, we remand to the district court
for further proceedings consistent with this opinion.
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