Court Opinion

ID: 3003688
Source: CourtListenerOpinion
Date Created: 2015-09-24 22:30:34.942407+00
Date Added: 2024-06-11T11:45:53.969366
License: Public Domain

In the

United States Court of Appeals
               For the Seventh Circuit

No. 08-1296

D ANIEL P. S CHROCK, d/b/a
D AN S CHROCK P HOTOGRAPHY,
                                                  Plaintiff-Appellant,
                                  v.

L EARNING C URVE INTERNATIONAL, INC.,
RC2 B RANDS, INC., and HIT E NTERTAINMENT,

                                               Defendants-Appellees.

             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
               No. 04 C 6927—Milton I. Shadur, Judge.

   A RGUED S EPTEMBER 9, 2008—D ECIDED N OVEMBER 5, 2009

 Before F LAUM, W ILLIAMS, and SYKES, Circuit Judges.
  S YKES, Circuit Judge. HIT Entertainment (“HIT”) owns
the copyright to the popular “Thomas & Friends” train
characters, and it licensed Learning Curve International
(“Learning Curve”) to make toy figures of its characters.
Learning Curve in turn hired Daniel Schrock, a
professional photographer, to take pictures of the toys for
2                                               No. 08-1296

promotional materials. Learning Curve used Schrock’s
services on a regular basis for about four years and there-
after continued to use some of his photographs in its
advertising and on product packaging. After Learning
Curve stopped giving him work, Schrock registered his
photos for copyright protection and sued Learning Curve
and HIT for infringement.
  The district court granted summary judgment for the
defendants, holding that Schrock has no copyright in the
photos. The court classified the photos as “derivative
works” under the Copyright Act—derivative, that is, of
the “Thomas & Friends” characters, for which HIT owns
the copyright—and held that Schrock needed permission
from Learning Curve (HIT’s licensee) not only to make
the photographs but also to copyright them. Because
Schrock had permission to make but not permission to
copyright the photos, the court dismissed his claim for
copyright infringement.
  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
No. 08-1296                                              3

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 copy-
right in a derivative work. We have more recently
explained that “the only ‘originality’ required for [a] new
work to be copyrightable . . . is enough expressive varia-
tion 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 agree-
ments 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
4                                               No. 08-1296

continue to use Schrock’s photos. Whether Schrock could
copyright his photographs and maintain an infringe-
ment action against the defendants depends on the con-
tractual understandings between Schrock, Learning Curve,
and HIT. Accordingly, we remand to the district court
for further proceedings consistent with this opinion.

                      I. Background
   HIT is the owner of the copyright in the “Thomas &
Friends” properties, and Learning Curve 1 is a
producer and distributor of children’s toys. HIT and
Learning Curve entered into a licensing agreement
granting Learning Curve a license to create and market
toys based on HIT’s characters. HIT and Learning Curve
maintain (through an affidavit of HIT’s vice-president
of licensing) that HIT retained all intellectual-property
rights in the works produced under the license. The
licensing agreement, however, is not in the record.
  In 1999 Learning Curve retained Daniel Schrock to take
product photographs of its toys, including those based on
HIT’s characters, for use in promotional materials. On
numerous occasions during the next four years, Schrock
photographed several lines of Learning Curve’s toys,
including many of the “Thomas & Friends” toy trains,
related figures, and train-set accessories. (We have

1
  RC2 Corporation acquired Learning Curve in early 2003. For
simplicity we refer to Learning Curve, RC2 Corporation,
and their affiliates collectively as “Learning Curve.”
No. 08-1296                                              5

