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How Does the Landmark Decision – First in Last 30 Years on Fair Use – Affect Music, Entertainment, and Creative Industries?

Published in Westlaw Today

It has been nearly 30 years since the United States Supreme Court has ruled on fair use. On May 18, in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, et. al, the Supreme Court ruled that the late pop artist Andy Warhol’s silkscreen portraits of the late rock star Prince infringed on the copyright of the original photo taken by photographer Lynn Goldsmith.

In a 7-2 decision, the Supreme Court Justices held that Warhol’s images did not constitute fair use. This decision may have the Warhol Foundation paying restitution in Diamonds and Pearls (only Prince song reference in this article).

This significant decision will impact the entertainment and creative industries – from music and TV to film and visual art – and gives a little more flesh on the bones to better determine how to weigh the fair use factors. In particular, it expands upon the understanding of “transformative use,” explaining how the transformative qualities of a work must be balanced with the purpose and character of the work under the fair use doctrine.

The ruling provides further protection for preexisting copyrighted content which newly created works are based on (i.e. derivative works). The ruling also emphasizes the better safe than sorry belief that securing licenses from content owners, rather than assuming or relying on the fair use doctrine, is an ideal approach.

A key excerpt from Justice Sonia Sotomayor’s majority opinion:

“Lynn Goldsmith’s original works, like those of other photographers, are entitled to copyright protection, even against famous artists. Such protection includes the right to prepare derivative works that transform the original. The use of a copyrighted work may nevertheless be fair if, among other things, the use has a purpose and character that is sufficiently distinct from the original. In this case, however, Goldsmith’s original photograph of Prince, and AWF’s copying use of that photograph in an image licensed to a special edition magazine devoted to Prince, share substantially the same purpose, and the use is of a commercial nature.”

Background of the Warhol Prince Controversy

Black and White Photo of Prince in 1981 by Lynn GoldsmithIn 1981, Newsweek commissioned Goldsmith to photograph Prince for publication alongside an article about him. In 1984, Goldsmith licensed one of her Prince photos to Vanity Fair for a one-time use as an “artist reference for an illustration” for $400. Warhol was hired by Vanity Fair to create the illustration and used Goldsmith’s photo in creating a purple silkscreen portrait of Prince. Warhol’s portrait appeared in Vanity Fair’s November 1984 issue with a credit to Goldsmith for the “source photograph.”

After Prince died in 2016, Vanity Fair’s parent company, Condé Nast, asked the Warhol Foundation about reusing the 1984 Vanity Fair image for a special edition commemorative magazine. Since 1984, Warhol created 15 additional works, called the “Prince Series”, derived from Goldsmith’s photograph.

Orange Silkscreen Portrait of Prince by Andy WarholWhen Condé Nast learned about the “Prince Series” images, it licensed an orange silkscreen print of Prince (“Orange Prince”) to publish in its commemorative magazine for $10,000 from the Warhol Foundation. Goldsmith did not know about the “Prince Series” until 2016, when she saw “Orange Prince” on the cover of Condé Nast’s magazine. Goldsmith was not compensated or given credit for “Orange Prince.”

Goldsmith notified the Warhol Foundation that it infringed her copyright in the photo. The Warhol Foundation sued Goldsmith for a declaratory judgment of non-infringement. Goldsmith countersued. The District Court for the Southern District of New York considered the four fair use factors and granted the Warhol Foundation summary judgment on its fair use defense. The Second Circuit Court of Appeals reversed, finding that all four fair use factors favored Goldsmith.

What is Fair Use?

Prince Series by Andy WarholFair use is defined in Section 107 of the Copyright Act of 1986. It is a defense to copyright infringement that states reproductions and certain uses of copyrighted works for purposes such as criticism, comment, news reporting, teaching, scholarship, or research, are not considered copyright infringement. In determining whether the use of a work is a fair use, courts consider the following factors:

  1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
  2. the nature of the copyrighted work;
  3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
  4. the effect of the use upon the potential market for or value of the copyrighted work.

Under the first factor, whether or not the use is transformative is important to determine. A new work is likely considered transformative if it adds something new with a further purpose or different character, meaning, or message than the original work. If a new work is considered transformative, then its use of a preexisting work is more likely to be fair use. A final fair use determination depends on balancing all of the factors.

In the Supreme Court hearing, the sole question presented is whether 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,” §107(1), is reflective of the Warhol Foundation’s recent commercial licensing to Condé Nast.

The Supreme Court analyzed the transformative nature, purpose and character of Warhol’s print and balanced it against the purpose and character of Goldsmith’s photo. Sotomayor wrote, “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 Warhol Foundation “offered no other persuasive justification for its unauthorized use of the photograph,” Sotomayor wrote.

The takeaways from the majority opinion are that the Warhol portrait did not have a sufficiently different purpose from Goldsmith’s photo – both were commercial in nature and for magazine publication – and the minor modifications Warhol made to the photo were not transformative enough and too closely resembled Goldsmith’s photo.

“Copying might have been helpful to convey a new meaning or message. it often is,” Sotomayor wrote. “But that does not suffice under [fair use]. Nor does it distinguish [Warhol] from a long list of would-be fair users: a musician who finds it helpful to sample another artist’s song to make his own, a playwright who finds it helpful to adapt a novel, or a filmmaker who would prefer to create a sequel or spinoff, to name a few.”

Impact on Music and Entertainment Industry

The Supreme Court has not ruled on the fair use doctrine since 1994 in Campbell v. Acuff-Rose Music, Inc. In Campbell, the rap group 2 Live Crew created a parody of Roy Orbison’s Oh, Pretty Woman by sampling Orbison’s song in their own song called Pretty Woman.

The Supreme Court ruled that a parody has transformative qualities, and may be considered a fair use, since a parody imitates an original work’s style and characteristics for comedic effect.

The Warhol decision provides an additional analytical framework for practitioners to consider in advising music clients regarding the fair use defense. 

Even after this decision, fair use continues to be a gray area of copyright law. Thus, advising artists and other content creators to obtain licenses to use preexisting works is the safest route. It is often more cost effective for an artist or other content creator to obtain a license than proving fair use in a copyright infringement claim.

About Our Authors

About Lynn Morrow: Lynn Morrow is the Adams and Reese Entertainment and New Media Practice Team Leader and Partner in the firm’s Nashville office. Representing regional, national and international clients, Lynn advises and advocates for businesses and organizations that promote music and other forms of entertainment, and helps artists, authors, songwriters, music publishers and producers negotiate deals. She also works with independent publishing companies, record companies, and large non-profit ministries with a music element, to protect their intellectual property and content.

About Phil Kirkpatrick: Phil Kirkpatrick is Special Counsel with Adams and Reese, and his litigation career spans more than 40 years in entertainment, intellectual property/technology, products liability and commercial matters. He has represented artists, songwriters, producers, musicians, managers and major music groups including labels, publishers and merchandisers. He also handles copyright termination and recapture litigation.

About Kendall Deranek: Kendall Deranek is an attorney in the Adams and Reese Entertainment and New Media practice in the Nashville office. Her focus is on entertainment, copyright, and trademark transactions where she has experience with producer, guest artist, recording, publishing, and licensing agreements. Kendall’s entertainment experience extends into the film and television industries, including how those industries intersect with music.