Let $X$ be a compact Riemann surface, $Y$ a smooth complex variety and $\pi : X \times Y \rightarrow Y$ the projection. Given a line bundle $L$ on $X \times Y$ which restricts to the trivial bundle on the fibers of $\pi$, can one say that $L$ is the pull-back of a line bundle on $Y$? If not, are there additional conditions that make this true?
Thanks!
This is basically the content of Hartshorne exercise III.12.4:
The key result here is (a corollary to) the semicontinuity theorem:
So applying this to our situation at hand, we may see that the pushforwards of your line bundle trivial on the fibers is again a line bundle on the target. After some messing about with pushforwards and pullbacks (see here, for instance), one may see that your line bundle trivial on the fibers is indeed the pullback of a line bundle on $Y$.