Gracen v. Bradford Exchange, 82-1795

• Decision Date: 12 January 1983
• Docket Number: No. 82-1795,82-1795
• Citation: 698 F.2d 300
• Parties: , 1983 Copr.L.Dec. P 25,490 Jorie GRACEN, Plaintiff, Counterdefendant-Appellant, v. The BRADFORD EXCHANGE and Metro-Goldwyn-Mayer, Defendants, Counterplaintiffs- Appellees, and Edwin M. Knowles China Company and James Auckland, Defendants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 300

698 F.2d 300

217 U.S.P.Q. 1294, 1983 Copr.L.Dec. P 25,490

Jorie GRACEN, Plaintiff, Counterdefendant-Appellant, v. The BRADFORD EXCHANGE and Metro-Goldwyn-Mayer, Defendants, Counterplaintiffs- Appellees, and Edwin M. Knowles China Company and James Auckland, Defendants.

No. 82-1795.

United States Court of Appeals, Seventh Circuit.

Argued Dec. 7, 1982.

Decided Jan. 12, 1983.

Charles Rowe, Chicago, Ill., for plaintiff, counterdefendant-appellant.

Robert W. Gettleman, Arthur Don, D'Ancona & Pflaum, Chicago, Ill., for defendants, counterplaintiffs-appellees.

Before BAUER and POSNER, Circuit Judges, and HOFFMAN, Senior District Judge. ^*

POSNER, Circuit Judge.

This appeal brings up to us questions of some novelty, at least in this circuit, regarding implied copyright licenses and the required originality for copyrighting a derivative work.

In 1939 MGM produced and copyrighted the movie "The Wizard of Oz." The central character in the movie, Dorothy, was played by Judy Garland. The copyright was renewed by MGM in 1966 and is conceded, at least for purposes of this case, to be valid and in effect today. In 1976 MGM licensed Bradford Exchange to use characters and scenes from the movie in a series of collectors' plates. Bradford invited several artists to submit paintings of Dorothy as played by Judy Garland, with the understanding that the artist who submitted the best painting would be offered a contract for the entire series. Bradford supplied each artist with photographs from the movie and with instructions for the painting that included the following: "We do want your interpretation of these images, but your interpretation must evoke all the warm feeling the people have for the film and its actors. So, your Judy/Dorothy must be very recognizable as everybody's Judy/Dorothy."

Jorie Gracen, an employee in Bradford's order-processing department, was permitted to join the competition. From photographs and her recollections of the movie (which she had seen several times) she made a painting of Dorothy as played by Judy Garland; Figure 1 at the end of this opinion is a reproduction of a photograph of Miss Gracen's painting (an inadequate one, because the original is in color). Bradford exhibited it along with the other contestants' paintings in a shopping center. The passersby liked Miss Gracen's the best, and Bradford pronounced her the winner of the competition and offered her a contract to do the series, as well as paying her, as apparently it paid each of the other contestants, $200. But she did not like the contract terms and refused to sign, and Bradford turned to another artist, James Auckland, who had not been one of the original contestants. He signed a contract to do the series and Bradford gave him Miss Gracen's painting to help him in doing his painting of Dorothy. The record does not indicate who has her painting now.

Gracen's counsel describes Auckland's painting of Dorothy as a "piratical copy" of her painting. Bradford could easily have refuted this charge, if it is false, by attaching to its motion for summary judgment a photograph of its Dorothy plate, but it did not, and for purposes of this appeal we must assume that the plate is a copy of Miss Gracen's painting. This is not an absurd supposition. Bradford, at least at first, was rapturous about Miss Gracen's painting of Dorothy. It called Miss Gracen "a true prodigy." It said that hers "was the one painting that conveyed the essence of Judy's character in the film ... the painting that left everybody saying, 'That's Judy in Oz.' " Auckland's deposition states that Bradford gave him her painting with directions to "clean it up," which he understood to mean: do the same thing but make it "a little more professional."

Miss Gracen also made five drawings of other characters in the movie, for example the Scarecrow as played by Ray Bolger. Auckland's affidavit states without contradiction that he had not seen any of the drawings when he made his paintings of those characters. Pictures of the plates that were made from his paintings are attached to the motion for summary judgment filed by MGM and Bradford, but there is no picture of his Dorothy plate, lending some support to the charge that it is a "piratical copy." But apparently the other plates are not copies at all.

