Schrock v. Learning Curve International, Inc.

586 F.3d 513 (7th Cir. 2009)

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Nature of the Case

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Facts

HIT (D) is the owner of the copyright in the 'Thomas & Friends' properties. Learning (D) is a producer and distributor of children's toys. They entered into a licensing agreement. HIT (D) retained all intellectual property rights in the works produced under the license. Learning (D) retained P to take product photographs of its toys, including those based on HIT's (D) characters, for use in promotional materials. P photographed several lines of Learning's (D) toys, including many of the 'Thomas & Friends' toy trains, related figures, and train-set accessories. P's invoices included 'usage restrictions' purporting to limit Learning's (D) use of his photographs to two years. Learning (D) paid the invoices in full--in total more than $400,000. Learning (D) stopped using P but continued to use some of his photos in its printed advertising, on packaging, and on the internet. In 2004 P registered his photos for copyright protection and sued Ds for infringement. Ds moved for summary judgment, claiming P's photos were derivative works and not sufficiently original to claim copyright protection, and that Ds never authorized P to copyright the photos. Ds argued in the alternative that P granted them an unlimited oral license to use the photos. The judge held that Ds' permission to make the photos was not enough to trigger P's copyright in them; the judge said P must also have Ds' permission to copyright the photos. P did not have that permission, so the judge concluded that P had no copyright in the photos. P appealed. P contends that his photos are not derivative works, and even if they are, his copyright is valid and enforceable because he had permission from Ds to photograph the underlying copyrighted works and his photos contained sufficient incremental original expression to qualify for copyright. Ds contend 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. Ds maintain that P's photographs contain insufficient originality to be copyrightable and that copyright protection is barred under the scenes a faire or merger doctrines.