IP Law Daily, COPYRIGHT NEWS: High Court mulls role of ‘transformativeness’ in copyright fair use cases, (Oct 12, 2022)

By Thomas Long, J.D.

Justices wrestle with question of whether granting expansive protection to “follow-on” works that alter meaning of copyrighted works would “eviscerate” the exclusive right to create and use “derivative works.”

A little over a year and a half after the Supreme Court last visited the issue of copyright “fair use”—in Google LLC v. Oracle America, Inc., 141 S. Ct. 1183 (2021), hailed by some as the “copyright case of the decade”—the Court again tackled the question of when infringing uses are rendered noninfringing by under the fair use test set forth by Section 107 of the Copyright Act. The court today heard arguments in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, Dkt. No. 21-869, which pits the owner of rights to works by the late pop artist Warhol against well-known celebrity portrait photographer Lynn Goldsmith, with the key issue being whether Warhol’s changes to Goldsmith’s portrait of rock superstar Prince were “transformative” enough to make Warhol’s “Prince Series” of art prints non-infringing fair uses. That series was created in 1984, using Goldsmith’s photo as a reference, and one of the images was used for a Vanity Fair magazine cover. At issue in this case, however, was Vanity Fair’s inclusion of a different image (known as “Orange Prince”) in 2016.

The Justices heard arguments that posited sharply different hazards to creativity, innovation, and art—with the Andy Warhol Foundation contending that adoption of Goldsmith’s position on fair use would render innumerable noted works of art unlawful copyright infringements, and Goldsmith contending that the Foundation’s standpoint that uses with new (“transformative”) meanings are “fair” under Section 107 would destroy the licensing market for professional photography.

Several Justices appeared particularly concerned that there would be a difficult conflict between the exclusive right to create and use derivative works, conferred by Section 106(2) of the Copyright Act, and the Section 107 fair use defense if “transformativeness” is emphasized under the Foundation’s proposed test. The Justices and counsel for the parties and the government also delved into the question of how the “purpose and character” of the challenged use—the first of four fair use factors listed in Section 107—should be discerned: objectively or subjectively

Some Justices also expressed a lack of clarity as to exactly what use was at issue in the Section 107 analysis—Warhol’s creation of the Prince Series in 1984, or the Foundation’s licensing of “Orange Prince” for the 2016 Vanity Fair cover. This distinction matters in particular in terms of the “purpose” of the use, but also for the consideration of the potential harm to the market for the original Goldsmith photo.

Another complication was the fact that the Foundation’s petition for review, as well as briefing by the parties, focused entirely on the first Section 107 factor, although neither counsel nor the Court seemed able to confine the analysis to that single factor, drawing other fair use factors into the discussion several times. Specifically, the fourth factor—the effect on the value of or market for the copyrighted work—loomed large in the discussion.

“Prince Series.” The underlying copyrighted work was created by Lynn Goldsmith, a professional photographer primarily focusing on celebrity portraits and rock concert photos. Goldsmith took a series of portrait photos of musician Prince Rogers Nelson, popularly known simply as “Prince,” in December 1981. In 1984, Goldsmith’s agency licensed the photograph to Vanity Fair magazine for use as an artist reference. Goldsmith didn’t know it, but the artist in question was famed contemporary artist Andy Warhol, who had been commissioned to create an image of Prince for the magazine. Warhol created 15 additional works (a combination of screenprints and pencil illustrations) based on the Goldsmith photograph, with the entire series of 16 referred to as the “Prince Series.” Vanity Fair chose one of the Prince Series images—known as “Purple Prince”—for its cover in 1984. Warhol died in 1987. After his death, the Andy Warhol Foundation for the Visual Arts, Inc., acquired title to and copyright in the Prince Series. In 2016, with the Foundation’s permission, Vanity Fair publisher Conde Nast used a different image from the series (“Orange Prince”) for the cover of a magazine issue paying tribute to the deceased musician. Goldsmith was not given any credit or attribution for the 2016 cover image, which was instead attributed solely to the Foundation. The Foundation also commercially licensed the images for use on mass-produced posters and other merchandise.

