Supreme Court in Warhol case resets significance of “transformative” issue in fair use analysis

In its recent decision in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, the U.S. Supreme Court has taken the opportunity to again address the fair use defense to copyright infringement. Since the Court’s decision in Campbell v. Acuff-Rose Music Inc., 510 U.S. 569, 575 (1994), the question of whether an allegedly infringing work is transformative – i.e., whether it added new expression, meaning, or message to the original work – has dominated fair use jurisprudence. Indeed, many courts have placed significant, and seemingly determinative, weight on that question, finding “transformative” works insulated by the fair use defense with little or no regard to the defense’s statutory elements. With its recent decision, the Court has taken steps to reset the significance of the “transformative” issue in the fair use analysis.

U.S. copyright law seeks to balance two primary goals – encouraging creativity through protection of original works of authorship, while promoting broad public availability of creative works, including for use in new works. See Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, 598 U.S., Slip Op. No. 21-869 at 13 (2023); see also Campbell, 510 U.S. at 575. The Copyright Act thus includes a defense that permits the “fair use of a copyrighted work” for “purposes such as criticism, comment, news reporting, teaching ... scholarship, or research.” 17 U.S.C. § 107. The act identifies four nonexclusive factors that must be considered in evaluating fair use: “(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.” Id.

In 1981, Lynn Goldsmith was hired to photograph the musician Prince, who was then “up and coming” as a “hot young musician.” In 1984, Vanity Fair sought to license one of Goldsmith’s photographs as an “artist reference” for an illustration of Prince, to be published in an upcoming Vanity Fair article. Goldsmith agreed, and Vanity Fair hired Andy Warhol to create the illustration. Warhol then created 14 silkscreen portraits and two pencil drawings based on Goldsmith’s photo, one of which Vanity Fair published. After Prince died in 2016, the Andy Warhol Foundation (AWF) licensed one of the other silkscreen portraits, called Orange Prince, to Vanity Fair’s parent company Condé Nast for a magazine tribute to the late artist. When Goldsmith informed AWF that she believed that the licensing of Orange Prince to Condé Nast infringed her copyright, AWF sued for declaratory relief of noninfringement, and Goldsmith countersued for infringement. The district court found that the fair use defense permitted the challenged licensing, but the Second Circuit disagreed, finding that all four fair use factors weighed in Goldsmith’s favor.

The question before the Court was a narrow one: whether the Second Circuit correctly held that the first fair use factor, “the purpose and character of the use,” weighed in Goldsmith’s favor. In a 7-2 decision authored by Justice Sotomayor, the Court affirmed the Second Circuit. While acknowledging that Orange Prince had unique creative elements and that “new expression may be relevant to whether a copying use has a sufficiently distinct purpose or character,” the Court explained that such new expression is not, without more, dispositive. Slip Op. No. 21-869 at 12. Instead, courts must assess “‘whether and to what extent’ the use at issue has a purpose or character different from the original … The larger the difference, the more likely the first factor weights in favor of fair use. The smaller the difference, the less likely.” Id. at 16. The Court further explained that transformation alone cannot determine fair use, because such an approach would undermine the exclusive right of copyright owners to create derivative works. Id.; see also 17 U.S.C. § 106(2). To preserve that right, “the degree of transformation required to make ‘transformative’ use of an original must go beyond that required to qualify as a derivative.” Slip Op. at 16. The Court further emphasized that whether the use of a copyrighted work has a “further purpose or different character” is “a matter of degree, and the degree of difference must be balanced against the commercial nature of the use.” Id. at 19-20.

Applying these principles, the Court held that because Goldsmith’s photograph, which she had licensed to multiple magazines, and AWF’s licensing of Orange Prince to Condé Nast for use in a magazine, “share substantially the same purpose,” and because AWF’s use was commercial, the first factor weighed against fair use. Id. at 25. Critically, the Court expressly declined to state whether Warhol’s original creation of Orange Prince constituted a fair use of Goldsmith’s photograph. Id. at 21, 37. On the contrary, the majority explicitly left open the possibility that the “same copying may be fair when used for one purpose but not another.” Id. at 20.

In an impassioned dissent, Justice Kagan, joined by Chief Justice Roberts, criticized the majority for failing to appreciate how Warhol’s works differed from Goldsmith’s photo, contending that Warhol’s works were a “perfect example” of transformative use. The dissent also expressed concern that the decision will stifle creativity by limiting artists’ ability to engage in transformative copying.

Despite the concerns articulated in the dissent, the Court’s decision is far from a death knell for transformative uses of existing works. Instead, the decision rebalances the analysis by focusing on the manner in which a new work is used, and by clarifying that the degree to which a new use is transformative is relevant to, but not dispositive of, the fair use inquiry. The decision thus helps course-correct a jurisprudence that has largely treated whether a subsequent work is transformative as the “end all and be all” of the fair use analysis and shifts at least some weight back toward the statutory language of the defense.

This article has been prepared for informational purposes only and does not constitute legal advice. This information is not intended to create, and the receipt of it does not constitute a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. The content therein does not reflect the views of the firm.