May 17, 2022 | By David Clark
A fundamental feature of U.S. copyright law is the ability for the public to make “fair use” of copyrighted works. A recent case involving Prince and Andy Warhol is now before the United States Supreme Court and will address how “transformative” such uses must be to constitute a fair use of an artistic work.
On Monday, March 28, 2022, the United States Supreme Court agreed to hear the appeal of a copyright case involving Prince and Andy Warhol, Andy Warhol Foundation for Visual Arts, Inc. v. Goldsmith. Even in death, Prince remains a lightning rod for contemporary copyright issues. This dispute concerns a series of works by Warhol which repurposed a photograph of the musician. The original work is a photograph of Prince taken by Lynn Goldsmith in 1981. In 1984, Goldsmith’s agency provided a limited use license of the image to Vanity Fair magazine. Under this “artist reference” license, Warhol modified the original photograph for use on a Vanity Fair magazine cover. Between 1981 and 1984, Prince’s pop culture status grew substantially, inherently increasing the commercial value of Goldsmith’s photograph.
The legal conflict exists because Warhol purportedly exceeded the scope of that license and created an additional fifteen works from the same Goldsmith photograph, without her knowledge. After Prince’s untimely death in 2016, Goldsmith learned about Warhol’s unauthorized uses of her photograph. After Warhol’s own death in 1987, the rights to his works passed to his foundation. Goldsmith therefore notified the Andy Warhol Foundation about her copyright in the 1981 photograph. AWF promptly filed a lawsuit seeking a declaration that Warhol’s works were not infringing or, alternatively, that they were “transformative” works that made fair use of the original Goldsmith photograph.
In 2019, the United States Southern District Court found in AWF’s favor. However, after an appeal, in 2021, the Second Circuit Court of Appeals reversed the ruling and held that Warhol’s uses were not “fair use,” and that the Prince Series works were “substantially similar” to Goldsmith’s original photograph. The appellate court determined the Warhol pieces are not transformative works. See generally 11 F.4th 26 (2d Cir. 2021). After granting AWF’s petition, the case is now before the Supreme Court during its 2022-23 docket.
The Goldsmith case reflects an ongoing conflict in copyright law: where to strike the balance between a copyright owner’s exclusive right to create derivative works with the public’s right to create “fair uses” of a copyrighted work if the secondary work is sufficiently transformative.
The U.S. Copyright Act, 17 U.S.C. § 106(2), provides that a copyright owner has the exclusive right “to prepare derivative works based upon the copyrighted work.” This means that the owner of a copyright in a photograph maintains the exclusive right to use that copyright in other mediums. For example, the copyright owner can prevent others from reprinting the photograph on a t-shirt and selling it to the public. Derivative works are an essential part of the suite of rights granted by a copyright. However, these exclusive rights are not unlimited.
In direct opposition to these exclusive rights are “fair use” rights. “Fair use” is expressly codified as a limitation on a copyright owner’s exclusive rights. Pursuant to 17 U.S.C. § 107, when used “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research,” such uses are not infringements of copyright and are protected by law. Whether a particular use constitutes a “fair use” is a fact-intensive analysis which can vary substantially on a case-by-case basis.
To assist in determining whether a particular use is “fair,” the copyright statute provides four considerations: (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. These are to be considered in totality, whereby no single factor is necessarily dispositive.
Warhol’s use of Goldsmith’s photograph provides a classic example of this tension between exclusive rights and “fair use” rights. The district court determined that the “fair use” factors favored AWF as a matter of law because the purpose and character of the Prince Series was “transformative” in that it portrayed Prince in a different light than what was intended by Goldsmith in her original photograph. Whereas Goldsmith sought to frame Prince (in 1981) as a “vulnerable human being,” the Warhol works (in 1984) portrayed Prince as an “iconic, larger-than-life figure.” The district court held that this was transformative, and thus, a fair use of the Goldsmith photograph.
The Second Circuit’s reversal heavily criticized the district court’s “transformative” analysis. The appellate decision found that to be sufficiently transformative, a secondary work must demonstrate a “fundamentally different and new” artistic purpose and character. A side-by-side comparison of the Goldsmith photograph next to the Warhol works demonstrated to this court that the purpose and function of the two works was “identical, not merely in the broad sense that they are created as works of visual art, but also in the narrow but essential sense that they are portraits of the same person.” The Second Circuit found that the Warhol works failed to transform them from the original. The Prince Series therefore “retains the essential elements of its source material.” As a result, this could not be a fair use under the Copyright Act.
The Supreme Court’s decision in 2023 may reset decades of precedent for applying the statutory fair use factors. The Second Circuit cautioned that there should not be “bright-line” rules for assessing fair use, but both the copyright owner and the public require reasonable guidelines for how to approach the creation of secondary works. There must be a workable legal framework that allows both sides to confidently decipher what constitutes a substantially similar infringement, and what constitutes a fair use of the same work.
There will always be grey areas in copyright law, but as demonstrated by the Second Circuit’s analysis in Goldsmith, the current “transformative” work standards are murky and fraught with peril. It leads to expensive fact disputes and protracted litigation. This undermines the purpose of the Copyright Act. It further threatens the viability of an artist’s business interests. While Prince and Warhol were no strangers to legal disputes, many content creators lack the same resources and access to legal counsel. Not surprisingly, many legal scholars submitted amicus briefs to the Second Circuit while the court considered the appeal. These facts and the continuing conflict in statutory rights is most likely why the Supreme Court granted certiorari and agreed to hear the case.
About David L. Clark
Attorney David L. Clark is Senior Counsel in the Houston office of McCathern. Mr. Clark’s focuses his legal practice on Business & Commercial Litigation, Business Disputes, Civil Litigation, Media & Entertainment, and Intellectual Property for a wide range of clients. He also has experience with a wide array of commercial matters, including litigation concerning breach of contract, non-competition clauses, confidentiality and non-disclosure agreements, employment disputes, unfair competition, tortious interference, ERISA claims, products liability claims, oil and gas disputes, and OSHA investigations. He is also well-versed in IP matters involving trademarks, copyrights, and trade secrets.