Megan Noh was asked about the 2nd U.S. Circuit Court of Appeals’ recent ruling that found Andy Warhol’s “Prince Series,” which used photographer Lynn Goldsmith’s photo of rock star Prince, was not protected under the fair use doctrine. Andy Warhol Found. for the Visual Arts Inc. v. Goldsmith, No. 19- 2420, 2021 WL 1148826 (2d Cir. Mar. 26, 2021).

That ruling overturned a decision by U.S. District Judge John Koeltl of the Southern District of New York, who said Warhol did not violate copyright law because he transformed the photo into “something new.” Andy Warhol Found. for the Visual Arts Inc. v. Goldsmith, No. 17-cv-2532, 2019 WL 2723521 (S.D.N.Y. July 1, 2019).

Thomson Reuters: First of all, how did this dispute come about?

Megan Noh: Lynn Goldsmith photographed Prince Rogers Nelson (the musical icon popularly known simply as “Prince”) in 1981, and three years later, her agency licensed the photo to Vanity Fair as an “artist reference” for an illustration commissioned by the magazine to accompany a profile piece it planned to run entitled “Purple Fame.” The visual artist commissioned to create that illustration was none other than Andy Warhol — and he went on to use the photo as an underlying source for a series of 15 additional artworks (the “Prince Series”). Warhol’s production method typically involved the manipulation of underlying photos through the creation of high-contrast silkscreens.

Goldsmith did not become aware of the Prince Series until May 2016 — shortly after Prince’s tragic death — when Vanity Fair republished a digital version of the November 1984 “Purple Fame” article, and issued a print run of a commemorative magazine using one of the Warhol “Prince Series” works on the cover. Following those publications of works from the Prince Series, Goldsmith contacted the Andy Warhol Foundation (to which copyright in the works had transferred following Warhol’s death in 1987) to notify it of her belief that the series infringed the copyright in her 1981 photo.

In April 2017, the Andy Warhol Foundation brought the dispute to a head by commencing an action in the Southern District of New York seeking a declaratory judgment that the Prince Series works do not infringe Goldsmith’s copyright because they are not substantially similar to the photo in question, and/or because they are protected by the “fair use” doctrine.

TR: Why did the District Court ruling and the 2nd Circuit ruling come out so differently?

MN: Fair use is necessarily an “open-ended” and “context-sensitive inquiry,” on which jurisprudence has evolved in a particularly dynamic manner over the last few decades.

When courts are asked to apply a multifactor test to unique visual artworks, results can vary — and this can be exacerbated when there isn’t universal agreement about interpretation or weight of the factors.

The Southern District’s 2019 finding of fair use ultimately focused on the first factor of the relevant four-factor test, the “purpose and character of the use,” citing Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006), for the proposition that the “[m]ost important” consideration under this factor is the “transformative” nature of the secondary (i.e., allegedly infringing) work.

Concluding that the Prince Series cleared this hurdle, the Southern District quoted the decision in Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013), in which the 2nd Circuit found that a secondary work which “ha[s] a different character, … a new expression, and employ[s] new aesthetics with creative and communicative results distinct” from the original is transformative as a matter of law.

Finding that the Prince Series “can reasonably be perceived to have transformed Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure,” the Southern District deemed the works transformative, and further ruled that the balance of other fair use factors also supported a ruling in favor of the Andy Warhol Foundation.

Notably, the Southern District’s finding of transformativeness resulted in a sort of domino effect, substantially influencing both the weight placed by the court on the second factor and its determination as to the party favored by the third factor.

In its reversal, the 2nd Circuit opined that the Prince Series works “are much closer to presenting the [Goldsmith photo] in a different form,” i.e., to being the type of derivative work as to which a copyright holder has exclusive rights under 17 U.S.C.A. § 106(2), “than they are to being works that make a transformative use …. Crucially, the Prince Series retains the essential elements of the Goldsmith [photo] without significantly adding to or altering those elements.”

Noting that at a “bare minimum,” a secondary work’s transformative character must “comprise something more than the imposition of [the secondary] artist’s style on the primary work” or “recasting” of the underlying work in a new medium, the 2nd Circuit determined that the Prince Series failed to clear this bar. Moreover, the 2nd Circuit disagreed with the Southern District’s analysis of the other fair use factors, finding that each favored Goldsmith.

In its analysis of the fourth factor in particular, the 2nd Circuit noted that Goldsmith had met her burden of alleging that the Prince Series adversely impacted the licensing market for her photo, and that the Southern District had “entirely overlooked the potential harm to Goldsmith’s derivative market.”

TR: How have appropriation artists fared in other copyright disputes, and what clarification does the 2nd Circuit’s Goldsmith opinion provide with respect to those precedents?

MN: As acknowledged by the Goldsmith decision, 2nd Circuit cases addressing the transformative nature of works of appropriation art have “yield[ed] conflicting guidance.” So, for example, in Rogers v. Koons, 960 F.2d 301 (2d Cir. 1992), the 2nd Circuit determined that Jeff Koons’ three-dimensional sculpture recreating a photograph of two figures holding a row of puppies was not fair use despite his claim that he intended the work to serve a distinct purpose from the original, in commenting on modern society.

