The March 26, 2021 decision of the U.S. Court of Appeals for the Second Circuit in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, Case No. 19-2420 (2d Cir. 2021) should strengthen the arguments of photographers fighting infringements of their works by narrowing the scope of the fair use defense that can be asserted against their claims.

In 2019 the U.S. District Court for the Southern District of New York (“SDNY”) held that a series of silkscreen prints and pencil illustrations of singer Prince by Andy Warhol constituted a fair use of an image by photographer Lynn Goldsmith because they “transformed” a depiction of a “vulnerable human being” into that of “an iconic, larger-than-life figure.” Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 382 F. Supp. 3d 312 (S.D.N.Y. 2019). However, a three-judge panel of the Second Circuit Court of Appeals reversed the lower court ruling, holding that the work was not transformative since it retained “the essential elements of its source material.” 

The Procedural Background

The photograph in question (“Photograph”) was taken in 1981 by professional photographer Lynn Goldsmith and licensed in 1984 to Vanity Fair to be used as an artist reference. That license permitted Vanity Fair to publish an illustration based on the Photograph once as a full page and once as a quarter page with attribution to Goldsmith. Goldsmith did not know that the artist using the Photograph as a reference was Andy Warhol, nor that he subsequently went further and created an additional 15 works – primarily silkscreens- based on the Photograph (the “Prince Series”). Goldsmith only discovered the Prince Series in 2016, when Vanity Fair published an image from the Prince Series upon Prince’s death without crediting her. When she discovered the infringement and reached out to the Warhol Foundation, the Foundation preemptively sued for a declaratory judgment that the use was fair. Goldsmith countersued for copyright infringement, and the SDNY granted summary judgment for the Foundation on its fair use claim.

The Fair Use Test

As we have previously discussed, Section 107 of the Copyright Act sets forth four non-exclusive factors to be considered in determining whether a use of a copyrighted work is “fair:” 

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 Purpose and Character of the Use

In analyzing the first factor, works deemed to be “transformative” are more likely to be considered fair use. Whether a work is “transformative” is to be evaluated by examining how it may “reasonably be perceived.” Classic examples of transformative works are copying from an original for the purpose of criticism or commentary.

In holding Warhol’s use to be fair, the SDNY relied on the 2013 decision of the Second Circuit in Cariou v. Prince, 714 F. 3d 694 (2d Cir. 2013), in which the Court adopted a broad interpretation of “transformative use,” finding that certain works of artist Richard Prince incorporating photographs by Patrick Cariou were “transformative” even though they did not comment on or criticize the original work. While not overruling Cariou, the Second Circuit in Warhol clarified that ruling (which had been widely criticized in the intervening years), stating that a secondary work that adds a new aesthetic or new expression to its source materials is not necessarily transformative. Importantly, the Court noted that an overly broad interpretation of what is transformative would dilute statutory protections for derivative works. To be transformative, the Second Circuit states, a secondary work must “reasonably be perceived as embodying an entirely different artistic purpose, one that conveys a ‘new meaning or message’ entirely separate from its source material.”

That determination must be based on an objective test. Citing Nimmer on Copyright, the Court stated:

… whether a work is transformative cannot turn merely on the stated or perceived intent of the artist or the meaning or impression that a critic – or, for that matter, a judge – draws from the work. Were it otherwise, the law may well “recogniz[e] any alteration as transformative.”

Applying this analysis, the Court found that the Prince Series retained the essential elements of the source material without significantly adding to or altering those elements (“…Warhol’s modifications serve chiefly to magnify some elements of that material and minimize others”). It concluded that the images in the Prince Series “are closer to what the law deems ‘derivative’ than ‘transformative.'”

Effect on the Market for the Original Work

Having determined that Warhol’s use was not transformative, the Court continued its analysis of the four factors, disagreeing with the SDNY and concluding that all four factors favored Goldsmith. Of particular interest to photographers is its evaluation of the fourth factor –  the effect on the market for the use of the original. Although it agreed with the SDNY that the two works had different markets for direct sales, it found that the Prince Series posed a threat to Goldsmith’s potential ability to earn royalties by licensing other artists to create derivative works from the photograph. The fact that Goldsmith did not contend that she had actually exploited the derivative market was not relevant to the inquiry.

The Warhol Foundation has said that it plans to challenge the decision.

L&L routinely represents photographers whose works have been used by others without their permission. The decision in Warhol provides renewed protection against the fair use defense of the alleged infringer and clarifies the line – blurred in the wake of Cariou – between the photographer’s right to create derivative works and the right under fair use principles for third parties to create truly transformative works.