Infringement dispute. In July 2016, Goldsmith contacted the Foundation to advise that her copyright was being infringed. In April 2017, the Foundation filed an action against Goldsmith and her agency, seeking a declaratory judgment that the Prince Series did not infringe because the works qualified as fair use. Goldsmith countersued for copyright infringement. On July 1, 2019, the district court granted summary judgment in the Foundation’s favor, finding that the Foundation made fair use of Goldsmith’s photograph. On March 26, 2021, the Second Circuit reversed, concluding that the district court erred in its application of the four fair use factors listed in Section 107 of the Copyright Act.

Second Circuit holding. In rejecting the fair use determination, the Second Circuit made particular note of the fact that Warhol’s prints did not alter or remove protectable elements of Goldsmith’s photo, and that her work was “instantly recognizable” in the Warhol prints. The district court improperly focused on its subjective interpretation of the works’ underlying artistic message rather than an objective assessment of their purpose and character, said the appellate court. The result of this incorrect approach led to the district court making faulty conclusions as to the rest of the fair use factors, the appellate court concluded. Along with reversing the fair use judgment, the appellate court vacated the district court’s order dismissing Goldsmith’s counterclaim for copyright infringement.

Petition for review. The Foundation’s petition for certiorari posed the question:

Whether a work of art is “transformative” when it conveys a different meaning or message from its source material (as this Court, the Ninth Circuit, and other courts of appeals have held), or whether a court is forbidden from considering the meaning of the accused work where it “recognizably deriv[es] from” its source material (as the Second Circuit has held).

The Foundation asserts that the Second Circuit’s decision creates a split with the Ninth Circuit, which held in Seltzer v. Green Day, Inc., 725 F.3d 1170 (9th Cir. 2013), that a secondary work is “typically viewed as transformative as long as new expressive content or message is apparent.” This test, according to the Foundation, has been adopted by the First, Fourth, Third, Sixth, and Federal Circuits.

Petitioner’s argument. Roman Martinez of Latham & Watkins, LLP argued on behalf of the Foundation.

“Both courts below agreed and Goldsmith doesn't dispute that Warhol's Prince Series can reasonably be perceived to convey a fundamentally different meaning or message from Goldsmith's photograph,” Martinez opened. “The question in this case is whether that different meaning or message should play a role, any role, in the fair use analysis. Our answer is yes.” Martinez pointed out that in its opinion in the Google case—in which the Court found Google’s use of certain computer code to be fair and noninfringing—the Court mentioned “Warhol's soup cans [i.e., his famous series of paintings based on Campbells canned soup labels] as a paradigmatic example” of when the altered meaning or message of a challenged work must be considered. Martinez also contended that the Foundation’s proposed test “maintains a balance between protecting artists' rights to monetize their works and encouraging new and important follow-on expression” by giving artists “credit for innovation” while recognizing that the other Section 107 factors will sometimes cut decisively the other way.

The Justices asked questions in order of seniority, with Justice Thomas going first. Justice Thomas asked Martinez to give examples of “follow-on” works that fail the test proposed by the petitioner. Martinez said that movies adapted from books would clearly be derivative works that would not qualify for fair use protection. This response initiated a thread that ran through the rest of the argument session: how to protect Section 106(2) derivative use rights while recognizing the Section 107 fair use defense (and vice versa)? Justices in fact appeared at times to struggle with understanding exactly what constitutes a derivative work, and whether any altered work asserted to be “fairly used” would be an infringing derivative work.

A question from Justice Sotomayor led to a brief colloquy over what was the “use” at issue: Warhol’s creation of Prince Series, or Conde Nast’s unlicensed use of “Orange Prince” for a magazine cover. This was another point of contention that came up several times. According to Martinez, both uses were implicated, and both qualified as fair. Justice Sotomayor asked, “Why doesn’t the fourth factor [market effects] just destroy your defense in this case?” Martinez replied that, assuming the 2016 license by the Foundation to Conde Nast was the only use at issue, the issue hadn’t been fully briefed because the “Second Circuit’s analysis of Factor 4 was overly influenced by its impression that these were essentially, for all intents and purposes, the same work because they were both portraits of Prince.” According to Martinez, the Foundation could lose with respect to this question if it went to a jury, but there was enough evidence in the record to survive summary judgment.

