Opinion ID: 745282
Heading Depth: 3
Heading Rank: 2

Heading: Copyrights in Derivative Works

Text: 35 Having discussed this initial threshold issue, we will now evaluate whether ERG's costumes are actually copyrightable. It is undisputed that ERG's costumes are based upon two-dimensional characters that are copyrighted and owned by the purchasers of the costumes. The Copyright Act defines a derivative work as: 36 [A] work based upon one or more pre-existing works, such as a[n] ... art reproduction ... 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. 37 17 U.S.C. § 101. Given this definition, it is clear that ERG's costumes are derivative works for purposes of the Copyright Act. 6 38 That ERG's costumes are derivative works is not a bar to their copyrightability, however. Section 103(a) of the Copyright Act explicitly provides that the subject matter of copyright, as specified by Section 102, includes derivative works. 17 U.S.C. § 103(a). Nevertheless, the copyright protection afforded to derivative works is more limited than it is for original works of authorship. Specifically, Section 103(b) provides that the copyright in a derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work. 17 U.S.C. § 103(b); see also Russell v. Price, 612 F.2d 1123, 1128 (9th Cir.1979). Accordingly, we will now examine whether ERG's costumes are copyrightable as derivative works. 39 We have not previously had occasion to provide much guidance with regard to the copyrightability of derivative works. See Moore Pub., Inc. v. Big Sky Marketing, Inc., 756 F.Supp. 1371, 1374 (D.Idaho 1990) (looking to cases from the Second Circuit and the Seventh Circuit for guidance on the standards to be employed in determining whether derivative works are copyrightable). Faced with this lack of guidance, the district court turned to the Second Circuit's decision in Durham Industries, Inc. v. Tomy Corp., 630 F.2d 905 (2d Cir.1980), as a model for determining whether ERG's derivative works were copyrightable. See Entertainment Research Group, 853 F.Supp. at 321-22. ERG argues that the district court should not have relied on that test since the Durham test is not the controlling law of the Ninth Circuit and since the Durham analysis is premised on an erroneous interpretation of copyright law. 40 Instead of the Durham test, ERG contends that the district court should have applied the test created by a district court in the Central District of California. Doran v. Sunset House Distributing Corp., 197 F.Supp. 940 (S.D.Cal.1961), aff'd, Sunset House Distributing Corp. v. Doran, 304 F.2d 251 (9th Cir.1962). In Doran, we affirmed the district court's decision that a three-dimensional, inflatable representation of Santa Claus was original and copyrightable. The district court in that case reached its decision based on its belief that the test of copyrightability must be the form which the author has used to express the figure, idea, or theme. Id. at 944. In other words, under the Doran district court's test, if the form of the derivative work and the form of the underlying work--three-dimensional, two-dimensional, plastic, etc.--are sufficiently different, then the derivative work is original enough to be copyrightable. 41 ERG argues that the Doran test should apply to the instant case since it has never been overturned and is, therefore, the controlling law in this Circuit on the copyrightability of three-dimensional representations of preexisting two-dimensional works. We disagree. In the first place, the Doran test is inapplicable to the instant circumstances since Doran involved the copyrightability of a derivative work where the preexisting work was taken from the public domain and not copyrighted itself. Here, on the other hand, ERG's costumes were based on preexisting works that were copyrighted and owned by the ultimate purchasers. This difference is critical because in deciding whether to grant copyright protection to a derivative work, courts must be concerned about the impact such a derivative copyright will have on the copyright privileges and rights of the owner of the underlying work. See 17 U.S.C. § 103(b). Indeed, the body of law regarding derivative copyrights is designed to strike a balance between the holder of a copyright in the underlying work and the creator of a work that is made by copying that underlying work. See, e.g., Durham, 630 F.2d at 910-11. Accordingly, because the Doran test completely fails to take into account the rights of the holder of the copyright for the underlying work, the Doran test should not be applied to determine the copyrightability of a derivative work that is based on a preexisting work that is itself copyrighted. 