attached two of the photos as examples, although they
are extremely poor copies because the originals are in
color.) Schrock invoiced Learning Curve for this work,
and some of the invoices included “usage restrictions”
purporting to limit Learning Curve’s use of his
photographs to two years. Learning Curve paid the
invoices in full—in total more than $400,000.
  Learning Curve stopped using Schrock’s photography
services in mid-2003 but continued to use some of his
photos in its printed advertising, on packaging, and on
the internet. In 2004 Schrock registered his photos for
copyright protection and sued HIT and Learning Curve
for infringement; he also alleged several state-law claims.
HIT and Learning Curve moved for summary judgment,
arguing primarily that Schrock’s photos were derivative
works and not sufficiently original to claim copyright
protection, and that neither HIT nor Learning Curve
ever authorized Schrock to copyright the photos. They
argued in the alternative that Schrock granted them
an unlimited oral license to use the photos.
  The district court granted summary judgment for the
defendants. The judge began by noting the long tradition
of recognizing copyright protection in photographs
but said he would nonetheless “eschew” the question
whether Schrock’s photographs were sufficiently orig-
inal to copyright. The judge focused instead on whether
the photos were derivative works under the Copyright
Act and concluded that they were. Then, following
language in Gracen, the judge held that Learning Curve’s
permission to make the photos was not enough to
trigger Schrock’s copyright in them; the judge said Schrock
6                                            No. 08-1296

must also have Learning Curve’s permission to copyright
the photos. Schrock did not have that permission, so the
judge concluded that Schrock had no copyright in
the photos and dismissed his claim for copyright
infringement.2 Schrock appealed.

                    II. Discussion
  Schrock argues that the district judge mistakenly
classified his photos as derivative works and misread or
misapplied Gracen. He contends that his photos are not
derivative works, and even if they are, his copyright is
valid and enforceable because he had permission from
Learning Curve to photograph the underlying copy-
righted works and his photos contained sufficient
incremental original expression to qualify for copyright.
HIT and Learning Curve defend the district court’s deter-
mination that the photos are derivative works and argue
that the court properly read Gracen to require permission
to copyright as well as permission to make the derivative
works. Alternatively, they maintain that Schrock’s
photographs contain insufficient originality to be copy-
rightable and that copyright protection is barred under
the scènes à faire or merger doctrines. Finally, the
defendants ask us to affirm on the independent ground
that Schrock orally granted them an unlimited license to
use his works.

2
  Having dismissed the federal-copyright claim, the court
relinquished jurisdiction over the state-law claims.
No. 08-1296                                                   7

  As a general matter, a plaintiff asserting copyright
infringement must prove: “(1) ownership of a valid
copyright, and (2) copying of constituent elements of the
work that are original.” Feist Publ’ns, Inc. v. Rural Tel. Serv.
Co., 499 U.S. 340, 361 (1991). There is no dispute here about
copying; Learning Curve used Schrock’s photos in its
promotional materials. The focus instead is on the
validity of Schrock’s asserted copyright in the photos. The
Copyright Act provides that “[c]opyright protection
subsists . . . in original works of authorship fixed in any
tangible medium of expression . . . from which they can
be perceived, reproduced, or otherwise communicated,
either directly or with the aid of a machine or device.”
17 U.S.C. § 102(a). In this circuit, copyrightability is an
issue of law for the court. Gaiman v. McFarlane, 360
F.3d 644, 648-49 (7th Cir. 2004).
  Much of the briefing on appeal—and most of the
district court’s analysis—concerned the classification of
the photos as derivative works. A “derivative work” is:
    [A] work based upon one or more preexisting works,
    such as a translation, musical arrangement,
    dramatization, fictionalization, motion picture version,
    sound recording, art reproduction, abridgment,
    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”.
17 U.S.C. § 101. The Copyright Act specifically grants the
author of a derivative work copyright protection in the
8                                               No. 08-1296

incremental original expression he contributes as long
as the derivative work does not infringe the underlying
work. See id. § 103(a), (b); see also Pickett v. Prince, 207
F.3d 402, 405 (7th Cir. 2000); Lee v. A.R.T. Co., 125 F.3d
580, 582 (7th Cir. 1997). The copyright in a derivative
work, however, “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).