But in a subsequent case involving a different Koons work, the court held that the appropriation of a copyrighted fashion photograph of women’s sandal-clad feet was a fair use, in part because of the artist’s similar testimony on the work’s commentary on mass media (as distinguished from the purpose of the underlying work, the promotion of the actual footwear product). Blanch v. Koons, 467 F.3d 244 (2d Cir. 2006).

Compounding those seemingly disparate results, in Cariou v. Prince, the 2nd Circuit placed little weight on the testimony of the secondary artist, contemporary appropriation artist Richard Prince, as to the intended purpose of his “Canal Zone” series (which incorporated copyrighted photos by the French photographer Patrick Cariou). In fact, Prince testified that he did not seek to create new meaning or message with the disputed works. The focus of the Cariou court’s analysis was the actual manipulation of the source material and the resulting visual effect: because the Prince works both juxtaposed Cariou’s photos with other images and “obscured and altered” them to the point of being “barely recognizable,” the 2nd Circuit ruled in favor of Prince, and established the precedent that a secondary work could be adjudged transformative as a matter of law if it “employ[s] new aesthetics” with distinct creative results.

The majority Goldsmith opinion seeks to reconcile some of these seemingly disparate applications, and also signals an ebb current following the “high water mark of [the 2nd Circuit’s] recognition of transformative works” that Cariou represented.

Explicitly noting that Cariou did not establish a rule that “any secondary work that adds a new aesthetic or new expression to its source material is necessarily transformative,” the 2nd Circuit instructs that the analysis of transformativeness “cannot turn merely on the stated or perceived intent of the artist.” Rather, a judge must instead seek to objectively “examine how the works may reasonably be perceived,” including “whether the secondary work’s use of its source material is in service of a ‘fundamentally different and new’ artistic purpose and character, such that the secondary work stands apart from the ‘raw material’ used to create it.”

This newly articulated standard is clearly meant to set a higher bar for a finding of “transformative use,” but commentators have noted that it’s not exactly crystal clear how that standard might be satisfied. In other words, the Goldsmith opinion tells us that the Prince Series is not transformative, but does not tell us how much further Warhol would have had to “pull” the Goldsmith photo “in new directions” (Maj. Op., citing Cariou, 714 F.3d at 711) for it to have passed the test.

Perhaps the most actionable guidance from the Goldsmith decision actually comes from the concurrence by Judge [Richard J.] Sullivan, who criticizes the tendency of past fair use decisions to have “overreli[ed]” on the “‘transformative’ nature of [the] secondary work,” threatening to “collapse the four statutory fair use factors into a single, dispositive factor.”

Illustrating this “pattern,” Judge Sullivan points to the Southern District’s evaluation of the factors below, noting that the “[p]lacing [of] dispositive weight on transformative use while reducing evidence of market harm to an afterthought is difficult to square with the Supreme Court’s guidance [in Harper & Row Publishers Inc. v. Nation Enters., 471 U.S. 539 (1985)] that the fourth factor ‘is undoubtedly the single most important element of fair use.’”

The concurrence recommends a “renewed focus” and placement of “substantial weight” on “the effect of the use upon the potential market for or value of the copyrighted work,” in order to “better serve the purposes of copyright, which remains at its core ‘a commercial doctrine whose objective is to stimulate creativity … by enabling [authors] to earn money from their creations.’”

Moving forward, appropriation artists seeking to follow the Goldsmith decision will accordingly not only need to meet the higher bar established by the majority opinion for transformativeness (however that standard may continue to be interpreted and developed), but will also need to be prepared to show that their uses don’t usurp any relevant market for the underlying works, as courts following Judge Sullivan’s instructions begin to give greater consideration to the fourth factor.

TR: About a week after the appeals court ruling against the Andy Warhol Foundation for the Visual Arts Inc., the U.S. Supreme Court ruled that Google’s copying of computer code to create a platform for Android smartphones was a fair use. Google LLC v. Oracle America Inc., No. 18-956, 2021 WL 1240906 (U.S. Apr. 5, 2021). Does the Google opinion’s analysis of fair use square with the Goldsmith decision?

MN: The flurry of fair use decisions this spring has certainly been interesting — let’s not forget that just a week after reversing on Goldsmith, the 2nd Circuit also handed down its opinion in the Marano v. Metropolitan Museum of Art, No. 20-31-4, 2021 WL 1235707 (2d Cir. Apr. 2, 2021), authored by a different panel of judges. The Marano decision found the Met’s use of an image by photographer Lawrence Marano depicting Eddie Van Halen’s “Frankenstein” guitar to be noninfringing, since the original photo served the purpose of “show[ing] what Van Halen looks like in performance,” whereas the museum’s use served to “highlight … the unique design” of the instrument itself and its significance in rock history.

