`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`))
`
`))
`
`DANIEL P. SCHROCK, etc.,
`Plaintiff,
`
`)
`v.
`)
`LEARNING CURVE INTERNATIONAL, INC.,)
`et al.,
`
`No. 04 C 6927
`
`))
`
`)
`Defendants.
`MEMORANDUM OPINION AND ORDER
`Daniel Schrock d/b/a Dan Schrock Photography (“Schrock”), a
`Chicago-based professional photographer, has brought this action
`against a web of corporate defendants--a web that is best
`untangled by carving out two groupings. First, Schrock complains
`against the “RC2” defendants (for convenience referred to
`collectively by the “RC2” name), comprising Learning Curve
`International, Inc., RC2 Corporation and RC2 Brands, Inc.
`Learning Curve International, Inc. is a distributor of children’s
`toys that was acquired in early 2003 by Racing Champions Ertl
`Corporation, which later changed its name to RC2 Corporation.
`RC2 Brands, Inc., a designer, producer and marketer of children’s
`toys and collectibles, is a subsidiary of RC2 Corporation. As
`for the second group of corporate defendants (for convenience
`referred to collectively as “HIT Entertainment” ), it comprises
`1
`Gullane Entertainment, Inc., Gullane Thomas Limited, Thomas
`
` Each of RC2 and HIT Entertainment is treated here for
`1
`convenience as a singular noun.
`
`
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`Licensing LLC and HIT Entertainment, PLC (all are predecessors,
`subsidiaries or affiliates of HIT Entertainment Limited).
`Schrock complains of copyright infringement by both RC2 and
`HIT Entertainment and breach of bailment and conversion by RC2.
`Each of the two sets of defendants has, with trial looming (at
`long last!), moved for summary judgment under Fed. R. Civ. P.
`(“Rule”) 56. For the reasons set forth below, both motions are
`granted as to Schrock’s copyright claims, while his state law
`claims against RC2 are denied without prejudice.
`Summary Judgment Standard
`Every Rule 56 movant bears the burden of establishing the
`absence of any genuine issue of material fact (Celotex Corp. v.
`Catrett, (477 U.S. 317, 322-23 (1986)). For that purpose courts
`consider the evidentiary record in the light most favorable to
`nonmovants and draw all reasonable inferences in their favor
`(Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7 Cir.
`th
`2002)). But to avoid summary judgment a nonmovant “must produce
`more than a scintilla of evidence to support his position” that a
`genuine issue of material fact exists (Pugh v. City of Attica,
`259 F.3d 619, 625 (7 Cir. 2001)) and “must set forth specific
`th
`facts that demonstrate a genuine issue of triable fact” (id.).
`Ultimately, summary judgment is warranted only if a reasonable
`jury could not return a verdict for the nonmovant (Anderson v.
`Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
`
`2
`
`
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`What follows is a summary of the facts, viewed of course in
`the light most favorable to nonmovant Schrock--but within the
`limitations created by the extent of his compliance (or
`noncompliance) with the strictures of this District Court’s LR
`56.1. Here is that summary.
`2
`Background3
`HIT Entertainment owns the copyright in “Thomas & Friends”
`properties (HIT St. ¶8) and has licensed RC2 to produce toys
`based on those properties (HIT St. ¶9, RC2 St. ¶9). Pursuant to
`
` LR 56.1(a) requires each Rule 56 movant to submit a
`2
`statement of assertedly uncontested facts, with citations to the
`record in support of each such fact. Then LR 56.1(b) requires
`the nonmoving party to respond point by point, with citations to
`the record in support of (1) any claimed dispute as to the
`movant’s variation of the facts and (2) any additional facts that
`the nonmovant chooses to assert. LR 56.1’s goal of simplifying
`the determination whether there are or are not motion-defeating
`material factual issues has been sidetracked somewhat by cross-
`motions to strike the other side’s submissions, initiated by
`Schrock and countered by RC2 (with HIT Entertainment then joining
`RC2’s motion by reference). While neither party conforms
`perfectly to the prescripts of LR 56.1, each has provided
`sufficient information for this Court to rule on the RC2-HIT
`Entertainment motions. Given this opinion’s ultimate holding
`that Schrock lacked copyright protection in his images, many of
`the factual assertions in the parties’ LR 56.1 statements had no
`bearing on resolution of the motions.