A. Photographs as Derivative Works
  Whether photographs of a copyrighted work are
derivative works is the subject of deep disagreement
among courts and commentators alike. See 1 M ELVILLE B.
N IMMER & D AVID N IMMER, N IMMER ON C OPYRIGHT
§ 3.03[C][1], at 3-20.3 (Aug. 2009). The district court
held that Schrock’s photos came within the definition of
derivative works because they “recast, transformed, or
adapted” the three-dimensional toys into a different, two-
dimensional medium. For this conclusion the judge
relied in part on language in Gracen and in the Ninth
Circuit’s decision in Ets-Hokin v. Skyy Spirits, Inc., 225
F.3d 1068 (9th Cir. 2000), recognizing, however, that
neither decision directly decided the matter. Gracen did
not involve photographs at all, and although Ets-Hokin
did, the Ninth Circuit ultimately sidestepped the
derivative-works question and rested its decision on
other grounds. Id. at 1081.
  The judge also cited other decisions in this circuit that
appear to support the conclusion that photographs are
No. 08-1296                                                9

derivative works, but these, too (and again, as the judge
properly acknowledged), did not directly address the
question. Ty, Inc. v. Publications International Ltd., 292
F.3d 512, 519 (7th Cir. 2002), involved unauthorized
“Beanie Babies” collector’s guides that incorporated
photographs of the popular beanbag plush toys into the
text. We said there that “photographs of Beanie Babies
are derivative works from the copyrighted Beanie
Babies themselves,” but this statement was based entirely
on the parties’ concession that the photographs were
derivative works. Id. Saturday Evening Post Co. v.
Rumbleseat Press, Inc., 816 F.2d 1191 (7th Cir. 1987), made a
passing remark suggesting that photographs of Norman
Rockwell illustrations were derivative works, but that
was not an issue in the case, id. at 1201; the issue
instead was whether certain terms in a licensing agree-
ment (specifically, no-contest and arbitration clauses)
were enforceable, id. at 1193.
  We need not resolve the issue definitively here. The
classification of Schrock’s photos as derivative works
does not affect the applicable legal standard for deter-
mining copyrightability, although as we have noted, it
does determine the scope of copyright protection. Ac-
cordingly, we will assume without deciding that each
of Schrock’s photos qualifies as a derivative work within
the meaning of the Copyright Act.

B. Originality and Derivative Works
  As a constitutional and statutory matter, “[t]he sine qua
non of copyright is originality.” Feist Publ’ns, Inc., 499
10                                                No. 08-1296

U.S. at 345; see 17 U.S.C. § 102. Originality in this
context “means only that the work was independently
created by the author . . . and that it possesses at least some
minimal degree of creativity.” Feist Publ’ns, Inc., 499 U.S.
at 345. The Supreme Court emphasized in Feist that “the
requisite level of creativity is extremely low; even a
slight amount will suffice.” Id. The Court also explained
that “[o]riginality does not signify novelty; a work may
be original even though it closely resembles other works.”
Id. What is required is “independent creation plus a
modicum of creativity.” Id. at 346.
  Federal courts have historically applied a generous
standard of originality in evaluating photographic
works for copyright protection. See, e.g., Ets-Hokin,
225 F.3d at 1073-77; SHL Imaging, Inc. v. Artisan House,
Inc., 117 F. Supp. 2d 301, 305 (S.D.N.Y. 2000). In some
cases, the original expression may be found in the
staging and creation of the scene depicted in the
photograph. See, e.g., Mannion v. Coors Brewing Co., 377 F.
Supp. 2d 444, 452 (S.D.N.Y. 2005). But in many cases, the
photographer does not invent the scene or create the
subject matter depicted in it. Rather, the original
expression he contributes lies in the rendition of the subject
matter—that is, the effect created by the combination of
his choices of perspective, angle, lighting, shading, focus,
lens, and so on. See id.; Rogers v. Koons, 960 F.2d 301, 307
(2d Cir. 1992) (“Elements of originality in a photograph
may include posing the subjects, lighting, angle, selection
of film and camera, evoking the desired expression, and
almost any other variant involved.”). Most photographs
No. 08-1296                                                   11

contain at least some originality in their rendition, see
Mannion, 377 F. Supp. 2d at 452 (“Unless a photograph
replicates another work with total or near-total fidelity, it
will be at least somewhat original in the rendition.”),
except perhaps for a very limited class of photographs
that can be characterized as “slavish copies” of an under-
lying work, Bridgeman Art Library, Ltd. v. Corel Corp., 25
F. Supp. 2d 421, 427 (S.D.N.Y. 1998) (finding no
originality in transparencies of paintings where the goal
was to reproduce those works exactly and thus to
minimize or eliminate any individual expression).
  Our review of Schrock’s photographs convinces us that
they 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.3 This is confirmed by Schrock’s
deposition testimony describing his creative process in