Auckland completed the series, and the plates were manufactured and sold. But Miss Gracen meanwhile had obtained copyright registrations on her painting and drawings, and in 1978 she brought this action for copyright infringement against MGM, Bradford, Auckland, and the manufacturer of the plates. MGM and Bradford counterclaimed, alleging among other things that Miss Gracen had infringed the copyright on the movie by showing her drawings and a photograph of her painting to people whom she was soliciting for artistic commissions.

The district court granted summary judgment against Miss Gracen on both the main claim and the counterclaim. It held that she could not copyright her painting and drawings because they were not original and that she had infringed MGM's copyright. The court entered judgment for $1500 on the counterclaim. Neither the judgment nor the opinion accompanying it refers to the noncopyright claims in the counterclaim, thus inviting the question whether that judgment is final and hence appealable under 28 U.S.C. Sec. 1291. But this is not a serious problem, because the judgment purports to dispose of "their [MGM's and Bradford's] counterclaims" and both sides have treated it as disposing of the counterclaim in its entirety. The noncopyright claims must therefore be regarded as having been either dismissed or abandoned.

The briefs and argument in this court follow the district court in treating the principal question as whether Miss Gracen's painting and drawings are sufficiently original to be copyrightable as derivative works under 17 U.S.C. Sec. 103. But this emphasis may be misplaced. The question of the copyrightability of a derivative work ("a work based upon one or more preexisting works, such as a[n] ... art reproduction ... or any other form in which a work may be recast, transformed, or adapted," 17 U.S.C. Sec. 101) usually arises in connection with something either made by the owner (or a licensee) of the copyright on the underlying work, as in Durham Industries, Inc. v. Tomy Corp., 630 F.2d 905, 909 (2d Cir.1980), or derived from an underlying work that is in the public domain, as in L. Batlin & Son, Inc. v. Snyder, 536 F.2d 486, 491-92 (2d Cir.1976) (en banc). At issue in such a case is not the right to copy the underlying work but whether there is enough difference between the derivative and the underlying work to satisfy the statutory requirement of originality, see 17 U.S.C. Sec. 102(a), and thus make the derivative work copyrightable. Since the copyright owner's bundle of exclusive rights includes the right "to prepare derivative works based upon the copyrighted work," 17 U.S.C. Sec. 106(2), even if Miss Gracen's painting and drawings had enough originality to be copyrightable as derivative works she could not copyright them unless she had authority to use copyrighted materials from the movie. "[P]rotection for a work employing preexisting material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully." 17 U.S.C. Sec. 103(a).

Miss Gracen does not claim that she painted the 16-year-old Judy Garland who appeared in "The Wizard of Oz" in 1939 from life or from photographs taken from the movie, or that her painting is not of Judy Garland but is an imaginative conception of the character Dorothy. The painting was based on the movie, both as independently recollected by Miss Gracen and as frozen in the still photographs that Bradford supplied her. As with any painting there was an admixture of the painter's creativity--how much we shall consider later--but that it is a painting of Judy Garland as she appears in photographs from the movie (such as the photograph reproduced at the end of this opinion as Figure 2), and is therefore a derivative work, is beyond question. The same is true of the drawings.

Therefore, if Miss Gracen had no authority to make derivative works from the movie, she could not copyright the painting and drawings, and she infringed MGM's copyright by displaying them publicly. But obviously she had some authority, having been invited by Bradford to make a painting of Dorothy based on the movie. And although Bradford was not expressly authorized to sublicense the copyright in this way, there can be no serious doubt of its authority to do so. Thus the question is not whether Miss Gracen was licensed to make a derivative work but whether she was also licensed to exhibit the painting and to copyright it.

Bradford made no written agreement with the contestants for the disposition of their paintings. It could have required each contestant to give it full rights as consideration for $200 and a shot at a potentially lucrative contract, but it did not do so, not in writing anyway, and though it argues that it "bought" Miss Gracen's painting of Dorothy for $200 we find no evidence to support this characterization of the transaction. Miss Gracen testified in her deposition that Foster, who was in charge of the contest, said he would return the painting to her; and we must ask what he thought she would do with the...