In the 1994 case Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), the Supreme Court of the United States held that 2 Live Crew’s unlicensed incorporation of significant portions of Roy Orbison’s copyrighted song, “Oh, Pretty Woman,” into 2 Live Crew’s “Pretty Woman” song could be a fair use under the Copyright Act, even though 2 Live Crew sold its song for profit. 

               

               

In Campbell, the Supreme Court applied the four factors set forth in the Copyright Act for a fair-use analysis: (1) the purpose and character of the use, (2) the nature of the copyrighted work, (3) the amount or substantiality of the portion used, and (4) the effect of the use on the potential market for or value of the work. 17 U.S.C. § 107. In applying these four factors, the Supreme Court stated that “the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works” and “the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.” Concluding that listeners could understand the 2 Live Crew song as a parody, and that creating the parody required substantial borrowing from Orbison’s original, the Supreme Court held that 2 Live Crew’s song could be fair use under the Copyright Act.

Since Campbell, federal courts have increasingly relied on the “transformative” nature of an allegedly infringing work to rule that the fair-use defense applies. The pre-Campbell notion that any “commercial” use of a copyrighted work was “presumptively unfair” soon gave way to a post-Campbell notion that “transformative” works were “presumptively fair”—regardless of whether the accused works were commercial in nature or not.

           

The rise of the “transformative-use” test set copyright’s fair-use jurisprudence onto an inevitable collision course with the works of the famous artist Andy Warhol. Warhol’s works, especially his silk-screen collections, used third-party photographs (often without permission) to create new visual works art that many believe directly infringe the copyrights in the original photographs:



This collision finally occurred in 2017, when The Andy Warhol Foundation for the Visual Arts, Inc. filed suit seeking a declaratory judgment that none of the sixteen works in Warhol’s “Prince Series” infringe the copyright in a 1981 photograph of Prince taken by acclaimed photographer Lynn Goldsmith.
 

Factual Background

Lynn Goldsmith is a world-renowned photographer who is particularly known for her photographs of musicians. In 1981, Goldsmith took several photographs of Prince for Newsweek magazine. Newsweek later published one of these photographs in an article about Prince. Between 1981 and 2016, Goldsmith’s various photographs of Prince appeared on or between the covers of People, Readers Digest, Guitar World, and Musician magazines.

In 1984, Vanity Fair sought to license one of Goldsmith’s Prince photographs for use as an “artist reference” to help illustrate an article about Prince. Goldsmith agreed to license the work to Vanity Fair, but only on the condition that the use of her photograph was for “one time” only. Vanity Fair then hired Andy Warhol to use the Goldsmith image as the basis for an illustration in Warhol’s signature style. As requested, Warhol made a silkscreen using Goldsmith’s photo, and Vanity Fair published the resulting image alongside an article about Prince. The magazine credited Goldsmith for the “source photograph,” and paid her $400 for the license:

                       

Warhol, however, did not stop with the single image that Vanity Fair requested (and for which Vanity Fair had licensed Goldsmith’s photograph). Instead, Warhol created fifteen additional (and unlicensed) works based on Goldsmith’s 1981 Prince photograph:

                            

In 2016—more than three decades after Vanity Fair’s license from Goldsmith—the Andy Warhol Foundation licensed one of Warhol’s sixteen “Prince” works to Condé Nast, again for the purpose of illustrating a story about Prince. The Andy Warhol Foundation received $10,000 for the license to publish the image. Goldsmith received nothing.
 

The Lawsuit

After Goldsmith saw Warhol’s “Orange Prince” on the cover of Condé Nast’s special edition magazine, she notified the Andy Warhol Foundation of her belief that it had infringed her copyright. The Andy Warhol Foundation then sued Goldsmith and her agency for a declaratory judgment of noninfringement or, in the alternative, fair use. Goldsmith counterclaimed for infringement. The district court granted summary judgment for the Andy Warhol Foundation, finding a fair use because Andy Warhol’s sixteen silk-screen Prince works were “transformative” in that they “have a different character, give Goldsmith’s photograph a new expression, and employ new aesthetics with creative and communicative results distinct from Goldsmith’s.” Goldsmith appealed the decision and the Court of Appeals for the Second Circuit reversed, holding that all four fair use factors favored Goldsmith.  The Andy Warhol Foundation then appealed the case to the United States Supreme Court.