3
  We note, however, that a mere shift in medium, without
more, is generally insufficient to satisfy the requirement of
originality for copyright in a derivative work. Durham Indus.,
Inc. v. Tomy Corp., 630 F.2d 905, 910 (2d Cir. 1980) (noting that
circuit’s rejection of “the contention that the originality re-
quirement of copyrightability can be satisfied by the mere
reproduction of a work of art in a different medium”); L. Batlin
& Son, Inc. v. Snyder, 536 F.2d 486, 491 (2d Cir. 1976) (same).
12                                               No. 08-1296

depicting the toys. Schrock explained how he used various
camera and lighting techniques to make the toys look more
“life like,” “personable,” and “friendly.” He explained how
he tried to give the toys “a little bit of dimension” and that
it was his goal to make the toys “a little bit better than
what they look like when you actually see them on
the shelf.” The original expression in the representative
sample is not particularly great (it was not meant to be),
but it is enough under the applicable standard to
warrant the limited copyright protection accorded
derivative works under § 103(b).
  Aside from arguing that the works fail under the
generally accepted test for originality, Learning Curve and
HIT offer two additional reasons why we should con-
clude that Schrock’s photographs are not original. First,
they claim that the photos are intended to serve the
“purely utilitarian function” of identifying products for
consumers. The purpose of the photographs, however,
is irrelevant. See Bleistein v. Donaldson Lithographing Co.,
188 U.S. 239, 251-52 (1903); SHL Imaging, Inc., 117 F. Supp.
2d at 311 (“That the photographs were intended solely
for commercial use has no bearing on their protectibility.”).
  The defendants’ second and more substantial argu-
ment is that it is not enough that Schrock’s photographs
might pass the ordinary test for originality; they claim that
as derivative works, the photos are subject to a higher
standard of originality. A leading copyright commentator
disagrees. The Nimmer treatise maintains that the
quantum of originality required for copyright in a
derivative work is the same as that required for copyright
No. 08-1296                                                13

in any other work. See 1 N IMMER ON C OPYRIGHT § 3.01, at 3-
2, § 3.03[A], at 3-7. More particularly, Nimmer says the
relevant standard is whether a derivative work con-
tains a “nontrivial” variation from the preexisting
work “sufficient to render the derivative work distin-
guishable from [the] prior work in any meaningful
manner.” Id. § 3.03[A], at 3-10. The caselaw generally fol-
lows this formulation. See, e.g., Eden Toys, Inc. v. Florelee
Undergarment Co., 697 F.2d 27, 34-35 (2d Cir. 1982)
(holding that numerous minor changes in an illustration
of Paddington Bear were sufficiently nontrivial because
they combined to give Paddington a “different, cleaner
‘look’ ”); Millworth Converting Corp. v. Slifka, 276 F.2d 443,
445 (2d Cir. 1960) (holding that embroidered reproduction
of a public-domain embroidery of Peter Pan was
sufficiently distinguishable because the latter gave a
“three-dimensional look” to the former embroidery).
  Learning Curve and HIT argue that our decision in
Gracen established a more demanding standard of orig-
inality for derivative works. Gracen involved an artistic
competition in which artists were invited to submit
paintings of the character Dorothy from the Metro-
Goldwyn-Mayer (“MGM”) movie The Wizard of Oz.
Participating artists were given a still photograph of
Dorothy from the film as an exemplar, and the paintings
were solicited and submitted with the understanding that
the best painting would be chosen for a series of collector’s
plates. Gracen, 698 F.2d at 301. Plaintiff Gracen prevailed
in the competition, but she refused to sign the contract
allowing her painting to be used in the collector’s plates.
14                                                  No. 08-1296

