## Facts

- Annie Lee, an artist, sold notecards and small lithographs through her company.
- A retail chain purchased Lee’s works and resold them; A.R.T. Co. acquired some of these lawfully made copies from a retail store.
- A.R.T. mounted the purchased cards and lithographs on ceramic tiles and covered them with transparent epoxy resin.
- A.R.T. resold the tiled items as decorative objects.
- Lee claimed the tiled items were unauthorized “derivative works” and sought injunctive and monetary relief.
- The district court granted summary judgment for A.R.T., and Lee appealed.

## Issues

1. Whether mounting lawfully purchased copies of copyrighted art on ceramic tiles and coating them with resin creates an infringing “derivative work” under 17 U.S.C. §§ 101 and 106(2).
2. Whether the first-sale doctrine, 17 U.S.C. § 109(a), permits resale of the altered physical embodiment when the copyrighted expression in the copy is not recast, transformed, or adapted.
3. Whether the Visual Artists Rights Act (VARA), 17 U.S.C. § 106A, provides relief for the mounting and resin coating of Lee’s notecards and lithographs.

## Decision

- The Seventh Circuit affirmed summary judgment for A.R.T.
- Mounting and coating the lawfully acquired copies did not create a “derivative work” within the statutory definition.
- Because A.R.T. owned lawful copies, resale of those copies as mounted tiles was permitted under the first-sale doctrine.
- VARA did not apply because the works at issue did not fall within VARA’s protected categories, and VARA did not change the outcome.

## Legal Principles

- A “derivative work” requires recasting, transforming, or adapting the preexisting work in a way that entails original expressive authorship; purely physical alteration of a lawful copy, without changing the protected expression, is insufficient.
- The first-sale doctrine permits the owner of a lawfully made copy to dispose of that copy, including resale, even if the owner alters the copy’s physical presentation, so long as no exclusive right (such as reproduction) is infringed.
- Mounting existing art on a new backing and encapsulating it can be treated as a method of display rather than creation of a new expressive work.
- VARA applies only to statutorily defined “works of visual art” and does not extend moral-rights protection to mass-produced commercial reproductions such as notecards and small lithographs.

## Conclusion

The court held that A.R.T.’s practice of mounting lawfully purchased notecards and lithographs on ceramic tiles and reselling them did not infringe Lee’s derivative-work right because it did not create a new work of authorship, and the first-sale doctrine allowed resale of the altered physical copies; VARA provided no additional basis for relief.


Lee v. A.R.T. Co., 125 F.3d 580 (7th Cir. 1997)