The Supreme Court accepted the case in order to address the narrow question of whether the first fair-use factor (i.e., “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes”) supported a finding that the Andy Warhol Foundation’s commercial licensing to Condé Nast was a fair use of Goldsmith’s 1981 photograph. The Supreme Court did not analyze or rule on the overall question of whether the creation or licensing of the unauthorized Warhol images infringed Goldsmith’s copyrights or, instead, were a fair use of her photograph. On the narrow question of whether the first fair-use factor favored Goldsmith or the Foundation in the context of the challenged commercial licensing of the Warhol image to Condé Nast, the Supreme Court agreed that the first fair-use factor favors Goldsmith, not the Andy Warhol Foundation, and weighed against a finding of fair use.

In support of its finding, the Supreme Court stated that “[a]lthough new expression may be relevant to whether a copying use has a sufficiently distinct purpose or character, it is not, without more, dispositive of the first factor.” “The degree of transformation required to make ‘transformative’ use of an original,” the Supreme Court stressed, “must go beyond that required to qualify as a derivative.” In other words, the new expression must, in the context of the challenged use, materially alter not just the meaning or message of the underlying work, but also the specific purpose for which the original work was used. 

Regarding the Warhol work, the Supreme Court found that the first fair-use factor favored Goldsmith based on a variety of circumstances. First, although though the Warhol work added “new expression” to Goldsmith’s photograph, the Court found that Goldsmith’s photograph and the Andy Warhol Foundation’s derivative work shared the same purpose, namely that both works were “portraits of Prince used to depict Prince in magazine stories about Prince.” The Court acknowledged that the purpose and use of Goldsmith’s photograph and Warhol’s works may differ in a more specific sense (one being a photorealistic image used to portray Prince, for example, as a vulnerable human being with a singular identity and the other being an exaggerated image used to portray Prince as an iconic, larger-than-life commodity), the Court found that “that degree of difference is not enough for the first factor to favor Andy Warhol Foundation, given the specific context of the use . . . illustrating a magazine about Prince with a portrait of Prince.”  In coming to this conclusion, the Court noted that the first fair-use factor’s consideration of whether an accused work is used for a different purpose than the copyrighted work is a matter of degree that courts must balance against the commercial nature of the use. Because the commercial nature of the specific complained-of use (the licensing of the Warhol work to Condé Nast) was not in dispute, and the Warhol illustration was used for substantially the same purpose of the Goldsmith photograph (on a magazine cover featuring a story about Prince), the Court held the first fair-use factor favored Goldsmith and a finding of infringement.

Notably, however, the Court “expresse[d] no opinion as to the creation, display, or sale of any of the original Prince Series works.” In fact, Justice Gorsuch, joined by Justice Jackson, wrote separately in a concurring opinion that “if the Foundation had sought to display Mr. Warhol’s image of Prince in a nonprofit museum or a for-profit book commenting on 20th-century art, the purpose and character of that use might well point to fair use.”

Effect of Goldsmith on Future Copyright Cases

The Goldsmith case makes two things clear. First, the addition of “new expression” alone is not sufficient to constitute a “transformative use,” even when the accused work’s “new expression” creates a new aesthetic, a new meaning, or a new message. Rather, the specific complained-of use of the secondary work must be for a sufficiently dissimilar purpose than that of the original work. Second, the commercial nature of a secondary use looms large when the purpose of the secondary use is similar to the purpose of the original work. While perhaps not as significant as the “commercial-use” presumption that dominated the fair-use analysis prior to the 1994 2 Live Crew decision, the Warhol decision moves the focus back in that direction. Accordingly, when considering copyright fair use going forward, creators and advocates will need to determine “the main or essential nature/purpose of the specific use of the secondary work” and distinguish it from the underlying work.  

Now that the Court has spoken (again) on the first factor of the fair-use analysis, it will be interesting to see how lower courts apply the decision and how doing so impacts those courts’ analysis of the other three factors. Will the Warhol decision prompt the Supreme Court to soon opine on other factors as well?

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.