` Each of HIT Entertainment and RC2 submitted a separate LR
`3
`56.1(a) statement. HIT Entertainment’s statements will be
`referred to as “HIT St. ¶--,” Schrock’s responses as “Schrock HIT
`St. ¶--” and Schrock’s additional statements as “Schrock HIT Add.
`St. ¶--.” RC2's statements and Schrock’s response and additional
`statements will be treated likewise. Where the factual assertion
`in a party’s LR 56.1 statement is undisputed by the opposing
`party, this opinion will cite only to the original statement.
`Schrock’s combined memorandum in opposition to the two Rule 56
`motions will be cited as “Schrock Mem. --.”
`33
`
`
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`that license, RC2 has developed hundreds of different toys with
`4
`global distribution (HIT St. ¶10, RC2 St. ¶10).
`From 1999 through 2003 RC2 (actually Learning Curve
`International, Inc. at that time) retained Schrock to create
`product photographs of some of its wares, including some of its
`Thomas & Friends toys, for use in marketing (RC2 St. ¶14, Schrock
`Mem. 6). In 2004 Schrock registered copyrights for a large
`number of photographs that he shot for RC2, including some
`Thomas & Friends products (HIT St. ¶21, Schrock Mem. 6).
`Out of some 100 written invoices submitted by Schrock to RC2
`relating to the photo shoots, at least 72 included a “usage
`restriction” limiting RC2's use of the photographs to two years
`(Schrock RC2 St. ¶¶51, 70). Schrock was paid in full for all of
`his submitted invoices (Schrock RC2 Add. St. ¶19). After the
`expiration of the claimed two-year “usage restriction” and the
`filing of this lawsuit, RC2 and HIT Entertainment have continued
`to use those product photographs over Schrock’s objection
`(Schrock HIT Add. St. ¶¶39-40, Schrock RC2 Add. St. ¶36, Schrock
`Mem. 8).5
`
` RC2’s Thomas & Friends toys generally take the form of
`4
`scaled-down train engines, railcars and segments of railway
`track, along with the occasional tram, lorry or assorted vehicle
`(HIT Ex. I, 2002 RC2 Catalog).
` Schrock also charges copyright infringement through the
`5
`impermissible use of some of his photographs (e.g., reproduction
`on RC2’s website, while permissible usage was limited to catalog
`and product packaging). But given this opinion’s conclusion that
`44
`
`
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`Validity of the Claimed Copyright
`Two elements are required to maintain a successful copyright
`infringement action: Plaintiff must own a valid copyright, and
`defendant must have copied original elements of the copyrighted
`work (Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340,
`361 (1991)). Schrock falls at the first hurdle.
`Before this opinion turns to the issue that it finds
`dispositive, something needs to be said about what RC2 sets up as
`its first line of substantive attack: “that the works lack
`sufficient originality to be copyrightable” (its Mem. 2, followed
`by its Mem. Section II at 3-6). Schrock quite properly
`6
`responded to that contention by pointing to the long history of
`recognition of photography as an art form entitled to protection,
`a history (though Schrock does not go into the detail marshaled
`by the Ninth Circuit’s Ets-Hokin opinion cited a bit later in
`this opinion) that began with President Lincoln’s signing into
`law (just a month before his assassination) a statute that made
`“photographs and the negatives thereof” copyrightable (13 Stat.
`540), that then continued with the Supreme Court’s upholding of
`the constitutionality of that statute in Burrow-Giles
`
`Schrock possessed no copyright over his photographs, the bases
`for his infringement claims are immaterial.