The competition sponsor commissioned another artist
to create a similar plate, and Gracen sued the sponsor,
MGM, and the artist for copyright infringement. We held
that Gracen could not maintain her infringement suit
because her painting, a derivative work, was not
“substantially different from the underlying work to be
copyrightable.” Id. at 305.
  Gracen drew this language from an influential Second
Circuit decision, L. Batlin & Son, Inc. v. Snyder, 536 F.2d
486 (2d Cir. 1976). Read in context, however, the cited
language from L. Batlin did not suggest that a heightened
standard of originality applies to derivative works.4 To
the contrary, the Second Circuit said only that to be
copyrightable a work must “ ‘contain some substantial,
not merely trivial originality.’ ” Id. at 490 (quoting

4
   To the extent that Gracen’s reading of L. Batlin and its “sub-
stantial difference” language can be understood as establishing
a more demanding standard of originality for derivative
works, it has received mixed reviews. Some commentators
have suggested that Gracen may have inappropriately nar-
rowed the copyrightability of derivative works without a
statutory basis. See 1 N IMMER ON C OPYRIGHT § 3.03[A], at 3-11; 2
W ILLIAM F. P ATRY , P ATRY ON C OPYRIGHT § 3:53 (2009). The
Nimmer treatise notes that Gracen’s focus on the word “sub-
stantial” reads the language from L. Batlin out of context because
L. Batlin simply applied the prevailing “distinguishable varia-
tion” test, described above. See 1 N IMMER ON C OPYRIGHT
§ 3.03[A], at 3-11 n.24. The Third Circuit has agreed and explic-
itly rejected Gracen’s interpretation of L. Batlin. Dam Things
from Den. v. Russ Berrie & Co., 290 F.3d 548, 564 (3d Cir. 2002).
No. 08-1296                                              15

Chamberlin v. Uris Sales Corp., 150 F.2d 512, 513 (2d Cir.
1945)). The court explained that for derivative works, as
for any other work, “[t[he test of originality is concededly
one with a low threshold in that all that is needed is that
the author contributed something more than a merely
trivial variation, something recognizably his own.” Id.
(internal quotation marks and ellipsis omitted).
  The concern expressed in Gracen was that a derivative
work could be so similar in appearance to the underlying
work that in a subsequent infringement suit brought by
a derivative author, it would be difficult to separate the
original elements of expression in the derivative and
underlying works in order to determine whether one
derivative work infringed another. The opinion offered
the example of artists A and B who both painted
their versions of the Mona Lisa, a painting in the public
domain. See Gracen, 698 F.2d at 304. “[I]f the difference
between the original and A’s reproduction is slight, the
difference between A’s and B’s reproductions will also
be slight, so that if B had access to A’s reproductions
the trier of fact will be hard-pressed to decide whether B
was copying A or copying the Mona Lisa itself.” Id.
  No doubt this concern is valid. But nothing in the
Copyright Act suggests that derivative works are subject
to a more exacting originality requirement than other
works of authorship. Indeed, we have explained since
Gracen that “the only ‘originality’ required for [a] new
work to by copyrightable . . . is enough expressive
variation from public-domain or other existing works to
enable the new work to be readily distinguished from its
16                                               No. 08-1296

predecessors.” Bucklew, 329 F.3d at 929. We emphasized
in Bucklew that this standard does not require a “high
degree of [incremental] originality.” Id.
  We think Gracen must be read in light of L. Batlin, on
which it relied, and Bucklew, which followed it. And
doing so reveals 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. It is worth repeating that the copyright
in a derivative work is thin, extending only to the
incremental original expression contributed by the author
of the derivative work. See 17 U.S.C. § 103(b).
  As applied to photographs, we have already explained
that the original expression in a photograph generally
subsists in its rendition of the subject matter. If the photo-
grapher’s rendition of a copyrighted work varies
enough from the underlying work to enable the
photograph to be distinguished from the underlying
work (aside from the obvious shift from three dimen-
sions to two, see supra n.3), then the photograph con-
tains sufficient incremental originality to qualify for
copyright. Schrock’s photos of the “Thomas & Friends”
toys are highly accurate product photos but contain
No. 08-1296                                                     17

minimally sufficient variation in angle, perspective,
lighting, and dimension to be distinguishable from
the underlying works; they are not “slavish
copies.” Accordingly, the photos qualify for the limited
derivative-work copyright provided by § 103(b).5 See

