Andy Warhol Foundation vs. Goldsmith: A Transformative Opinion or Much Ado About Nothing?

Sherman & Howard L.L.C.

Sherman & Howard L.L.C.

Over the past several weeks there has been much commentary regarding the U.S. Supreme Court's recent opinion in Andy Warhol Foundation ("AWF") v. Goldsmith. The facts of the case date back to the early 1980s when Vanity Fair licensed a photograph of Prince taken by acclaimed photographer Lynn Goldsmith. The purpose of the license was to allow another artist to use Goldsmith's photograph as an "artist's reference" for a new work that would be used by Vanity Far for an article about Prince. Goldsmith agreed to license her photograph for $400 along with the condition that the license was for a "one-time" use. The licensed photograph was then used by famed artist Andy Warhol, who made a silkscreen portrait of Prince based on the photograph.  

Fast-forward to 2016 and the untimely death of Prince and Goldsmith discovered for the first time that after the use of Warhol's silkscreen in Vanity Fair the image had been used again. Goldsmith made this discovery as a result of the fact AWF had licensed one of those silkscreens ("Orange Prince") to Conde Nast to use in connection with an article commemorating Prince's life. Upon learning this, Goldsmith informed AWF that she believed it had infringed her copyright. AWF responded by filing a declaratory judgment action, and Goldsmith counterclaimed with an infringement claim. The lawsuit focused on whether Warhol's Prince silkscreens qualified as fair use under the Copyright Act.

The trial court found in favor of AWF on its fair use defense. Goldsmith appealed to the Second Circuit, which reversed and remanded the trial court's ruling. Specifically, the Second Circuit concluded that each of the four statutory fair use factors weighed in favor of Goldsmith, not AWF. AWF appealed to the U.S. Supreme Court, which affirmed the Second Circuit's ruling. The Supreme Court focused solely on the first fair use factor and concluded that the first factor did not weigh in favor of AWF because both Warhol's silkscreen and Goldsmith's photograph were being used for the same commercial purpose - i.e., to license a portrait of Prince for use in a magazine publication about the musician.  

The Supreme Court's opinion has resulted in much debate over the future application of the fair use defense and what should be considered transformative use. Many of these concerns are addressed in Justice Kagan's lengthy dissent chastising the majority for discarding the realities of the development of new artistic expression and the need to build upon and transform the works of others. Instead, for Justice Kagan -- and many others -- the purpose of the first factor is to focus on the "character" of the new work and whether "the user of the work has made the kind of creative contribution that copyright law has as its object."     

However, what is being glossed over in much of this reaction and commentary to the Warhol decision --  and its long-term implications on fair use -- is the procedural history that brought this case before the Supreme Court in the first place. At the outset, the case focused on all of the works Warhol created using Goldsmith's photo. But as the litigation progressed, the issues were narrowed, and the parties filed competing summary judgment motions on the issue of whether AWF's licensing of one of those works to Conde Nast qualified as fair use. By the time the case reached the Supreme Court, the issues were narrowed even further and focused solely on whether the Second Circuit erred in concluding the first factor weighed in favor of Goldsmith on the grounds the work was not transformative.  

This procedural background is important in understanding the majority's opinion because as the majority notes: 

Although new expression may be relevant to whether a copying use has a sufficient distinct purpose or character, it is not, without more, dispositive of the first factor. Here, the specific use of Goldsmith's photograph alleged to infringe her copyright is AWF's licensing of Orange Prince to Conde Nast.  As portraits of Prince use to depict Prince in a magazine stories about Prince, the original photograph and AWF's copying use of it share substantially the same purpose.

In other words, the majority's opinion focuses solely on the alleged infringing use before them - i.e., AWF's licensing of one of Warhol's Prince silkscreens for use in a magazine article. The majority was not addressing whether any other use of that work, or any of the other Prince silkscreens, would be considered fair use in a different context.  

Moreover, by taking into account this procedural background, it helps address one of the primary concerns of Justice Kagan's dissent, which is that the majority's opinion is inconsistent with the Court's prior ruling in Google v. Oracle (141 S.Ct. 1183), where the Court held that Google's verbatim copying of portions of Oracle's source code was fair use because Google's use was transformative, even though both companies were using the code for software application purposes.  

However, a key difference between those two cases, and opinions, was that in Google the fair use defense was decided by a jury, and the issue presented to both the Second Circuit and the Supreme Court was whether the lower court erred in not granting Oracle's post-trial motions to reverse the jury's verdict. Thus, on appeal, before delving into the four fair use factors, the Second Circuit's opinion included a lengthy discussion on the proper standard of review given that the ultimate decision regarding a fair use defense is a mixed question of law and fact. The Second Circuit explained that under the required standard of review, its analysis needed to separate the "historical facts" from the legal issues and noted that "[i]n the fair use context, historical facts include the origin, history, context and defendant's use of the copyrighted work." 

Thus, when the Google case got to the Supreme Court, the Court held that the first factor weighed in favor of Google because Google was using portions of Oracle's source code "to create a new platform that could be readily used by programmers, its use was consistent with that creative purpose that is the basic constitutional objective of copyright itself." In other words, because Google was using Oracle's source code for a new purpose (i.e., use in Android smartphones), its use was transformative. But importantly, in reaching that conclusion, the Court noted: 

The jury hearing that Google limited its use of the Sun Java API to tasks and specific programming demands related to Android. . . . To repeat, Google, though Android, provided a new collection of tasks operating in a distinct and different computing environment.

In Warhol, by contrast, the parties agreed there were no disputed facts. In other words, the parties agreed - as a factual matter - that AWF's infringing use was substantially the same as Goldsmith's use of her work. As a factual matter, that conclusion may be true. However, it's possible the Supreme Court's ultimate ruling may have been different if AWF argued - and presented evidence - that viewing the use as licensing a portrait to a magazine is too broad. Rather in the market of licensing art work for use in publications, there are important factual distinctions between licensing original artwork from photographs. Or, put another way, the Supreme Court's opinion in Google may have been different if the parties had agreed -- as a factual matter -- that Google's use in connection with Android products was substantially the same as Oracle's use. But that was not the case in Google, the Court was able to rely on facts presented by Google to conclude that source code copying for use in a different platform can be transformative. 

Therefore, when the Warhol opinion is reviewed in the context of its procedural history and corresponding standard of review, the most significant impact of the majority's opinion may just be a reminder to all parties involved in fair use litigation that the procedural posture of your case, and the corresponding standard of review, can have an impact on the ultimate decision. And while that is an important reminder, that fact is not new or transformative because in litigation -- whether copyright or otherwise -- your overall strategy should always take into account both the substance of your facts and claims and how to use procedural rules and standards of review to your advantage.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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