` HIT offers up the same lack-of-originality argument.
`6
`Though it gives that contention third rather than first place in
`its opening gun memorandum, it devotes nearly half of its text
`(its Mem. 8-14) to that subject.
`
`55
`
`
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`Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884), that then
`continued over the years through such classic decisions as that
`by Judge Learned Hand (then a District Judge) in Jewelers’
`Circular Pub. Co. v. Keystone Pub Co., 274 F. 932 (D.C. N.Y.
`1921), aff’d 281 F. 183 (2d Cir. 1922) and that has continued to
`the present day (see, e.g., our Court of Appeals’ opinion in
`Schiller & Schmidt v. Nordisco, 969 F.2d 410 (7 Cir. 1992)).
`th
`In fact courts have been generous to the photographer and
`his or her photographs on the subject of originality, demanding
`not a great deal in that respect--a process that began with the
`Supreme Court’s reference to the photograph of Oscar Wilde
`involved in Burrow-Giles. And in that respect this Court is not
`about to conduct a comprehensive review of Schrock’s work of the
`type that it essayed in Gentieu v. Tony Stone Images/Chicago,
`Inc., 255 F.Supp.2d 838 (N.D. Ill. 2003), particularly because
`any such parsing in this instance would involve a high degree of
`subjectivity.
`For that reason and others this opinion eschews addressing
`the “originality” issue, turning instead to the question whether
`Schrock’s photographs are derivative works. And as will be seen,
`what controls that inquiry is not that Schrock’s work products
`are photographs simpliciter (thus meriting copyrightability under
`the generous standards referred to earlier), but are rather
`photographs of objects that are themselves copyrighted, bringing
`
`66
`
`
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`the case within the term of art that the Copyright Act (at 17
`U.S.C. §101 ) defines as a “derivative work.” On then to that
`7
`analysis.
`Derivative Work?
`Here is the definition of “derivative work” in Section 101:
`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.”
`That concept must be examined in the context of Schrock’s
`photographs having depicted copyrighted (or copyrightable) toys:
`plastic replicas of Thomas the Tank Engine and his anthropo-
`morphic friends from the fantastical island of Sodor.
`8
`9
`Ink has been spilled on both sides of the caselaw’s debate
`over whether a photograph of a copyrighted work is a derivative
`work. In their leading treatise on copyright law (Nimmer on
`
` Further citations to the Copyright Act will take the form
`7
`“Section --,” omitting the prefatory “17 U.S.C.”
` “Friends” may be too generous a designation for some of
`8
`the characters in Thomas’s world (see, e.g., “Diesel,” HIT.
`Ex. I, 2002 Catalog, at 165).
` Of the forty-three dioceses in the Church of England, one
`9
`is actually designated “Sodor and Man,” although curiously enough
`that diocese encompasses only the Isle of Man. Whether the
`island of Sodor ever existed (or perhaps still exists but somehow
`evades today’s cartographers) is well beyond the scope of this
`opinion.
`
`77
`
`
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`Copyright (2007), Professors Nimmer state that “not a great deal
`hinges on categorization.” Hence they endorse neither position,
`instead pegging the copyrightability of a photograph of a
`copyrighted work on its level of originality under the
`traditional approach: “lighting, angle, perspective, and the
`other ingredients that traditionally apply to that art-form” (id.
`§3.03[C][3]).
`This Court has no quarrel with that approach, having
`articulated it in its opinion in Gentieu, 255 F.Supp.2d at 848-
`49, then having applied it there in a detailed analysis. But as
`will be seen, that issue need not be dealt with here at all, a
`conclusion driven by the applicable caselaw. Hence the analysis
`here begins--but does not end--by turning to the debate left
`unresolved by Professors Nimmer--a debate well framed by two
`cases decided elsewhere, each handed down in 2000.