5
  Learning Curve and HIT argue in the alternative that
Schrock’s photos fall within the scènes à faire or merger doctrines
and therefore are not copyrightable. The doctrine of scènes à faire
(French for “scenes for action”) prohibits copyright protection
in elements or themes that are “so rudimentary, commonplace,
standard, or unavoidable that they do not serve to distinguish
one work within a class of works from another.” Bucklew,
329 F.3d at 929; see also Atari, Inc. v. N. Am. Philips Consumer
Elecs. Corp., 672 F.2d 607, 616 (7th Cir. 1982) (mazes and tunnels
in Atari’s PAC-MAN video game are common to this class of
video games and are therefore scènes à faire and not
copyrightable). The defendants’ argument seems to be that
because images of its “Thomas & Friends” toys will be
common to all product photos of the toys, no product photos
can be copyrighted. If this were true, then no derivative
work would be copyrightable; by definition, derivative works
incorporate the underlying work in some way. In any event,
as we explained in Bucklew,
    [e]very expressive work can be decomposed into elements
    not themselves copyrightable—the cars in a car chase, the
    kiss in a love scene, the dive bombers in a movie about
    Pearl Harbor, or for that matter the letters of the alphabet
    in any written work. The presence of such [common]
    elements obviously does not forfeit copyright protection
    of the work as a whole, but infringement cannot be found
                                                   (continued...)
18                                                   No. 08-1296

SHL Imaging, 117 F. Supp. 2d at 311 (holding that copyright
protection in product-accurate photographs was “thin”);
see also Rockford Map Publishers, Inc. v. Directory Serv. Co. of
Colo., Inc., 768 F.2d 145, 148 (7th Cir. 1985) (“Perhaps the
smaller the effort the smaller the contribution; if so, the
copyright simply bestows fewer rights.”). However narrow
that copyright might be, it at least protects against the kind
of outright copying that occurred here.

5
    (...continued)
       on the basis of such elements alone; it is the combination
       of elements, or particular novel twists given to them, that
       supply the minimal originality required for copyright
       protection.”
329 F.3d at 929. Schrock’s contribution of the photographic
elements of lighting, angle, perspective, and the like supply
the “minimal originality” required for copyright in the photos.
  Learning Curve and HIT also invoke the doctrine of merger,
which is premised on the principle that ideas cannot be copy-
righted. See JCW Invs., Inc. v. Novelty, Inc., 482 F.3d 910, 917
(7th Cir. 2007) (noting the “fundamental tenet of copyright
law that the idea is not protected, but the original expression
of the idea is”). Copyright cannot attach when the idea and the
expression “merge.” The defendants argue that because
Schrock’s photos are “straightforward” product photos, he
has done nothing more than “express” the “idea” of “basic
product photography.” The defendants do not explain how a
product photo—even one that is “straightforward” or “ba-
sic”—qualifies as an uncopyrightable “idea.” In any event,
this argument essentially advocates a categorical rule that
all accurate product photos are uncopyrightable. We are
unwilling to establish such a rule.
No. 08-1296                                                19

C. Authorization and Derivative Works
   To be copyrightable, a derivative work must not be
infringing. See 17 U.S.C. § 103(a); see also Pickett, 207 F.3d
at 405-06; Gracen, 698 F.2d at 302. The owner of the
copyright in the underlying work has the exclusive right to
“prepare derivative works based upon the copyrighted
work,” 17 U.S.C. § 106(2), and “it is a copyright
infringement to make or sell a derivative work without a
license from the owner of the copyright on the work
from which the derivative work is derived,” Bucklew,
329 F.3d at 930. This means the author of a derivative
work must have permission to make the work from
the owner of the copyright in the underlying work;
Gracen suggested, however, that the author of a derivative
work must also have permission to copyright it. 698 F.2d
at 303-04 (“[T]he question is not whether Miss Gracen
was licensed to make a derivative work but whether
she was also licensed to exhibit [her] painting and to
copyright it. . . . Even if [Gracen] was authorized to
exhibit her derivative works, she may not have been
authorized to copyright them.”). The district court
relied on this language from Gracen to conclude that
Schrock has no copyright in his photos because he was not
authorized by Learning Curve to copyright them. This
was error.
  First, Gracen’s language presupposing a permission-to-
copyright requirement was dicta; the case was actually
decided on nonoriginality grounds. Id. at 305. More
importantly, the dicta was mistaken; there is nothing in
the Copyright Act requiring the author of a derivative
20                                                   No. 08-1296

