Supreme Court Sides With Photographer In Warhol-Goldsmith Case;
What Does The Decision Mean For Art Law?06/12/2023In late May, the Supreme Court issued its long-awaited decision in the case of Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith. The case sought to provide clarity on the thorny concept of “fair use” in copyright law. In particular, it focused on how courts should evaluate the “purpose and character” of an artist’s use of someone else’s creations, and the role of “transformativity” in that evaluation. The resulting decision is, in some ways, limited in scope, but in other respects, it raises new questions for artists who borrow from the work of others.
Our previous posts contain more detail on the background of the case and the oral arguments, which were held last fall. Briefly, the case centers around a photograph Lynn Goldsmith took during a 1981 photo shoot with musical icon Prince. In 1984, Goldsmith’s photo agency licensed the photo “for use as an artist’s reference” to Vanity Fair magazine; Vanity Fair then commissioned Andy Warhol to create an illustration of Prince, based on the photo, to accompany a 1984 article about Prince. Warhol also used Goldsmith’s photo to create a series of 16 Warhol works depicting Prince. Warhol died in 1987, and his Foundation now owns the intellectual property rights to those 16 works. After Prince died in 2016, the Foundation licensed some of those Warhol works to Vanity Fair to be published in a special edition of the magazine commemorating Prince’s life. It was not until that commemorative edition that Goldsmith learned for the first time about the Warhol Prince series. In 2017, after unsuccessful negotiations, the Foundation sued Goldsmith, seeking a declaration that it had not infringed Goldsmith’s copyright in the photo; Goldsmith counterclaimed for infringement.
The Warhol Foundation prevailed in a federal district court, but the Second Circuit reversed and ruled in favor of Goldsmith. The Supreme Court agreed to hear the case, but granted certiorari on a fairly limited basis; while fair use, a defense to copyright infringement, is generally decided by considering four factors (see here for the statute’s language), the Supreme Court agreed to examine only the first fair use factor (effectively leaving in place the Second Circuit’s decision on the other three factors, each of which, in the Second Circuit’s view, favored Goldsmith). On May 18, the Court issued its decision, in which seven justices agreed that the first factor favored Goldsmith, not Warhol. Justice Kagan, joined by Chief Justice Roberts, dissented.
The Majority’s Main Points
In focusing on the first fair use factor—“the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes”—the majority opinion sought to clarify how lower courts should analyze the “transformativity” of an artwork for purposes of fair use. “Transformativity” is a concept that has emerged from fair use case law (see here and here for just a few of our previous discussions about it); courts generally recognize that when a secondary use copies material in a “transformative” way, by giving the new work a new expression, meaning, or message, that makes a finding of fair use more likely. But courts have struggled with what that means and how much to rely on transformativity relative to other fair use considerations. In the Warhol-Goldsmith decision, the Supreme Court explained that, while a secondary artist’s “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 [statutory] factor.” The Court squarely rejected the idea that the first fair use factor “weighs in favor of any use that adds some new expression, meaning, or message,” warning that that would swallow the original owner’s right to make derivative works. The Court continued, “the first fair use factor considers whether the use of a copyrighted work has a further purpose or different character, which is a matter of degree, and the degree of difference must be balanced against the commercial nature of the use. If an original work and a secondary use share the same or highly similar purposes, and the secondary use is of a commercial nature, the first factor is likely to weigh against fair use, absent some other justification for copying.” (The dissent argued that this formulation tends to give short shrift to both the role of the borrowing artist’s creativity, and the statutory text requiring consideration not only of the “purpose” but the “character” of a work.)
The majority took care to emphasize that it was only analyzing one specific use of Goldsmith’s photo: the Foundation’s 2016 licensing of the Orange Prince artwork to Vanity Fair for the magazine’s commemorative issue memorializing Prince after his death. And from that vantage point, the majority ruled, the “purpose of the [licensed Warhol] image is substantially the same as that of Goldsmith’s photograph. Both are portraits of Prince used in magazines to illustrate stories about Prince.” And that was clearly the crux of the majority’s reasoning: “Taken together, these two elements—that Goldsmith’s photograph and AWF’s 2016 licensing of Orange Prince share substantially the same purpose, and that AWF’s use of Goldsmith’s photo was of a commercial nature—counsel against fair use, absent some other justification for copying.” The dissent pointed out that this arguably conflates the first factor with the fourth factor, which examines “the effect of the use upon the potential market for or value of the copyrighted work.” The dissent also opined that the majority put too much emphasis on the commercial licensing; the dissent argues that under the majority’s reasoning, “because Warhol entered into a licensing transaction with Condé Nast, he could not get any help from factor 1—regardless how transformative his image was.” Indeed, the dissent notes, such overemphasis on commercialism ignores the fact that even the more traditional fair uses mentioned in the preamble of the fair use statute, such as “criticism, comment, news reporting, teaching[,] . . . scholarship, or research,” are often conducted for profit.