`On the one hand, Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d
`1068 (9 Cir. 2000) held that a product photograph of a Skyy
`th
`vodka bottle was not a “derivative work” in statutory terms
`because the bottle itself was uncopyrightable--and because under
`Section 101 a derivative work must derive from a “preexisting
`work” (read: copyrightable work), a photograph of the
`uncopyrightable object cannot be a derivative work (id. at 1081).
`Although the Ets-Hokin court did not speak directly to the
`corollary issue now before this Court, its approach surely
`
`88
`
`
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`creates the inference that if the bottle had been copyrightable
`the photograph would have been a derivative work.
`Then just less than two months later District Judge Pauley
`of the Southern District of New York reached the opposite
`conclusion in SHL Imaging, Inc. v. Artisan House, Inc., 117 F.
`Supp. 2d 301 (S.D. N.Y. 2000). Holding that product
`10
`photographs of picture and mirror frames were not derivative
`works, Judge Pauley stated (id. at 306):
`While the Ets-Hokin court correctly noted that a
`derivative work must be based on a “preexisting work,”
`and that the term “work” refers to a “work of
`authorship” as set forth in 17 U.S.C. §102(a), it
`failed to appreciate that any derivative work must
`recast, transform or ad[a]pt the authorship contained
`in the preexisting work. A photograph of Jeff Koons’
`“Puppy” sculpture in Manhattan’s Rockefeller Center,
`merely depicts that sculpture; it does not recast,
`transform, or adapt Koons' sculptural authorship. In
`short, the authorship of the photographic work is
`entirely different and separate from the authorship of
`the sculpture.
`
`Even though our own Court of Appeals has not had occasion to
`address the issue as directly, some guidance can be gleaned from
`two Seventh Circuit cases. Each speaks to the subject via
`dictum, but the voice in which each speaks is unambiguous.
`Most recently, whether books containing photographs of
`copyrighted Beanie Babies infringed upon the copyright holder’s
`
` Although SHL Imaging as a District Court opinion is of
`10
`course nonprecedential, it is cited and quoted here both because
`it draws the line in the sand so clearly and because it is
`exemplary of cases taking the same view.
`99
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`rights was at issue in Ty, Inc. v. Publ’ns Int’l Ltd., 292 F.3d
`512 (7 Cir. 2002), where defendant conceded that the
`th
`photographs of the copyrighted works constituted derivative works
`(id. at 515). While the court noted that concession on a couple
`of occasions in describing the derivative status of the
`photographs (id. at 515, 519), it elsewhere stated in its own
`terms that the photographs were derivative works (id. at 519,
`523)(emphasis on “essentially” in original):
`But For the Love of Beanie Babies might well be thought
`essentially just a collection of photographs of Beanie
`Babies, and photographs of Beanie Babies are derivative
`works from the copyrighted Beanie Babies themselves.
`* * *
`A similar judgment might be possible here with regard
`to For the Love of Beanie Babies, which we described as
`basically a picture book; and the pictures are
`derivative works from Ty’s copyrighted soft sculptures.
`And some 15 years earlier Saturday Evening Post Co. v.
`Rumbleseat Press, Inc., 816 F.2d 1191, 1201 (7 Cir. 1987) had
`th
`delivered the same message, albeit in conclusory fashion without
`explanatory analysis. Here is what the court said then:
`Rumbleseat argues among other things that the Post
`failed to register its copyrights properly....It seems
`more likely though, that what happened...is that the
`Post failed to perfect copyright in its derivative
`works--the photographs, printed in the magazine, of
`Rockwell’s illustrations.
`Schrock’s photographs are product photographs--depictions of
`Thomas & Friends toys. Such depictions portray the three
`dimensional toy in two dimensions. In the words of Section 101,
`
`1100
`
`
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`such photographs “recast, transform[ ] or adapt[ ]” the
`preexisting three dimensional toy into another medium, thus
`creating a derivative work “based upon” the preexisting work.
