e.g If a video game has over 100 characters, all based on public domain characters (those from old literature, folklore, etc.), can another game have almost exactly these amount of characters, with most of them being characters featured in the previous game? (Assuming the characters are based on the original public domain characters and not the specific versions of that game)
Are derivatives of public domain settings less distinctive than of copyright-protected ones?
Maybe, but without more detail, the legal relevance of this fact is unclear.
If a work is independently created, it is not a derivative work
Assuming the characters are based on the original public domain characters and not the specific versions of that game
If a second work is not based on the first work, then the second is not a derivative of the first.
See the definition in 17 U.S.C. § 101:
A “derivative work” is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.
Independent creation of a work, based on public-domain material, will not be a derivative work of some other work also created in the mean time.
Copyright protection for any derivative would be limited in any case
The copyright in a derivative work covers only the additions, changes, or other new material appearing for the first time in the work. Protection does not extend to any preexisting material, that is, previously published or previously registered works or works in the public domain or owned by a third party.
Copyright does not work that way
Distinctiveness is not based on what your character is inspired by, but how it is executed. Let me describe to you a character that is public domain, and then one that is, in its execution, quite distinctive:
- A beardy guy with a belt he required to lift his hammer to control lightning, choleric, likes beer, and prone to going out on adventures. Also, married a giant while wearing drag and then killed every witness to get back his hammer, and made sure the most lovely woman would adopt the two cat cubs from a single dad-cat.
- A clean-shaven blonde beefcake clad in blue, black, and red, throwing a hammer, calling lightning from the sky, very generous, and a goody two shoes speaking in Shakespearean English.
Yes, those both are Thor. One is the Edda, the other is Marvel. They are both very distinctive and yet, they are different. And in fact, the character design of the Marvel-Thor is so different, that it is but for some small things, quite copyrightable as an artistic expression - and will be for quite some time because Jack Kirby only died in 1994, Stan Lee in 2017 and Larry Lieber is very much still alive.
To the law, these things matter:
- Is the character's expression under copyright? the Saga-Thor is older than paper, and thus isn't, so the inquiry stops here. But Marvel-Thor was created in 1962, and still has some copyright left in the tank in many jurisdictions, and in others, the clock isn't even ticking yet because Lieber is still alive.
- Is the inspired character a carbon copy, heavily inspired (derivative work), or substantially different? If my Thor is more a beardy guy with a potbelly and a hammer-engraved shotgun throwing lightning who is constantly on the hunt for wolves, then that is very much different from the Marvel-Thor and even Saga-Thor, even if all share common traits and a name.
- Is my use of your character Fair Use or Fair Dealing, such as to deconstruct it in a parody? For example, if I took a lot of the Marvel-Thor look-and-feel and told a story that deconstructs the whole Superhero genre, that's Parody.
So, in theory, you and me could both make a game that uses out-of-copyright characters and depict them as in that media and neither can sue the other. Both of us can use Saga-Thor. But if you use the Potbelly-Wolfhunter-Thor I described above, you'd possibly infringe on the copyrights that I have in the changes and expression of my Thor.