work to obtain permission to copyright his work from
the owner of the copyright in the underlying work. To
the contrary, the Act provides that copyright in a
derivative work, like copyright in any other work, arises by
operation of law once the author’s original expression
is fixed in a tangible medium. “Copyright protection
subsists . . . in original works of authorship fixed in any
tangible medium of expression,” 17 U.S.C. § 102(a), and
“[t]he subject matter of copyright . . . includes . . .
derivative works,” id. § 103(a). “Copyright in a work
protected under this title vests initially in the author or
authors of the work.” 6 Id. § 201(a); see also Schiller &
Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 413 (7th Cir.
1992) (“The creator of the [intellectual] property is the
owner . . . .”). While the author of an original work “may
obtain a certificate of copyright, which is ‘prima facie
evidence’ of its validity,” JCW Invs., Inc. v. Novelty, Inc., 482
F.3d 910, 915 (7th Cir. 2007), “copyright protection
begins at the moment of creation of ‘original works of
authorship,’ ” id. at 914. This principle applies with equal
force to derivative works.

6
  An exception is a “work made for hire,” defined in 17 U.S.C.
§ 101 as “a work prepared by an employee within the scope
of his or her employment” or “a work specially ordered
or commissioned” for inclusion in certain categories of intellec-
tual property as specified in subsection (2) of the definition.
Ownership of the copyright in a work made for hire vests in
“the employer or other person for whom the work was pre-
pared.” Id. § 201(b); see also Schiller & Schmidt, Inc. v. Nordisco
Corp., 969 F.2d 410, 412 (7th Cir. 1992). The defendants do not
argue that Schrock’s photos qualify as works made for hire.
No. 08-1296                                                21

   The leading treatise on copyright law confirms this basic
understanding. “[T]he right to claim copyright in a
noninfringing derivative work arises by operation of law,
not through authority from the copyright owner of
the underlying work.” 7 1 N IMMER ON C OPYRIGHT § 3.06, at
3-34.34. We have cited Nimmer with approval on this
point. See Liu, 302 F.3d at 755. As we noted in Liu, however,
there is an important proviso explained in the treatise:
“[I]f the pertinent agreement between the parties af-
firmatively bars the licensee from obtaining copyright pro-
tection even in a licensed derivative work, that contractual
provision would appear to govern.’ ” 1 N IMMER ON
C OPYRIGHT § 3.06, at 3-34.34; see also Liu, 302 F.3d at 755.
  On this point Liu is instructive. Price Waterhouse LLP
owned the copyright to a computer-software program,
and Yang, an employee, was asked to help recruit a
Chinese computer programmer to increase the speed of
the program. Liu, 302 F.3d at 751. Yang became concerned
that if the Chinese programmer was successful, Price
Waterhouse might exclude her from future Chinese
ventures. To allay these concerns, Price Waterhouse
entered into a series of letter agreements with Yang
specifying a payment schedule for benchmark improve-

7
   The Nimmer treatise notes the anomaly in Gracen: “[Gracen]
would appear to be incorrect in suggesting that copyright in
any derivative work may not be claimed, even if the making
of such work had been licensed, unless such license affirma-
tively included the right to claim copyright in the derivative
work.” 1 N IMMER ON C OPYRIGHT § 3.06, at 3-34.34 n.28.
22                                            No. 08-1296

