More Balanced Interpretation of US “Transformation” Fair Use Test gives Rightsholders Better Leverage to Protect their Works

Photo: Author

A couple of recent cases in the US involving (mis)appropriation of copyrighted photographs indicate the tide may be changing with respect to the interpretation of what constitutes fair use, moving from a very liberal interpretation of “transformation” that has been used in recent years to justify unauthorized reproduction of copyrighted works by making them into “something (allegedly) new”, to a more balanced interpretation where the rights of the original creator/rightsholder are given greater weight. These cases are Andy Warhol Foundation v Goldsmith, decided by the US Supreme Court in May of 2023 and now, just last week, two cases (Graham v Prince and McNatt v Prince) in New York District Court. These involved photographers Donald Graham and Eric McNatt who had sued prominent appropriation artist Richard Prince and two well-known galleries, Gagosian and Blum & Poe, for copyright infringement. A final judgment was entered in these cases wherein Prince was found liable for willful infringement of the photographs, required to pay damages totalling five times the value of the infringing works he sold, plus paying the plaintiff’s legal costs, while also being restrained from reproducing, modifying, or distributing the contested artwork that was developed from the appropriated photographs. This is a big deal for photographers and other creators whose work is appropriated by others without authorization on the pretext of “transformation”. It could even have a ripple effect outside the US.

Last week my blog post was about photography, looked at through a historical lens from a copyright perspective. Photographers initially had a struggle to gain copyright protection for their works, at least in the US, but for many years now have enjoyed the benefits of such protection. However, just because photographs are recognized as copyright protected works doesn’t mean that infringement does not occur on a regular basis, or that photographers have not had their work appropriated without authorization as a result of court rulings interpreting what constitutes fair use (in the US).

For those readers not immersed in the minutiae of copyright, what follows is a brief explanation about fair use in the US and fair dealing in Canada. (Others may choose to skip to the next paragraph). Fair use is the provision in US law that allows users to reproduce parts of copyrighted works without permission or authorization from the rights holder, subject to various limitations and conditions. Unlike in Canada or a number of other countries where legal exceptions to copyright are based on a specified list of “fair dealing” purposes, the US fair use list is only illustrative. There is a four-part test in the US that courts use to judge whether an unauthorized use constitutes fair use. The four factors that are weighed are; (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. The “transformation test”, which has been an important factor in determining fair use in the US in recent years, comes in under the first category of the purpose and character of the use. Transformative use has been interpreted by US courts to mean the addition of new expression or meaning to an original work to create something new with a different purpose. Parody, which is both a fair dealing exception in Canada and one of the illustrative fair use categories in the US, is such an example where the original work is transformed to give it a new and different meaning. But transformation in the US can involve much more than just parody. The 2015 Google Books case (Authors Guild v Google Inc) where Google was sued for copyright infringement for unauthorized scanning and display of copyrighted works was decided, in Google’s favour, on the basis of “transformation”. The US Court of Appeals found that, “Google’s making of a digital copy to provide a search function is a transformative use, which augments public knowledge by making available information about Plaintiffs’ books without providing the public with a substantial substitute for matter protected by the Plaintiffs’ copyright interests in the original works…”. Notably Google, in settling an earlier case with US publishers, had agreed to limit the public display of a copied work to no more than 20 percent of its contents. The transformative use argument has been used as a fair use defence in a number of US copyright cases, including some involving photography. In these cases, the entire photograph was taken without authorization but then “transformed” by the addition of some new content.

One notable such case is Cariou v Prince, finally decided on appeal in 2013. In this case, Richard Prince successfully claimed fair use for his adaptation of photographs taken by French photographer Patrick Cariou. Prince did a series of paintings that incorporated photos of Rastafarians taken from Cariou’s book “Yes, Rasta”. The Appeal Court found that Prince’s paintings were not only sufficiently transformative to be different works, but they did not compete with the original in the marketplace. This case was part of a trend where US courts successively widened the interpretation of fair use based on a liberal application of the transformation principle.

