1) There is an exclusive right of an original author to prepare (authorize) a derivative work. This is granted under section 106(2) of the Copyright Act.
2) Two distinct exclusive copyrights exist in an authorized derivative work. The "preexisting" author's copyright in the material which will form the basis for the derivative work and the "modifying" author's new copyright in his contributed modifying material. This arises from section 103(b) of the Copyright Act.
The Copyright Act does not speak to the question of "ownership"
of derivative works as a whole. This ownership question is
left to the two authors to decide. If they cannot mutually
agree concerning permission on the topic of distribution
of the work as a whole there exists a stalemate. This
is stalemate because each author has mutually "exclusive"
rights in the work.
3) The act of authorizing a derivative work does not imply permission to copy and distribute the original authorizing authors "preexisting" material. This copying and distribution right stems from section 106(3) which is a separable right, distinct from authorization.
4) The modifying author has exclusive rights in his newly created "contributed" material equivalent in nature to the "preexisting" authors rights. These rights do not extend in scope to the "preexisting" author's material.
5) To distribute an authorized derivative work you must have permission from each author for the right's granted under section 106(3) to them. One permission for the "preexisting" author's material and one permission for the "modifying" author's material.
6) When you have two disjoint, mutually exclusive awards of copyrights the only way to secure both permissions under section 106(3) is by way of a mutually binding agreement of both authors for waiver of their exclusive rights. It is not possible to do this with a "unilateral permission" from just one author.
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