Relatedly, the majority also explored the idea of an artist’s “justification” for borrowing from another. The Court indicated that artworks commenting on or parodying another work are, in general, more likely to be fair use; the Court discussed the distinction “between parody (which targets an author or work for humor or ridicule) and satire (which ridicules society but does not necessarily target an author or work)” and explained that parody “needs to mimic an original to make its point,” while “satire can stand on its own two feet and so requires justification for the very act of borrowing.” It continued: “Although targeting is not always required, fair use is an affirmative defense, and [the Foundation] bears the burden to justify its taking of Goldsmith’s work with some reason other than, ‘I can make it better.’” Here, the Court ruled, the Warhol Foundation had offered “no independent justification, let alone a compelling one, for copying the photograph, other than to convey a new meaning or message. As explained, that alone is not enough for the first factor to favor fair use.” On this point, the dissent criticizes what it sees as the majority’s excessive focus on “targeting,” noting that in the Google v. Oracle case, another recent Supreme Court decision about copyright, the “new work there did not parody, comment on, or otherwise direct itself to the old: The former just made use of the latter for its own devices. Yet that fact never made an appearance in the Court’s opinion; what mattered instead was the ‘highly creative’ use Google had made of the copied code.” The dissent also asks: “Would Warhol’s work really have been more worthy of protection if it had (somehow) ‘she[d] light’ on Goldsmith’s photograph, rather than on Prince, his celebrity status, and celebrity culture?”
Justices Gorsuch and Jackson concurred with the majority, and boiled the question down to “which ‘purpose’ and ‘character’ count” under the first fair use factor: the borrowing artist’s purpose in creating his work, or the purpose of the particular use being challenged. In their view, the latter is the focus, and courts should “assess whether the purpose and character of that use is different from (and thus complements) or is the same as (and thus substitutes for) a copyrighted work. It’s a comparatively modest inquiry focused on how and for what reason a person is using a copyrighted work in the world, not on the moods of any artist or the aesthetic quality of any creation.”
Implications For the Art Market
In some ways, the art world can feel some relief about the ruling’s limited scope. The Court was clear that it “expresse[d] no opinion as to the creation, display, or sale of any of the original [Warhol] Prince Series works.” Indeed, the majority expressly notes that they might analyze Warhol’s initial 1984 creation of Orange Prince completely differently than the 2016 licensing of that same artwork decades later. And the concurring decision mused, “If, for example, 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.” This provides some comfort to those involved in buying and selling original works of fine art—while the Court’s overall approach to the first factor will certainly inform future cases, the Court did not outright reject fair use’s applicability to appropriation art. In this respect, as one art lawyer recently observed, this is a “narrow” decision and the Court “took pains to note that other works by Warhol had little to fear from the Copyright Act.”
On the flip side of that coin, though, some commentators have opined that it arguably leaves the art field with inadequate guidance because the Court did not squarely analyze larger questions about how fair use should apply to appropriation art generally. One commentator recently noted that the first-factor analysis in the Second Circuit’s landmark 2013 Cariou decision might well come out differently under the majority’s approach, raising questions about how New York courts should handle Cariou in the future. Another writer argues that “the effect [of the Warhol decision] seems highly restricted. The analysis was so fact specific that it would be difficult to apply it beyond situations involving artists commercially licensing the use of images that include underlying works by other artists, situations which are exceedingly rare… The court said nothing about the general practice of Warhol himself or other artists like him.”