42 In addition, it is not clear that we ever adopted the Doran test since our opinion affirming the district court's decision really focused on the similarity between the Santa Claus products at issue, rather than on the different forms of the products. See Melville B. Nimmer, Nimmer on Copyright, § 2.08[C] at 2-111, 2-112 n. 136 (commenting that the Ninth Circuit apparently relied upon the originality inherent in the graphic elements of the plaintiff's Santa Claus, rather than on the grounds for originality stated by the district court.). In this respect, it is notable that although we quoted Doran in Runge v. Lee, 441 F.2d 579, 581 (9th Cir.1971) , for the standard for originality in copyrights, the portion of Doran that was quoted had nothing to do with the district's court's language indicating that a change in form is sufficient for originality purposes. Id. 43 In direct contrast, we are satisfied that the test developed by the Second Circuit in Durham is the proper approach for us to apply in the instant circumstances to determine whether ERG's costumes are copyrightable as derivative works. This test contains two prongs: 44 First, to support a copyright the original aspects of a derivative work must be more than trivial. Second, the original aspects of a derivative work must reflect the degree to which it relies on preexisting material and must not in any way affect the scope of any copyright protection in that preexisting material. 45 Durham, 630 F.2d at 909. 46 The first prong of the Durham test is in harmony with numerous decisions of this Circuit which establish that the original aspects of a work must be more than trivial to warrant copyright protection. See, e.g., North Coast, 972 F.2d at 1033 (stating that [o]riginality is the indispensable prerequisite for copyrightability); Kamar Int'l, Inc. v. Russ Berrie & Co., 657 F.2d 1059, 1061 (9th Cir.1981) (holding that [o]riginality is the sine qua non of copyrightability). 47 ERG takes issue with the second prong of the Durham test, arguing that it embodies an erroneous interpretation of the copyright laws. We are not persuaded by this argument, as we believe that this prong is completely consistent with Section 103(b) of the Copyright Act and is, in fact, necessary because of Section 103(b). Section 103(b) provides that: 48 The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material. 49 17 U.S.C. § 103(b). Following the direct language of § 103(b), the second prong of the Durham test is designed to ensure that copyright protection is not given to a derivative work if doing so would necessarily affect the scope of any copyright protection in the preexisting material. 50 Viewed from another perspective, this second prong of the Durham test is necessary to ensure that copyright protection is not given to derivative works whose originality is merely trivial. Section 103(b) mandates that the copyright protection for derivative works not affect the scope of any copyright protection in the underlying work. Copyright protection for underlying works would be affected--and, thus, § 103(b) would be violated--if derivative works without adequate originality were given copyright protection. See, e.g., Gracen, 698 F.2d at 304-05; Durham, 630 F.2d at 910-11; Moore Pub., 756 F.Supp. at 1374. This is so because if copyright protection were given to derivative works that are virtually identical to the underlying works, then the owner of the underlying copyrighted work would effectively be prevented from permitting others to copy her work since the original derivative copyright holder would have a de facto monopoly due to her considerable power to interfere with the creation of subsequent derivative works from the same underlying work. Gracen, 698 F.2d at 305; see also Durham, 630 F.2d at 911. This conclusion finds support in our decisions in the somewhat analogous context where we have decided not to grant copyright protection to an artist's presentation of a song--even under an unfair competition theory--where doing so would undermine the rights of the song's copyright holder by exposing her licensees to potential litigation. See Sinatra v. Goodyear Tire & Rubber, 435 F.2d 711, 718 (9th Cir.1970). 51 Our belief that the Durham test is the proper approach is furthered by the fact that the principles underlying this test have been followed and approved of by many other courts. See, e.g., Gracen, 698 F.2d at 304-05; EFS Marketing, Inc. v. Russ Berrie & Co., Inc., 836 F.Supp. 128, 131, 133 (S.D.N.Y.1993); Moore Pub., 756 F.Supp. at 1374; M.S.R. Imports, Inc. v. R.E. Greenspan Co., Inc., 1983 WL 1778,  17 n. 4 (E.D.Pa.1983).