Justice Barrett again brought up the question of the derivative work rights of Section 106(2), opining that “your test, this meaning or message test, risks stretching the concept of transformation so broadly that it kind of eviscerates Factor 1 and puts all of the emphasis on Factor 4.” The Justice and counsel exchanged differing views on what constitutes a derivative work, with Martinez concluding by asserting that “I don't think it's really that big a deal in this case, though, because this case really involves a very fundamental transformation in meaning or message and we think very little impingement on the market under Factor 4.”

Last up was Justice Brown, who asked what the Court should do if it decided that the Foundation should prevail on the “meaning and message” test for the first Section 107 factor. Martinez admitted that the other three factors hadn’t been briefed and would possibly need to be sent all the way back to the district court.

Respondent’s argument. Lisa S. Blatt of Williams & Connolly LLP advocated for Goldsmith. Blatt characterized the first Section 107 factor as asking, “What is the reason or justification to take another's copyrighted work?” According to Blatt, the reason can’t simply be that to avoid paying license fees; rather, “The copier has to explain why it needed and not just wanted to use someone else's expression.” Blatt argued that the Foundation’s use in 2016 had the purpose of avoiding payment to Goldsmith, and that the Foundation’s definition of “transformative” was too easy to manipulate.

Justice Thomas asked whether the word “character” in the Section 107 language had a different meaning from the word “purpose.” Blatt responded that the “purpose and character” of the use at issue here was the commercial licensing of the image (as opposed to its creation), but she admitted that she’s not sure if the term “character” in Section 107 played a distinct role from “purpose.” The “message or meaning test,” she contended, impinged on creators’ exclusive right to make derivative works.

Justice Kagan asked how “character” can be considered without looking at meaning and message. Blatt replied that “of course, meaning and message is relevant as to purpose,” but she explained that the meaning and message must be new and distinctive, and can’t have the “bare” purpose to add to someone’s art to make a new work.

Blatt laid out the respondent’s test as follows: “When the defendant has an asserted purpose for copying someone else's work, you ask was the copying of the original needed to best achieve the copier’s purpose?”

Justice Kagan took issue with this statement and suggested that fair use protection could extend to follow-on works that are new and “completely transformative,” even if they don’t comment on the original work. Blatt contended that the word “transformative” in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994)—the case in which the Court first explicated the concept of transformation as indicative of fair use—was dicta in Campbell and non-statutory, because it does not appear in Section 107, whereas the word “transformed” appears in the definition of “derivative work” in Section 101.

Later in her argument, Blatt repeated the contention that the “meaning or message” of a new work was relevant in the fair use analysis, but the respondent was arguing against a situation in which the test was overly broad when it amounted to “just a bare, unadorned new meaning or message test. It's not tied to any purpose other than I want to make some money off some art and I had some really cool idea here.”

U.S. government’s position. Yaira Dubin, Assistant to the Solicitor General, presented the view of the government. Urging the Court to affirm the Second Circuit, Dubin took the position that Warhol’s print was a derivative work, and that the market harm should be the primary consideration in the fair use analysis. The Foundation’s test would “eviscerate” the derivative use right, Dubin contended. Additionally, she agreed with Blatt that the relevant use to consider was the 2016 Vanity Fair featuring Orange Prince, rather than Warhol’s creation of the Prince Series.

Dubin, like Blatt, also asserted that the use or incorporation of the preexisting work must be necessary (or essential, although Justice Kagan disagreed that this word was synonymous with necessary)—or at least useful—in order to achieve a distinct purpose. As Dubin put it, a creator of a follow-on work would have to “justify” any “borrowing” from a preexisting work. While “meaning” and “message” can be relevant in assessing the purpose and character factor, a party asserting fair use would need to show that using the original was necessary to convey the new meaning or message.

However, as had been pointed out by Martinez, the “necessity” of using the original work had previously been considered only in cases involving parodies, such as Campbell. It will be up to the Justices to decide whether necessity/essentialness of the use is at play in non-parody situations, such as Warhol’s use of Goldsmith’s photo.

The case is No. 21-869.

Attorneys: Roman Martinez (Latham & Watkins LLP) for Andy Warhol Foundation For the Visual Arts, Inc. Lisa S. Blatt (Williams & Connolly LLP) for Lynn Goldsmith.

Companies: Andy Warhol Foundation For the Visual Arts, Inc.

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