But here’s what’s not “limited” about the ruling. It implies that, where an artist has created a work that borrows from or makes use of another artist’s work, that later artist must think about potential copyright claims, and the strength of his or her fair use defense, every time he or she plans to make a new commercial “use” of that secondary work. This is problematic for artists because any given artwork can enjoy a long life, in which the artwork may be put to a myriad of "uses" or "purposes" over the course of decades. Imagine, for example, an artwork that might start out as “street art,” then be moved to a commercial gallery as fine art for sale, then be acquired by a museum (complete with licensed reproduction merchandise in the museum’s gift shop), then be licensed for use in a film, and then appear in a television commercial. Under the majority’s approach, it is possible that some of those situations would give rise to copyright liability while others do not, and the artist (and eventually, the successors to the artist’s copyright) would have to constantly reevaluate fair use every time an artwork is to be commercially exploited in a new way. To be sure, many artworks do not enjoy such longevity and success, and are not sought-after for so many diverse uses—but that is surely what many artists strive for.
The majority advances what seems like a simple idea: that the “same copying may be fair when used for one purpose but not another.” But in practice, this begs the question discussed in the concurring opinion: what “purpose” are we talking about? The “purpose” the borrowing artist originally had when he did the borrowing and made a new creation? Or the “purpose” of some particular commercial exploitation of that secondary creation? Previous case law has not focused on this kind of slicing and dicing of fair use based on specific commercial applications; for example, in the Supreme Court’s landmark opinion about the Roy Orbison song “Pretty Woman,” there was no indication that the Court needed to know whether 2 Live Crew’s borrowing from Orbison was for the “purpose” of playing in live concerts versus licensing it for a Superbowl ad. The song was the song, and once it was held to be fair use, the implication seemed to be that the secondary artist could go on to exploit that creation as he or she saw fit (as is consistent with a basic premise of copyright law, i.e., that copyright arises at the time of creation of an original artwork itself, regardless of what an artist subsequently does with it). Now, that idea is arguably in question, and artists need to consider whether not just their initial artwork but some later commercial exploitation might be legally risky. As the dissent notes, “when the majority denies follow-on artists the full reward of their creativity, it diminishes their incentive to create.”
The dissent touches on this idea in a footnote, urging that the fair use statute simply asks whether the “use made of the [primary] work” is fair, while the majority focuses on the “use” of the work alleged to be infringing. In the dissent’s view, the focus should be on “what the copier does with the underlying work” (here, how Warhol’s silkscreen transformed Goldsmith’s photo) and not what the copier eventually does to commercially exploit the secondary work (here, the much later licensing).
Other art law practitioners have also pointed out this problem. As one attorney wrote in an op-ed for ArtNet, “artists, dealers, curators, collectors, and everyone else in the art world must make a case-by-case guess whether a creative work that started out as fair use will lose that defense under copyright law depending on how it’s shown, sold, or marketed.” Another art lawyer has said she is “troubled” by the Court’s “application of the ‘purpose’ analysis to various specific use-cases along the life-cycle of a work of art.” And still another noted that the decision “suggests that, even when the creation of a new work—i.e., the initial copying—is fair use, the owner of the copyright in the original work always has a residual interest in the new work… Every subsequent use of the new work must pass the fair-use test anew—without regard to the transformative nature of the work’s creation itself.”
Overall, the full repercussions of the Warhol/Goldsmith decision will only become clear over time, as future courts work to apply the majority’s reasoning to new situations. (The decision came too late to be a factor in at least one high-profile ruling; just days before the Warhol decision, a federal judge rejected Richard Prince’s fair use defense on summary judgment.) One commentator recently expressed doubt that this decision would have the chilling effect the dissent warned about, noting that Warhol himself would have been “little concerned” with copyright liability, and that such fears clearly have not slowed appropriation artists like Jeff Koons and Richard Prince. But for less-established artists, the fear of liability is perhaps not so easily dismissed (see this story about Goldsmith asking an artist to remove his work—which was based on Warhol’s Prince series—from Instagram prior to the Supreme Court’s decision). Relatedly, some commentators have suggested that, when in doubt about fair use, an artist borrowing from another should simply ask the borrowee for permission and pay a license fee. That might be an option for artists to consider, but it ignores the reality that some borrowee artists would not grant permission for certain “uses” at any price, and others might be willing in theory but the parties might not be able to agree on a fair price. As the dissent says, “sometimes copyright holders charge an out-of-range price for licenses. And other times they just say no.” Fair use continues to be an important, but difficult, defense for artists to employ.
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