`Such photographs are no less derivative works than are three
`dimensional embodiments of two dimensional drawings (e.g., a
`guitar created to embody a written symbol, as in Pickett v.
`Prince, 207 F.3d 402 (7 Cir. 2000), or porcelain dolls
`th
`fashioned to embody Norman Rockwell illustrations, as in Saturday
`Evening Post, 816 F.2d at 1193). In sum, Schrock’s photographs
`are derivative works of the copyrightable toys that they portray.
`Copyrightability
`To be sure, status as a derivative work does not of itself
`render a work uncopyrightable, but it does alter the playing
`11
`field. Because Section 106(2) grants a copyright owner the
`exclusive right to prepare (or to authorize) derivative works as
`part of its bundle of rights, a third party seeking to copyright
`a derivative work must have the permission of the copyright
`holder of the underlying work (Pickett, 207 F.3d at 406; Gracen
`v. Bradford Exchange, 698 F.2d 300, 302 (7 Cir. 1983)). And
`th
`even with such permission, Section 103(b) extends the third
`party’s copyright only to the incremental originality over the
`underlying work that is present in the derivative work.
`
` Indeed, Section 103(a) explains that the list of
`11
`enumerated copyrightable works in Section 102 includes derivative
`works.
`
`1111
`
`
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`There are material parallels between this case and Gracen.
`There plaintiff Gracen painted Dorothy from “The Wizard of Oz” as
`part of a competition for a contract to produce paintings for a
`number of collectible plates (Gracen, 698 F.2d 301). Upon
`winning the competition, she turned down the contract and
`registered her painting for a copyright (id.). Nothing daunted,
`the plate producer used Gracen’s painting as a model and
`commissioned another artist to create a Dorothy painting to be
`used on the collectible plate (id. at 301-02). When Gracen
`considered that the Dorothy plate looked too much like her own
`painting for comfort, she sued for copyright infringement (id. at
`302).
`
`Because Gracen’s Dorothy painting was a work derivative of
`the film as the underlying work, the opinion set out to determine
`whether Gracen was authorized to create and copyright that
`derivative work (Gracen, 698 F.2d at 302-04). And because she
`had been invited to participate in the competition, the court
`held that Gracen had authorization to produce the derivative
`work--but what controlled a decision adverse to Gracen was that
`nowhere had she been given authorization to copyright her
`derivative work (id. at 304) Consequently Gracen lacked a
`12
`copyright interest in her Dorothy painting.
`
` There was, as well, a genuine issue of material fact as
`12
`to whether Gracen had permission to exhibit the derivative work
`publicly. That issue has no relevance to the present dispute.
`1122
`
`
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`In this instance Schrock was unquestionably granted rights
`pertaining to his derivative work photographs. To speak of his
`having “permission” to create them would be an understatement--in
`fact he was paid (quite well--some $400,000) to do so. But
`nowhere in the record is there any evidence even inferentially
`indicating that he was authorized to copyright the derivative
`works. Indeed, Schrock’s own deposition testimony says otherwise
`(HIT Ex. G, Schrock Dep. 374-75):
`Q: For any work that you’ve registered that is a
`photographic work of a Thomas the Tank Engine line
`product, have you sought permission from HIT
`Entertainment to do so?
`A: No. I didn’t know I had to do--
`MR. BARINHOLTZ [Schrock’s lawyer]: I would object
`to the form.
`By MR. HANSON:
`Q: Have you sought it or not?
`A: No.
`Q: Okay. For any registration not Thomas, that
`is, for any other work that you–-for which you are
`claiming damages or remedy in this case, have you
`sought permission from any other entity including but
`not limited to RC2?
`A: No.
`Q: You haven’t sought permission from RC2 for any
`of your copyright registrations?
`A: No.
