Derivative work refers to a copyrighted work that comes from another copyrighted work. Copyrights allow their owners to decide how their works can be used, including creating new derivative works off of the original product. Derivative works can be created with the permission of the copyright owner or from works in the public domain. In order to receive copyright protection, a derivative work must add a sufficient amount of change to the original work. This distinction varies based on the type of work. For some works, just translating the work into another language will suffice while others may require a new medium. Overall, one cannot simply change a few words in a written work for example to create a derivative work; one must substantially change the content of the work. Along the same lines, a work must incorporate enough of the original work that it obviously stems from the original.
The copyright for the derivative work only covers the additions or changes to the original work, not the original itself. The owner of the original work retains control over the work, and in many circumstances can withdraw the license given to someone to create derivative works. However, once someone has a derivative work copyrighted, they retain their ownership of the derivative copyright even if their license to create new derivative works ends.
See 17 U.S.C. §101
[Last updated in February of 2022 by the Wex Definitions Team]