The antidote to Cariou is the more recent Warhol v Goldsmith case, mentioned above. In this case, celebrity photographer Lynn Goldsmith sued the Warhol Foundation for copyright infringement in 2017 after she learned that her 1981 photograph of the noted singer-songwriter-musician Prince, who died in 2016, (not Richard Prince the artist, just to confuse things), had been used by Warhol (who himself died in 1987) to create a series of 14 silk screen images back in 1984. At the time, Goldsmith had been paid $400 by the publisher Conde Nast for a one time use of her photograph as an artist’s reference for Warhol to create an image for a Vanity Fair article about Prince, Purple Fame, published in November 1984. However, she was unaware that Warhol had created a whole series of prints from her photo. Years later, Vanity Fair paid the Warhol Foundation $10,000 for use of another of the prints in the series, Orange Prince, in an article to mark Prince’s death. Goldsmith was neither paid nor credited. She sued (actually countersued) for infringement after the Foundation sought a declaratory judgment that the creation of the series was fair use. It was an uphill battle for Goldsmith against a very wealthy and well-known Foundation, but in the end she won. The US Supreme Court decided in May of 2023 that Goldsmith’s copyright had been infringed—but only in the one instance regarding the use of Orange Prince, which was seen as a market substitute for Goldsmith’s original photograph. The ruling was 7-2 with Justice Sotomayer writing “Goldsmith’s original works, like those of other photographers, are entitled to copyright protection, even against famous artists”. 

The doors of transformative use, swinging wide open for the past couple of decades, had just closed a bit. It is not irrelevant to note that the transformative use argument is the main fair use defence put forward by AI developers to justify their unauthorized scraping and ingestion of copyrighted content to train generative AI algorithms. Now, on the heels of the Warhol v Goldsmith decision, we have the outcome of the two photographer’s cases against Richard Prince and the galleries. This suggests that the seemingly open-ended “transformation” standard in the US is changing, or at least that the Supreme Court’s Warhol decision is sending a message that open season on photographers (and other creative works) by appropriation artists may be coming to an end.

One of the two photography cases against Richard Prince goes back almost eight years, to about the time that Prince prevailed in the Cariou case. Graham, whose 1998 photograph “Rastafarian Smoking a Joint” was appropriated by Prince, launched his suit in 2016. McNatt’s suit, for infringement of his photograph of musician Kim Gordon, came four years later. Last year Richard Prince tried to get the cases dismissed, but the judge refused. Prince had added very little to the photographs, mostly some gibberish text, yet the “artworks” were sold for substantial sums and exhibited in the prestigious Gagosian Gallery, a co-defendant.

The cases did not go to trial by jury. On January 25, a final judgement was entered by the parties and accepted by the court in which Prince agreed to pay the damages, which were far in excess of what statutory damages would have been. While Richard Prince’s attorneys are claiming that the artist did not admit infringement, the fact that he decided to avoid going to trial and agreed to the damages is a pretty realistic appraisal of what the likely outcome of a trial would have been. Unlike a “settlement”, which the two photographers refused, a “final judgement” is not subject to a confidentiality agreement as to the terms. According to legal counsel representing the photographers, they rejected a confidential settlement (where damages could have been higher) because they wanted the appropriation issue exposed. They succeeded.

It is impossible to know precisely what impact the Warhol/Goldsmith case had on this outcome, but it is surely not coincidental that after almost eight years of litigation (in the case of plaintiff Graham) that Richard Prince decided to put this behind him and cut his losses just months after the Supreme Court’s decision. After Warhol, the Prince case marks another example of some restoration of balance to the interpretation of transformative use. It is not enough to simply add a few features to an original work, and claim it is somehow “transformed” into something entirely different. The lawyer representing the photographers described this as a David versus Goliath case, where a couple of individual photographers took on a major artist and gallery–and won. This demonstrates that fair use as applied in the US clearly has limits and that even the rich and famous can be called to account.

It remains to be seen whether this trend, which started with Warhol, will continue but it is a positive sign for artists wanting to protect their work from unauthorized reproduction and appropriation. The Warhol case has no direct legal impact outside the United States, of course, but it has been taken note of elsewhere. It could mark a turning of the tide. Proponents of further widening copyright exceptions in Canada by modifying fair dealing criteria to be illustrative, as in the US, rather than prescriptive as is currently the case, (by inserting “such as” when describing fair dealing categories) will take little comfort from this. The false allure of more permissive unauthorized copying propped up by the US transformative use doctrine has already seeped across many borders. Now perhaps the counter trend will also spread.

With respect to the Warhol case, one Canadian IP lawyer has stated “I think SCOTUS’s application of fair use to the facts, in this case, will be persuasive to Canadian courts when they have to apply fair dealing to similar facts.” While the transformation doctrine does not directly apply in Canada, it has some applicability with respect to parody. We shall see in time what the long-term impact may be. But from the perspective of creators everywhere, reinserting some much-needed balance into the US fair use transformation standard is a welcome and important development as copyright law continues to evolve.

© Hugh Stephens, 2024.