I have an image (let\'s call it original image) on which I want to watermark another image (let\'s call it logo).
The logo is a transparent PN
imagecopy does not support using two images with alpha channels. take a look at imagecopymerge.
http://php.net/manual/en/function.imagecopymerge.php
There are plenty examples in the user comments sections, and a finished implementation for what you want:
http://www.php.net/manual/en/function.imagecopymerge.php#92787