On May 23, 2023, the U.S. Supreme Court issued its decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith. This case marked the Court’s second recent decision regarding the Copyright Act and helps clarify the current state of play regarding the fair use defense.
In this case, the Court sided with the respondent, artist Lynn Goldsmith, holding that the commercial licensing of Andy Warhol’s work did not constitute fair use of the copyright upon which the work was based. The Court’s decision and analysis were limited in scope and focused solely on the first of the four statutory fair use factors, highlighting that a fair use analysis must clearly identify the specific use at issue.
Background
Lynn Goldsmith is a recording artist and film director, but she may be best known for her celebrity portraits, particularly those of rock-and-roll artists. In 1984, Goldsmith licensed a photograph she took of the recording artist Prince to Vanity Fair Magazine. The parties agreed that this was for reference use for painter Andy Warhol to create an illustration of Prince. Warhol subsequently used Goldsmith’s photo to create something he called the “Prince Series.” The Prince Series ultimately consisted of multiple silkscreen prints and two pencil drawings based on Goldsmith’s photograph.
Prince died in 2015, and as part of a tribute issue, Condé Nast—Vanity Fair’s parent company—requested to license one of the images from the Prince Series from the Andy Warhol Foundation (“AWF”). This image was called the “Orange Prince.” Upon seeing this work, Goldsmith notified AWF that she believed the image violated her copyright. In efforts to clear the issue and clarify its rights, AWF sued Goldsmith, seeking a declaratory judgment of noninfringement. AWF alternatively claimed fair use of Goldsmith’s image. Accordingly, Goldsmith counterclaimed against AWF for copyright infringement.
What Is Fair Use?
Section 107 of the Copyright Act provides four factors to be considered in determining whether fair use exists. At issue in the AWF case was whether Warhol’s creation of the Prince Series and AWF’s subsequent licensing of Orange Prince constituted fair use of Goldsmith’s photograph.
The four non-exclusive factors to consider in determining fair use include:
- The purpose and character of the use, including whether the use is commercial, educational, or nonprofit;
- The nature of the copyrighted work;
- The amount of the portion used in relation to the copyrighted work as a whole; and
- The effect of the use upon the potential market for the copyrighted work.
A deciding court must take into account these four factors when ruling whether the use of a copyrighted work is fair use.
Lower Court Decisions
The district court held that the Prince Series was a fair use of the Goldsmith Photograph. The court therefore granted summary judgment to AWF. In determining that the Prince Series had transformed Goldsmith’s photograph of Prince, the court held that Warhol had taken the vulnerable individual depicted in Goldsmith’s photo and transformed him into a “larger than life” figure using Warhol’s own artistic style. Thus, in the district court’s view, AWF’s use was transformative and therefore fair.
The Second Circuit reversed the district court’s holding that the Prince Series was fair use. Instead, the court held that the Prince Series works were not transformative. According to the Second Circuit, this was because the purpose and function of Goldsmith’s work and Warhol’s work are identical. The court further held that the Prince Series retained the essential elements of Goldsmith’s work without transforming it in a meaningful way.
Question Before the Supreme Court
The issue for certiorari was the narrow question of whether the purpose and character of the use of Goldsmith’s work, including whether such use is of a commercial nature or is for nonprofit educational purposes, weighed in Goldsmith’s favor.
Supreme Court Affirms Second Circuit
The Supreme Court affirmed the Second Circuit’s ruling that AWF’s use of Goldsmith’s photo was not fair use. In doing so, the Court took up the issue of fair use for only the second time in nearly 30 years and affirmed its 1994 ruling in Campbell v. Acuff-Rose Music.
Here, the Court affirmed the Second Circuit’s ruling that Goldsmith and AWF had substantially the same purpose for their respective works. It determined that AWF’s use was commercial, a use that many courts find not to be “transformative” under the fair use test’s first factor. Finally, AWF failed to persuasively justify its use of Goldsmith’s work otherwise. Additionally, AWF had argued only the first fair use factor on appeal, so it had waived other arguments and the Second Circuit’s judgment of no fair use was upheld.
Swinging the Pendulum Back Toward Copyright Holders
In theory, this ruling just reaffirms the Campbell precedent. However, it also provides copyright holders with another tool against an increasingly common form of copying. The newer forms of copying do not aim to add parody or critique. Instead, these copies add aesthetics like color, sparkles, or other details that do not transform the original in any way. Often, this can be done through an enhancement program designed for social media. In the blink of an eye, a copyright holder can see their original design “enhanced” with some rhinestones and mass-printed on “merch” without seeing a dime in licensing fees or royalties.
Warhol’s work could be seen as this kind of transformative use, where the secondary use may not have legitimate commentary on the original. However, art is very much in the eye of the beholder, and since Campbell, courts have become more willing to find such uses to be fair. This tends to be true even when the use is overtly commercial and borrowed heavily from the original works.
Considering Commerciality When Evaluating Fair Use
In the AWF case, the Court reaffirmed the importance of considering whether a use is commercial in determining whether it is fair use. However, the Court was careful to maintain that commerciality is not alone dispositive in the first factor analysis of fair use.
The Court’s decision, though somewhat fractured between contentious dissenting and concurring opinions, provides greater clarity to the first fair use factor. While 2021’s Google LLC v. Oracle America, Inc. decision assessing fair use was limited to its underlying technological context, this case is likely to apply to a much broader array of claims like music, art, and even AI-related claims that are certain to move through the federal courts.
Thoughts for the Future of Fair Use
For artists and business owners who may be concerned about the future of the fair use doctrine, the AWF case raises some clear takeaways to consider.
First, the Court warns that mere transformation of a work cannot be permitted to swallow the right of copyright owners to create derivative works. Thus a new meaning or message alone is not enough to demonstrate fair use.
Second, although the AWF opinion and Google opinion both provide guidance regarding how to analyze the first fair use factor, these inquiries remain highly fact-specific. Lower courts must engage in highly individualized analyses of the cases at hand when fair use is at issue.
Third, the AWF decision makes clear that both transformativeness of the work and commerciality matter in the analysis. This indicates that the transformative nature of a secondary use may no longer be a practically dispositive issue in the fair use analysis. Instead, it may be only one element of the first-factor analysis. This may also make the first factor itself one element that must be weighed against the other three factors.