The transformation, modification or adaptation of the work must be substantial and bear its author's personality sufficiently to be original and thus protected by copyright.
Titles, short phrases, and format, for example, are not copyrightable.The statutory definition is incomplete and the concept of derivative work must be understood with reference to explanatory case law.
However, it was overturned in 2013[6] based on the conclusion that the case did not fall within the General Court's jurisdiction, after concluding that the dispute had been of a contractual nature, instead of a non-contractual one.
336, 2002 SCC 34, the Supreme Court of Canada clarified the statutory recognition of derivative works extended only to circumstances where there was production and multiplication, i.e. reproduction.
Derivative works represent the majority of the human cultural, scientific and technological heritage, as exemplified by the proverb about "standing on the shoulders of giants.
"[9] The number of derivative works has been adversely impacted by the introduction of the copyright law, which made them illegal in numerous circumstances, and positively by the spread of the copyleft ethos in the late 20th and early 21st century.
Shortly thereafter, another company, L. Batlin & Sons, Inc., also began making a very similar toy bank which was based on Snyder's version (and not, incidentally, on the 19th century original).
Much of this decision focused on the fact that nearly all of the alterations in Snyder's version were made solely to allow the object to be more easily manufactured in plastic rather than metal, and therefore were functional, not artistic or creative.
[15][16] "To extend copyrightability to minuscule variations would simply put a weapon for harassment in the hands of mischievous copiers intent on appropriating and monopolizing public domain work."
The court said that "the only aspects of Tomy's Disney figures entitled to copyright protection are the non-trivial, original features, if any, contributed by the author or creator of these derivative works."
But Tomy's toys reflected "no independent creation, no distinguishable variation from preexisting works, nothing recognizably the author's own contribution that sets Tomy's figures apart from the prototypical Mickey, Donald, and Pluto, authored by Disney and subsequently represented by Disney or its licensees in a seemingly limitless variety of forms and media."
[citation needed] In both of these cases, the defendants were held not to be liable for copyright infringement, even though they presumably copied a considerable amount from the plaintiff's work.
For example, pictures from greeting cards might be affixed to tiles or one kind of textile product might be turned into another that can be sold at a higher price.
Co., (the Annie Lee case), the defendant affixed the copyright owner's copyright-protected note cards and small lithographs to tiles and then resold them.
The court held that this act was not original and creative enough to rise to the level of creating a derivative work, but effectively similar to any other form of display or art frame.
It is broader than that right, however, in the sense that reproduction requires fixation in copies or phonorecords, whereas the preparation of a derivative work, such as a ballet, pantomime, or improvised performance, may be an infringement even though nothing is ever fixed in tangible form.
For example, in Campbell v. Acuff-Rose Music, Inc., the Supreme Court found that although a parody of the song "Oh, Pretty Woman" by 2 Live Crew was an unauthorized derivative work, fair use was still available as a complete defense.
This case marked the Supreme Court's pointing to transformativeness as a major clue to application of the fair use defense to derivative works.
Sega and Nintendo sought to "license" access to their hardware platforms, and each company developed software "locks" to keep out cartridges that did not have the proper "key."
The court held that Sega was trying to use the copyright in its computer code to maintain a monopoly over the sale of video games, to which it was not legally entitled.
"[27] However, since the passage of the anti-circumvention statutes contained in the DMCA, further court cases involving the fair-use defense of such activities have yet[citation needed] to be actually litigated.
A crucial factor in current legal analysis of derivative works is transformativeness, largely as a result of the Supreme Court's 1994 decision in Campbell v. Acuff-Rose Music, Inc.
The Court's opinion emphasized the importance of transformativeness in its fair use analysis of the parody of "Oh, Pretty Woman" involved in the Campbell case.
In parody, as the Court explained, the transformativeness is the new insight that readers, listeners, or viewers gain from the parodic treatment of the original work.
...[If] the secondary use adds value to the original--if the quoted matter is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings--this is the very type of activity that the fair use doctrine intends to protect for the enrichment of society.
In such cases, as illustrated by Kelly v. Arriba Soft Corporation[29] and Perfect 10, Inc. v. Amazon.com, Inc.,[30] the courts find a use (such as that of thumbnails in an image search engine, for indexing purposes) transformative because it provides an added benefit to the public, which was not previously available and might remain unavailable without the derivative or secondary use.
In an analogous area of copyright law, a solution reached was to permit the use challenged as infringement, but to require payment of a reasonable royalty.
Thus it has been said that the "transformation of a cult icon into an object of ridicule by adding a small quantum of additional material can readily be deemed preparation of a derivative work.
The mockery of "Oh, Pretty Woman," discussed in Campbell v. Acuff-Rose Music, Inc., is a similar example of transforming a work by showing it in a harsh new light or criticizing its underlying assumptions.
A 2007 lawsuit, CBS Operations v. Reel Funds International, ruled that television series that have some episodes lapse into the public domain can be classified as derivative works and subject to indirect copyright accordingly.