ments in the program and promising to appoint her to
head additional projects in China if she and the Chinese
programmer met the benchmarks. The agreements
also provided, however, that Price Waterhouse would
own the intellectual-property rights to the improved
software. Id. at 751-52. The Chinese programmer
achieved the desired increase in speed, but a dispute
arose over Yang’s payment and Yang refused to give
Price Waterhouse the source code to the improved
software. She then induced the Chinese programmer to
assign any copyright in the improved program to Liu, her
daughter, and registered the copyright in Liu’s name. Id.
at 752.
  In the meantime, Price Waterhouse turned to another
consultant for assistance in improving its software
program. The new consultant successfully increased the
speed of the program, and Price Waterhouse incorporated
these improvements into its software. Liu then sued
Price Waterhouse for copyright infringement. Price
Waterhouse counterclaimed for infringement and filed a
third-party complaint against Yang for contributory
infringement and various state-law claims sounding in
misappropriation. For her part, Yang asserted a breach-of-
contract claim against Price Waterhouse for nonpayment
on the letter agreements. A jury found for Price
Waterhouse on the copyright-infringement claims and for
Yang on the breach-of-contract claim. Id. at 753.
  We affirmed, explaining that because the owner of a
copyrighted work has the exclusive right to control the
preparation of derivative works, the owner could limit
No. 08-1296                                                23

the derivative-work author’s intellectual-property rights
in the contract, license, or agreement that authorized the
production of the derivative work. Id. at 755. Citing
Nimmer, we noted that although the right to claim
copyright in a derivative work arises by operation of
law—not by permission of the underlying copyright
owner—the parties may alter this general rule by
agreement. Id. (“While the Copyright Act makes authors of
derivative works the presumptive owners of copyright
rights in their contribution, it also allows parties to adjust
those rights by contract.” (quotation marks omitted)). We
affirmed the jury’s verdict finding that the parties had
agreed that Price Waterhouse would own the copyright
in any derivative program. Id.
  In this case, the evidence submitted with the summary-
judgment motion does not establish as a matter of law
that the parties adjusted Schrock’s rights by contract; as
in Liu, it may be a jury question. We say “may” because
further development of the record might resolve the
remaining liability questions as a matter of law. It is
undisputed that Schrock was authorized to photograph
the “Thomas & Friends” toys, and as the creator of the
photos, Schrock’s copyright arose by operation of law.8

8
  Schrock argued in the alternative that if permission to
copyright his photos was required, application of agency
principles entitled him to copyright protection. That is, he
argued that Learning Curve, as HIT’s licensee, had apparent
authority to permit him to copyright his photos, and that it
                                               (continued...)
24                                              No. 08-1296

We cannot tell, however, whether the parties altered
this default rule in their agreements. We note that HIT
apparently attempted to do so, at least vis-à-vis
Learning Curve; it claims that its licensing agreement
with Learning Curve expressly retained the intellectual-
property rights in all works that were based upon its
copyrights. HIT also claims that the licensing agree-
ment prohibited Learning Curve from granting any
third parties copyright protection in derivative works
based on HIT’s copyright. As we have noted, however,
the licensing agreement is not in the record. Although
HIT’s summary-judgment submission included an
affidavit of its vice-president of licensing describing the
agreement, the best evidence of the terms of an agree-
ment is, of course, the agreement itself. See F ED. R.
E VID. 1002.
  The terms of the agreement between Learning Curve
and Schrock are even less clear. Whether Learning Curve,
as HIT’s licensee, contractually limited Schrock’s right

8
  (...continued)
did so—albeit not affirmatively but by its silence on the
subject. Gracen suggests that application of agency law, in-
cluding the doctrine of apparent authority, is appropriate in
this context. 698 F.2d at 303-04. We need not address this
alternative argument, however. As we have explained, because
Schrock was authorized to make the photos, his copyright
arose by operation of law and did not require authority to
copyright from the owner or licensee of the copyright in the
underlying works—whether actual or apparent.
No. 08-1296                                            25

to copyright his photos is unknown; its failure to
develop the record on this point, however, suggests that
it did not. From what we can tell, the agreement between
Learning Curve and Schrock appears to consist of a
series of oral agreements followed by invoices for
completed photography work. If Learning Curve was
required under its licensing agreement with HIT to
protect HIT’s intellectual-property rights in connection
with its retention of Schrock’s photography services, it
apparently failed to do so. Learning Curve argues in the
alternative that Schrock granted it an unlimited license
to use his photos, but on this issue the record is also
ambiguous. We leave it to the district court to sort out,
consistent with this opinion, whether the evidence
requires a trial to determine liability among the parties.
  Accordingly, for all the foregoing reasons, we R EVERSE
the judgment of the district court and R EMAND for
further proceedings consistent with this opinion.
26   No. 08-1296
No. 08-1296             27

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