1. Neither a copyrighted design or a trademark needs any symbol to be protected and protectible. This Shutterfly app could be like others such as Pinterest that are allowing their users to violate copyrights that belong to others, and may not have the protection of the DMCA.
2. Just because a customer submits a photo doesn't mean they own the rigts to it, and everyone in the chain of commerce can be liable for copyreight infringement. There are tons of people on the internet who mistakenly think that becauses something's online, and/or because "ewverybody's doing it," it must be "public domian" ---not true, most things on the internet are owned by someone and are protected, whether or not they ahve a copyright notice or a TM or R symbol.
If you work for customers and they contractually agree to indemnify you for any infringements involved in work for them, and they can't actually afford to indemnify you, then that indemnification is meaningless, so you do need to care about whether they're actually the owner of the IP they say they own.
Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to any follow-up comments. If you want to hire me, please contact me. Otherwise, please don't expect a further response. We need an actual written agreement to form an attorney-client relationship. I'm only licensed in CA and you shouldn't rely on this answer, since each state has different laws, each situation is fact specific, and it's impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue.
In addition to the response of Ms. Koslyn, copying may constitute unfair competition under the state laws of many states. As a general guidance, "copying" means you are risking infringement. Use your creativity: it's better for business and less risky in law. In fact, the reason you posted on Avvo is that you sense that "copying "is risky business.
The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
As attorney Koslyn recommended, read carefully the Shutterfly terms of service, and if you propose to do real business, confidentially consult an attorney experienced in copyright and the law of unfair competition.
Beware that the rules of copyright are counterintuitive. Before 1989, if a work didn't include a copyright notice, then it prpbably wasn't protected by copyright. But then the U.S. harmonized its law with the rest of the world, and so any works of authorship created since then automatically are copyrighted, even if there isn't an accompanying (c) notice.
This posting is intended for general education and isn't "legal advice." It doesn't create or evidence an attorney-client relationship. You are encouraged to engage an attorney in the pertinent jurisdiction for confidential legal advice on matters of any importance.
That is not necessarily the right question to ask. The question may be "What will Shutterfly do?"
If they register their designs (or already done so) they have the option of suing you for copyright infringement and foregoing statutory damages. Can you afford to take on Shutterfly in a copyright suit that might cost $50,000 -$500,000. Didn't think so. That's why it is better to be original and not take this sort of shortcut.
You need to see an IP lawyer, and if you have not done so yet, also a business lawyer as it appears you need both practical and legal business advice before you get in over your head.
So far, this is free to you. Until you pay a fee, I am not your lawyer and you are not my client, so you take any free advice at your sole risk. I am licensed in IL, MO, TX and am a Reg. Pat. Atty. so advice in any other jurisdiction is general advice and should be confirmed with an attorney licensed in that jurisdiction.