`Nor does Schrock’s assertion that he “was never informed by
`any personnel of RC2/LCI or HIT Entertainment that they would
`
`1133
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`object to [him] registering copyrights in [his] photographs”
`(Schrock Ex. A, Schrock Aff. ¶12) create any inference that he
`had affirmative authority to register the copyrights. Silence in
`that respect cannot bespeak acceptance--after all, RC2 and HIT
`Entertainment were ignorant of Schrock’s copyright registrations
`or his plans to seek them. Moreover, that Schrock affidavit
`faces still another difficulty: “A plaintiff cannot, however,
`create an issue of material fact by submitting an affidavit that
`contradicts an earlier deposition” (Pourghoraishi v. Flying J,
`Inc., 449 F.3d 751, 759 (7 Cir. 2006)).
`th
`Without approval from the owner of the underlying work,
`approval that was totally absent here, Schrock could not obtain a
`copyright over his derivative works. Although Section 410(c)
`provides that registration of a work with the Copyright Office
`constitutes prima facie evidence of copyright validity, that
`provision creates nothing more than “simply a rebuttable
`presumption” (Mid America Title Co. v. Kirk, 59 F.3d 719, 721
`(7 Cir. 1995)). Here that presumption of copyright has been
`th
`thoroughly rebutted. Thus lacking a valid copyright in the
`works, Schrock also--by definition--lacks the ability to maintain
`a suit for copyright infringement against RC2 or HIT
`Entertainment.13
`
` Although RC2 prevails on that issue, it has overreached
`13
`considerably by also claiming to be the joint author of Schrock’s
`photographs (its Mem. 8-10 and R. Mem. 8-11). This Court rejects
`1144
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`State Law Claims
`With Schrock’s federal theory of recovery now having been
`revealed as not even a pumpkin, let alone a fancied coach, his
`remaining grievances (bailment and conversion of the photographic
`transparencies) find themselves like Prince Charming at the
`stroke of midnight--all alone at the proverbial ball without even
`a glass slipper to clutch. And because Schrock’s state law
`theories of recovery (brought under the rubric of supplemental
`jurisdiction) now lack any federal mooring, those remaining
`grievances are dismissed without prejudice (the “general rule”
`prescribed four decades ago in United Mine Workers of Am. v.
`Gibbs, 383 U.S. 715, 726 (1966) and reiterated to this day by our
`Court of Appeals (among others)). In that respect, this Court
`expresses no view other than to say that the outcome of the state
`law theories of recovery is not so clear that judicial economy is
`disserved by their dismissal in favor of permitting them to be
`litigated in the state court system (if Schrock wishes to pursue
`them there), which can apply state law directly, rather than on a
`predictive basis as any federal court must do (on that score,
`contrast such cases as Sellars v. City of Gary, 453 F.3d 848, 852
`
`that contention as lacking in merit--a holding that may be
`relevant if the parties’ dispute is revived in another forum on
`the state law claims that are not decided here.
`1155
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`(7 Cir. 2006)).
`th
`
`14
`
`Conclusion
`Because as a matter of law Schrock does not hold a valid
`copyright over the photographs, his assertions of copyright
`infringement are dismissed, and his concomitant prayer for
`injunctive relief, accounting and declaratory relief as related
`to the copyright infringement claims are denied. In that regard
`there are no genuine issues of material fact, so that RC2 and HIT
`Entertainment are entitled to a judgment as a matter of law. And
`when that is coupled with the without-prejudice dismissal of
`Schrock’s supplemental state law claims, this action is dismissed
`in its entirety--a final judgment.
`
`________________________________________
`Milton I. Shadur
`Senior United States District Judge
`
`Date: January 29, 2008
`
` By way of example (and with no intention of being
`14
`exhaustive), the briefing on the current motions has not
`sufficiently fleshed out the effect of Schrock’s effort at
`setting contractual limits on the further direct use (not
`copying) of his work product even in the absence of copyright.
`1166