The justices' 7-2 decision addresses fair use, "transformative" artistic changes, and a 1981 photo of Prince

On May 18, 2023, the Supreme Court issued its hotly anticipated decision exploring the elusive boundaries of fair use in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, No. 21-869. The case concerned the Warhol Foundation's license of Andy Warhol's colorized silkscreen portrait of the recording artist and cultural icon, Prince, which modified a black-and-white photograph taken by a rock photographer, Lynn Goldsmith. In a 7–2 decision, Justice Sotomayor, writing for the majority, ruled that the Warhol Foundation's use was not fair.

Background

In 1981, Goldsmith, a professional photographer, took a series of photographs of the then–rising star Prince in concert and in her studio, including the back-and-white image above. Slip op. at 3.

In 1984, Goldsmith licensed that image to Vanity Fair to serve as an "artist reference for an illustration," which would be published in the magazine "one time" only. Id. In exchange, Goldsmith received $400 and a source credit. Id. Unbeknownst to Goldsmith, Vanity Fair hired artist Andy Warhol to create the illustration. Id. Using Goldsmith's photograph, Warhol created a silkscreen portrait of Prince's face colorized in purple that ran alongside an article about Prince in the November 1984 issue. Id. at 3–5. Warhol also created 15 other works based on the photograph: 13 silkscreen prints in various colors and two pencil drawings. Id. at 4–5, 39.

Three decades later, in 2016, Condé Nast paid $10,000 for a license from the Warhol Foundation to use one of the Prince silkscreens ("Orange Prince," above) for an in memoriam edition following Prince's death. Id. at 5–6.

Between 1981 and 2016, Goldsmith had licensed images of Prince to magazines, including a 1981 concert photo for Newsweek, the 1984 artist reference for Vanity Fair, and another photograph of Prince that ran in a collector's edition of People in 2016. Id. at 6–7.

When Goldsmith saw Orange Prince on the cover of the Condé Nast magazine, she notified the Warhol Foundation that it had infringed her copyright. Id. at 8–9. The Foundation sued Goldsmith for a declaratory judgment of noninfringement or fair use, and Goldsmith counterclaimed for infringement. Id. at 9.

The district court granted summary judgment for the Warhol Foundation, holding that Warhol's Prince series made fair use of Goldsmith's photograph. Id. The Second Circuit reversed, holding that all four fair-use factors favored Goldsmith and the Prince series infringed her copyright. Id. at 10–11. The Supreme Court granted certiorari.

The Decision

The Court did not decide whether the creation, display, or sale of Orange Prince or any of the 15 other works in Warhol's Prince series infringed or constituted fair use. Id. at 21. Rather, it granted review to assess the applicability of 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"—to the Foundation's "commercial licensing of Orange Prince to Condé Nast." Id. at 12, 21 (quoting 17 U.S.C. § 107(1)).

Under the Court's precedents, the first fair-use factor focuses on whether the challenged use is "transformative," that is, whether it has a purpose or character different from the original. Id. at 16. The Court repeatedly stated that transformativeness "is a matter of degree." Id. at 12, 15–16, 19. Courts must consider "to what extent" the use is transformative. Id. at 16 (emphasis in original). The more transformative a use is, the more likely it is to be fair use. Id. The less transformative it is, the less likely it is to be fair use, and the more other factors like commerciality will weigh against fair use. Id. at 18. Critically, the Court limited its holding in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), which upheld fair use in the context of musical parody, explaining that Campbell "cannot be read to mean that § 107(1) weighs in favor of any use that adds some new expression, meaning, or message." Slip op. at 28. As the Court explained, "an overbroad concept of transformative use, one that includes any further purpose, or any different character, would narrow the copyright owner's exclusive right to create derivative works." Id. at 16.

Next, the Court emphasized that the inquiry focuses on the "specific context" of the allegedly infringing use. Id. at 33. Here, the context was licensing Orange Prince to a magazine, and not, for example, creating the work itself, displaying it in a museum, or selling it to a collector. Id. at 21. The fair-use inquiry, the Court observed, would differ in those contexts. Id. at 21 n.10.

Applying these principles, the Court ruled that the licensing was not sufficiently transformative to find for the Warhol Foundation on the first factor. The Foundation licensed Orange Prince to Condé Nast to appear on the cover of a commemorative magazine about Prince. Id. at 22. Similarly, Goldsmith had licensed her photograph to a magazine—as she had numerous times before—to serve as an artist reference for an illustration in a Vanity Fair article about Prince. Id. Thus, the Court found that the purpose of Goldsmith's photograph and the commemorative cover with Orange Prince is "substantially the same": "Both are portraits of Prince used in magazines to illustrate stories about Prince." Id. at 22–23. The Foundation's use was commercial, as it had licensed the work for a fee, just as Goldsmith had done with Vanity Fair. Id. at 24. The substantially same purpose of the use and its "commercial character" both pointed against fair use. Id. at 25. The Court noted a relationship between the first and fourth fair-use factors: When works have substitutable purposes, they are also likely to be market substitutes, which weighs against fair use under the fourth factor. Id. at 24 n.12.

The Court acknowledged that Warhol made certain changes to the photograph, namely, that Orange Prince "crops, flattens, traces, and colors" the photo, which "adds new expression." Id. at 8, 13. The Court further observed that this expression reasonably portrays Prince as iconic—a different purpose than Goldsmith's photorealistic portrayal. Id. at 33. But the Court held "that degree of difference is not enough" to favor the Warhol Foundation, given that the specific uses here still had the same underlying purpose: "to illustrate a magazine about Prince with a portrait of Prince." Id.

Because only the first factor was at issue in the Supreme Court, and the Second Circuit held that all the other factors favored Goldsmith as well, the Court affirmed the Second Circuit's judgment rejecting the Foundation's fair-use defense. Id. at 38.

Justice Kagan, joined by Chief Justice Roberts, dissented, on the basis that Warhol had fundamentally changed the work's character and meaning, lamenting that the majority opinion gave short shrift to Warhol's artistry and social commentary and would stifle creativity. Id. at 18, 36 (Kagan, J., dissenting). The majority and the dissent were unusually sharp, with "pages of commentary and fistfuls of comeback footnotes." Id. at 4 n.2.

Takeaways

The Court's decision is notable for several reasons:

• The decision may restrict room for artistic creativity that borrows from prior works (as all art must to some extent). Id. at 35–36.
• The opinion illustrates the subjectivity and unpredictability in assessing fair use—as the majority and dissent took drastically different positions on the significance of Warhol's new expression. Id. at 17.
• The Court's increased focus on the commercial nature of the secondary use may be seen as elevating the economic interests of the owner of the original work over the creative and artistic contributions of the secondary use.
• The decision reflects a doctrinal shift to focus on "the specific context of the use," by requiring a comparison between the context of the secondary use and the context of the original work. Id. at 33 (majority opinion). That may increase the need for facts in what is already a fact-intensive inquiry. For instance, courts may need evidence of the ways the original creator used his or her work. This may not be apparent from the face of a complaint, potentially making it more difficult to assert a fair-use defense on a motion to dismiss.

Only time will tell how the ramifications of this decision will play out in the lower courts and how it will impact the creation of new works.

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