Notably, in Marano, the 2nd Circuit specifically highlighted the context of the museum’s use, pointing to the fact that the Met’s exhibition included the disputed photo “alongside other photographs showing the physical composition of the guitar” and didactic text. This context was itself transformative — unlike in Goldsmith, where the “overarching purpose and function of the works at issue [was] identical” (namely, presenting “portraits of the same person”), the Met need not have manipulated or altered the underlying photo in order to achieve a transformative use.

Moreover, the court’s analysis of the “commercial” prong of the first factor seemed to implicitly focus on the public interest in the disputed use, noting the museum’s “cultural and academic reach” and accessibility to “millions of virtual visitors every year,” and explicitly characterizing the Met’s use as consistent with “copyright’s very purpose” of promoting the progress of science and useful arts.

While the Marano opinion was not entirely consistent with the Goldsmith concurrence’s admonition that the fair use analysis should not begin and end with transformativeness — indeed, in Marano, the 2nd Circuit reasoned that the finding of transformative use “is consistent with the remaining factors … tipping in favor of fair use” — some commentators have observed that the Met’s use of Marano’s photo is much closer to the “classic” fair uses enumerated by Section 107, including “criticism, comment … teaching, scholarship or research.” Taken together, the two 2nd Circuit fair use appeals decided just one week apart leave open important questions about the criteria for, and impact of, transformativeness.

Against this backdrop and just three days after the 2nd Circuit’s Marano opinion, the Supreme Court decided Google. Finding that the purpose of Google’s use of the disputed code was “to create a different task related system for a different computing environment … and to create a platform … that would help achieve and popularize that objective,” the Supreme Court decided the use was transformative and fair.

The Google opinion’s application of the fair use analysis to computer code (deemed by the court to be far from the creative “core” of copyright, unlike expressive visual artworks) makes it difficult to glean specific guidance for the appropriation art context, let alone to try to square the holdings directly. Thus far, however, commentators have generally perceived the Supreme Court’s view of transformativeness as applied in Google to be broad and expansive, unlike the retrenchment of the doctrine that the 2nd Circuit’s Goldsmith opinion represents.

It’s also possible to perceive the focus on the changed context of the secondary use (in the case of Google, its use of the disputed code in the context of smartphones, instead of on the desktop machines for which the code was originally authored) as being consistent with the 2nd Circuit’s analysis in the Marano opinion, but not with Goldsmith (in which opinion the 2nd Circuit noted that the context-shifting effected by creating a screenplay adaptation of a novel is paradigmatically derivative, but not sufficiently transformative to absolve the secondary user of the obligation to license the use of the underlying work).

And while the Google opinion undertakes the kind of analysis of each individual fair use factors for which the Goldsmith concurrence advocates, Justice [Stephen] Breyer’s discussion of the fourth factor adds another layer of complexity. Rather than considering just the economic impact on the markets of the primary and secondary users, the Supreme Court more broadly considers “the public benefits” likely to be produced by the copying at issue, i.e., the potential “market effect” of facilitating further creativity and development of new software applications.

The consideration of public benefit and fulfillment of the core purpose of the Copyright Act is consistent with Marano (and also with Goldsmith, although in the latter case, the tendency of the Prince Series to “produce an artistic value that serves the greater public interest” was effectively outweighed by the Foundation’s monetization of the artworks through royalties). However, in Goldsmith and Marano, public benefit is analyzed as part of the discussion of the “purpose and character” of the secondary use under the first factor, rather than under the fourth factor.

TR: What should copyright practitioners be watching for in terms of continued jurisprudential developments in this arena?

MN: Under 17 U.S.C.A. § 106(2), an author of the exclusive right to prepare derivative works, which are defined by 17 U.S.C.A. § 101 as works “based upon one or more preexisting works” and taking “any … form in which [the underlying work(s)] may be recast, transformed, or adapted” (emphasis added). This definition thus expressly recognizes transformativeness as a feature of derivativeness, which in turn means that reliance on a finding of transformativeness to determine fair use is actually somewhat conflated or circular. See Kienitz v. Sconnie Nation LLC, 766 F.3d 756 (7th Cir. 2014) (“To say that a new use transforms the work is precisely to say that it is derivative.”). Indeed, in the Goldsmith opinion, the 2nd Circuit recognized that “an overly liberal standard” for transformative use “risks crowding out statutory protections for [authors in relation to] derivative works.” Other commentators have gone further, suggesting that the transformative use test should be abandoned altogether, in favor of an analysis which primarily emphasizes market substitution.

With that criticism in mind, copyright practitioners should be watching to see how the different threads from these recent opinions continue to be pulled on or woven together. If the fourth factor is set to regain analytical prominence — including consideration of the “public benefit” inquiry now apparently displaced from the first factor — will we see a shift away from “transformativeness” language? How will the discussion of context-shifting develop? Are we to understand that a change to medium or platform (as between the original and secondary uses) is probative only for certain kinds of copyrighted works (e.g., software), but not others (e.g., photographs modified through a silkscreen printing process)? It’s clear that the fair use doctrine is actively in flux, and will continue to be thorny as applied specifically to appropriation art cases.