Much discussion has surrounded the long-anticipated May 2023 decision of the Supreme Court in Andy Warhol Foundation for the Visual Arts v. Goldsmith, now telling referred to as “the Goldsmith case.” 143 S. Ct. 1258 (2023) The Court held that the first fair use factor — purpose and character of the use — with regard to the Warhol Foundation’s licensing of Andy Warhol’s “Orange Prince” did not support fair use of Lynn Goldsmith’s photograph of Prince.

While based on a very narrow set of facts, the decision has the potential to impact works created by generative artificial intelligence (“AI”) technology that rely heavily on the fair use doctrine.

Prior to the Goldsmith decision, it was arguable that a court would find the creation of a generative AI platform using unlicensed data to be protected by fair use. In Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183 (2021), the Court held that copying a portion of Oracle’s copyrighted Java program to use in programming Google’s Android devices was a transformative fair use, as the new product was “a highly creative and innovative tool.” Id. at 1203. Arguably, AI tools like ChatGPT, Midjourney and GitHub are also “highly creative and innovative” technologies. Through machine learning techniques, these tools use copies of millions of different works, almost all of them copyrighted, in the process of creating “new” work based on that data.

With the focus shifting from “transformative use” to how the AI work competes with or replaces the original work in the market, the Supreme Court may have weakened AI companies’ strongest argument in favor of fair use. While the work generated by the model could be infringing copyright, the actual AI system is not. It is unclear what impact the ruling will have on AI-generated works.

Likewise, the implications of the Court’s narrow decision for museums is the subject of speculation. Both in oral argument and in amici briefs, concerns were expressed as to the potential import of the Court’s decision on the right of museums to display original artworks in their collections or on loan to the museum that incorporate preexisting works. Ultimately, the Court’s narrow ruling for Goldsmith did not directly address these concerns. In fact, the Court stated that it “expresses no opinion as to the creation, display, or sale of the original Prince Series works,” (Goldsmith at 21). Instead the decision focused on 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.” (Goldsmith at 12).

Lutzker & Lutzker will continue to provide updates on the implications of the Goldsmith decision for these issues and other IP concerns.