Annie Lee v. A.R.T. Company
125 F.3d 580 (7
Annie Lee creates works of art, which she sells through her firm Annie Lee & Friends. Deck the
Walls, a chain of outlets for modestly priced art, is among the buyers of her works, which have been
registered with the Register of Copyrights. One Deck the Walls store sold some of Lee's notecards
and small lithographs to A.R.T. Company, which mounted the works on ceramic tiles (covering the
art with transparent epoxy resin in the process) and resold the tiles. Lee contends that these tiles are
derivative works, which under
17 U.S.C. § 106(2)
may not be prepared without the permission of
the copyright proprietor. She seeks both monetary and injunctive relief. Her position has the support
of two cases holding that A.R.T.'s business violates the copyright laws.
Munoz v. Albuquerque
A.R.T. Co., 38 F.3d 1218 (9th Cir. 1994)
, affirming without published opinion
829 F. Supp. 309 (D.
Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d 1341 (9th Cir. 1988)
, the only full appellate discussion, dealt with pages cut from books and mounted on
tiles; the court of appeals' brief order in Muoz concludes that the reasoning of
equally applicable to works
[*581] of art that were sold loose. Our district court disagreed with
these decisions and entered summary judgment for the defendant.
925 F. Supp. 576 (N.D. Ill.
Now one might suppose that this is an open and shut case under the doctrine of first sale, codi-
17 U.S.C. § 109(a)
. A.R.T. bought the work legitimately, mounted it on a tile, and resold
what it had purchased. Because the artist could capture the value of her art's contribution to the fin-
ished product as part of the price for the original transaction, the economic rationale for protecting
an adaptation as "derivative" is absent. See William M. Landes & Richard A. Posner,
Analysis of Copyright Law
, 17 J. Legal Studies 325, 353-57 (1989). An alteration that includes (or
consumes) a complete copy of the original lacks economic significance. One work changes hands
multiple times, exactly what
permits, so it may lack legal significance too. But
creates a separate exclusive right, to "prepare derivative works", and Lee believes that affixing the
art to the tile is "preparation," so that A.R.T. would have violated
even if it had dumped
the finished tiles into the Marianas Trench. For the sake of argument we assume that this is so and
ask whether card-on-a-tile is a "derivative work" in the first place.
"Derivative work" is a defined term: