U.S. Supreme Court to Take Up Important “Fair Use” Case

By: Steve Schaetzel and Steve Philbin

On October 12, the Supreme Court heard arguments in an important copyright fair use case:  Andy Warhol Found for the Visual Arts, Inc. v. Lynn Goldsmith and Lynn Goldsmith Ltd.  If nothing else, this case demonstrates just how difficult it can be to apply the four statutory fair use factors, particularly the “transformative” inquiry in the first factor.  MCC is watching this case closely and will report again once the Court decides, as it will undoubtedly influence copyright law for years to come.

The Fair Use Analysis

The fair use “limitation” is set out straightforwardly in the Copyright Statute, 17 U.S.C. § 107:

107. Limitations on exclusive rights: Fair use

[T]he fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

Thus, a “fair use” is not copyright infringement.  But the party asserting this limitation bears the burden of establishing that their use is a “fair use.”

Applying the four factors can be perplexing to even the most sophisticated copyright expert.  The task arguably became even more complicated after the 1994 decision Campbell v. Acuff-Rose Music, Inc. 510 U.S. 569, where the Supreme Court introduced and emphasized the importance of “transformative” uses as a part of the first factor.  That case involved a rap parody song by 2 Live Crew of Roy Orbison’s classic “Pretty Woman.” Based on its application of the four factors, the District Court found no infringement – the use was fair. The Sixth Circuit reversed, stating that every commercial use was presumptively unfair (based on Supreme Court precedent[1]).  The Sixth Circuit further stated that the fourth factor (market harm) was the most important, and that market harm was presumed based on the presumption attaching to commercial use.  The Supreme Court (Souter) reversed, holding that commercial use was only one element of the first factor to be considered and that the more “transformative” the use, the less significance would be accorded to other three factors.  The Supreme Court also dispelled the notion of a presumption of harm (except possibly in a case of mere duplication for commercial purposes.)  Importantly, since 2 Live Crew, the “transformative” analytical effect has grown.  Some argue that it has become too strong, sometimes overwhelming the other three factors.

The Goldsmith/Warhol Background

In 1981 Lynn Goldsmith, a respected and known photographer, took eleven photographs of the musician Prince at her New York city studio.  Her photos were not published.  In 1984, Goldsmith’s studio licensed one photo to Vanity Fair to be used as an “artist’s reference” for an illustration that would be published twice in the magazine.  Unbeknownst to her, that artist was Andy Warhol.  In addition to using Goldsmith’s photo to create a silk screen work for the magazine, Warhol created fifteen other silk screen prints and pencil drawings of Prince.  Warhol entitled these works the “Prince Series,” and his foundation commercialized (and displayed) various works from the “Prince Series.”  Vanity Fair published one of the “Prince Series” silk screen prints in connection with an article about Prince shortly after his death.

The Goldsmith photograph and the Warhol print published in Vanity Fair are as follows:

Goldsmith subsequently learned of the Vanity Fair article and contacted the Warhol Foundation.  She claimed that Warhol had infringed her copyright in the original photo.  The Foundation filed a declaratory judgment action, asserting that it was threatened with an infringement claim and that there was no infringement because the Warhol print was not substantially similar to the Goldsmith photograph or, alternatively, that Warhol’s use of the photograph was “fair use.”

The Decisions Below

On a motion for summary judgment, the District Court ruled for Warhol – the use was fair.  Respected Judge John Koeltl, a graduate of Georgetown and Harvard, held that while Goldsmith had shown Prince as “not a comfortable person,” Warhol had transformed her work to something new, where Prince’s humanity was eliminated:

[Warhol] can reasonably be perceived… to have transformed Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure. The humanity Prince embodies in Goldsmith’s photograph is gone. Moreover, each Prince Series work is immediately recognizable as a ‘Warhol’ rather than as a photograph of Prince—in the same way that Warhol’s famous representations of Marilyn Monroe and Mao are recognizable as ‘Warhols,’ not as realistic photographs of those persons. … [The Warhol series] add[s] something new to the world of art and the public would be deprived of this contribution if the works could not be distributed.

Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 382 F. Supp. 3d 312, 326 (S.D.N.Y. 2019). The District Court found that the Prince Series works were readily recognized as Warhol’s, and that the nature (in the sense of meaning or message) of the original work had been changed.

In so ruling, Judge Koeltl seemed to be relying on established Second Circuit case law, namely – Cariou v. Prince, 714 F. 3d 694 (2d Cir. 2013), which held that certain changes to a collection of photographs were fair use.  Celebrity artist Richard Prince had taken photos from Patrick Cariou’s book “Yes, Rasta,” transferred them to canvas and selectively placed various images onto the Cariou photos.  Of 30 such works, the Second Circuit found 5 to be infringements, and 25 to constitute “fair use.”  The Second Circuit has expressly recognized that the Cariou case may have been a “high water” mark for transformativeness.[2]  Judge Koeltl similarly found the Warhol works to be transformative and a fair use.

The Second Circuit reversed, ruling that the Cariou transformative ruling had been improperly applied by Judge Koeltl as a “bright line” test.  The Second Circuit instead found that each of the four factors weighed against fair use.  The use was commercial and not transformative because the secondary work (Warhol) remained as “the recognizable foundation upon which the Prince Series is built;” “borrowed significantly [from Goldsmith], both quantitatively and qualitatively:” and “pose[d] cognizable harm” to Goldsmith’s licensing market.  The Second Circuit expressly found that differences in meaning should not be analyzed in the fair use determination (at least in this case of photographs).

Interestingly, the Second Circuit addressed the difference between transformative fair use and an author’s exclusive right to make a “derivative work” from the original: “[A]n overly liberal standard of transformative, such as that applied by the district court in this case, risks crowding out statutory protections for derivative works.” 992 F. 3d at 111.  The Court continued: “[T]he secondary work’s transformative purpose and character must, at bare minimum, comprise something more than the imposition of another’s artistic style on the primary work such that the secondary work remains both recognizably deriving from, and retaining the essential elements of its source material.” 992 F. 3d at 114.  The Warhol Foundation sought and obtained review by the Supreme Court.

MCC Comment

It is difficult to reconcile Cariou and Warhol, but the Supreme Court will try to do just that.

On the one hand, the Cariou decision demonstrates that a substantial taking may be had of a photograph, without fear of infringement, so long as the original work was transformed into a new “thing” that had a different message, meaning or purpose.  By comparison, in the recent case of Google v. Oracle, (141 S. Ct. 1163 (2021)), the Supreme Court expressly relied on Google’s use of the Sun Java code (which the Court presumed to be copyrightable) “to create new products [and] to expand the use and usefulness of Android-based smartphones.”  That use was deemed “transformative” and ultimately found to be fair because the subject code elements (API’s) could be reimplemented to “further the development of computer programs.”

In similar fashion outside of the computer program context, should a Court not consider the nature of a secondary work (i.e., its meaning or message) to determine whether that secondary work is transformative?  Campbell stated that a transformative work “adds something new, with a further purpose or different character, altering the first with new expressive meaning or message.”  510 U.S. at 579.  Didn’t Warhol “further purpose” or add something new by eliminating Prince’s humanity to create a new expressive meaning?  If Richard Prince’s “appropriation art” was fair use because he changed Carious’s meaning, didn’t Warhol do the same?[3] Or is the interpretation of “meaning” and/or “message” in this case just too subjective for a judge or jury to reliably apply, particularly where the reasonable viewer may simply see a picture of Prince?

On the other hand, hasn’t the transformative pendulum swung too far, where it effectively consumes analysis of not only the first fair use factor (the purpose and character of the use) but the other three factors as well?  Once the District Court found Warhol’s prints and line drawings to be transformative, the analysis was effectively complete.  In fact, as noted in the concurring Second Circuit opinion in Warhol, 94% of decisions that find a transformative use result in a finding of fair use.  Are courts failing to truly evaluate the first factor in favor of considering “how much” is enough in order for a secondary work to be deemed “transformative,” even when that word is not in the statute?  Was any such void (in the first factor analysis) filled by the Second Circuit’s detailed review of each factor?

The Supreme Court of course has many different options. One approach may be to focus on the fourth factor, which is the market (and potential market) for the original work.  In Campbell, the Court was convinced that 2 Live Crew’s use of Roy Orbison’s “Pretty Woman” song was not hurting the actual market or potential market for the original song. The market interested in a rap parody may likely not be interested in Orbison’s sappy ode.  In Cariou, it would seem to be the same.  The book Yes, Rasta was out of print and had only enjoyed sales of $8,000.  Richard Prince’s use of photos from that book arguably did not impact the market or the potential market for Cariou’s original photographs. But here, there seems to be a stronger tie between the Goldsmith photo and Warhol’s use.  Goldsmith’s Prince photo was already wanted by Vanity Fair; she was already in that “market,” so to speak. Even if deemed transformative, Warhol’s use was “commercial” (still a key first factor consideration) and Goldsmith was trying to exploit the magazine market (even if “market” is defined narrowly by use as an “artists’ reference”).

Still further, is there an inherent issue in the fourth factor?  An alleged infringement may arguably mean that there is a market for licensing (i.e., the alleged infringer could seek to exploit it), unless the use is fair.  So, whether there is harm to a potential market for the original work depend on whether there is actually a fair use, and whether a potentially infringing use is fair use may depend on whether there is a potential market for the primary work.  The Supreme Court may have to determine the age-old question of which came first: the chicken or the egg?

It will be interesting to see if the Supreme Court dials back the transformative doctrine and decides that Cariou was a flood rather than merely a high-water mark.

[1] Sony Corporation of America v. Universal City Studios, Inc., 464 U.S. 417, 451 (1984).

[2]  Example “appropriation art” – Cariou photograph (right) and Richard Prince’s transformation:

[3] The Supreme Court declined to accept certiorari in the Cariou case.