On October 12, the U.S. Supreme Court will hear oral arguments in Andy Warhol Foundation for the Visual Arts, Inc. v. Lynn Goldsmith, a case that could have a lasting impact on transformative use analyses and copyright owners’ derivative use right. Earlier this month, the Andy Warhol Foundation (AWF) filed its opening brief in the case, asking the Court to embrace a transformative use test that has no foundation in the Copyright Act or case law. The Copyright Alliance filed an amicus brief this past week explaining AWF’s misguided approach and the harm the overbroad standard it promotes would inflict on copyright owners and creativity. Focusing on the importance of interpreting the Copyright Act in a manner preserves a copyright owner’s right to prepare derivative works, our brief lays out a set of guidelines that must be taken into account in a transformative use analysis.
In late 2021, AWF petitioned the Supreme Court to address a question involving the transformative use standard it claims was distorted by the Second Circuit when it found in 2020 that AWF’s use of Goldsmith’s work did not qualify as fair use. In that decision, the Second Circuit reversed and remanded a district court’s fair use holding, finding that courts have misapplied the standard it set forth in Cariou v. Prince and by doing so have greatly diminished the copyright owner’s right to control the creation of derivative works.
At issue in the case is a series of 15 silkscreen prints and pencil illustrations that the late appropriation artist, Andy Warhol, based, without authorization, on a photographic portrait of Prince taken by photographer, Lynn Goldsmith, in 1981. Rejecting the district court’s transformative use analysis, the Second Circuit found that in order for a secondary use to be transformative enough under the first factor of the fair use test, the work must be “fundamentally different and new” and embody an “entirely different artistic purpose” so that it “stands apart from the raw material”—all of which the court found the Warhol prints failed to do. The opinion provided welcome guidance on how to analyze what constitutes transformative use (a court-created subtest of the first factor of the fair use test) as opposed to derivative use (falling under the derivate work right, a fundamental right granted by the Copyright Act), a crucial clarification that corrected case law and commentary that have increasingly blurred the line between transformative use and derivative works in recent years, all but eliminating a copyright owner’s exclusive right to prepare derivative works.
Then, in the wake of the Supreme Court’s Google v. Oracle decision, AWF filed a petition for rehearing of the Second Circuit’s decision, claiming that the Second Circuit court was now in direct conflict with the high Court. In August 2021, the Second Circuit issued an amended opinion “emphatically” rejecting petitioner’s claims and reenforcing the clearly limited applicability of Google v. Oracle. While that seemed to be the end of the road for AWF, it then filed a petition for certiorari with the Supreme Court, asking it to resolve the question of:
“[w]hether a work of art is ‘transformative’ when it conveys a different meaning or message from its source material, or whether a court is forbidden from considering the meaning of the accused work where it ‘recognizably deriv[es] from’ its source material.”
Despite AWF’s misrepresentation of what the Second Circuit actually said in its opinion, the Supreme Court accepted AWF’s petition in March, jump-starting amicus efforts from a wide range of stakeholders.
While some have framed the case as the Supreme Court’s next big fair use showdown, the question presented only involves the transformative use standard—which is merely one part of the first of four fair use factors courts must consider. As our brief explains, the question presented can and should be resolved without a conclusive determination of whether AWF’s use qualifies as a fair use, and it’s for that reason that the Copyright Alliance filed in support of neither party. Additionally, by focusing on the narrow question presented, the brief cautions against the increasingly elevated weight courts have afforded to transformative use analyses and emphasizes the continued importance of the other three factors of the fair use test.
AWF’s Overbroad Test Would Nullify the Derivative Work Right
The backdrop to this case is a growing tension between a copyright owner’s exclusive right to control the creation of derivative works found in Section 106 of the Copyright Act and the exception to that right which permits a third party to use preexisting copyrighted works to make new works that qualify as fair use pursuant to Section 107 of the Copyright Act. Whether a work is “transformative”—a term that does not appear in Section 107—has come to dominate fair use analyses to a point where it unduly encroaches on and engulfs the copyright owner’s exclusive right to control the creation of derivative works. As our brief explains, elevating the importance of the transformative use inquiry improperly favors a judicial interpretation of a statute over that statute’s own express language and is contrary to the language and purpose of the Copyright Act.
Moreover, AWF promotes a standard that asks only whether a secondary work conveys a “difference in meaning or message.” But whether a work conveys a different meaning or message is only part of the equation, and AWF ignores the fact that the Supreme Court in Campbell v. Acuff Rose articulated a more holistic test that requires a subsequent use of a preexisting work to have a “further purpose or different character” from the original. Campbell also made clear that the transformative use inquiry is a means of interpreting Section 107 to determine whether the secondary work’s purpose and character differs sufficiently from the original’s so as not to “‘supersede the objects’ of the original creation” and thus impinge on the copyright owner’s exclusive rights.
If AWF’s standard is accepted, practically any secondary use would qualify as transformative and a copyright owner’s statutory right to create and control derivative works would be rendered meaningless. But by limiting the scope of uses that are considered “transformative” so as not to limit the derivative work right, the Court can strike that correct balance between both Sections 106 and 107 of the Copyright Act.
Google v. Oracle’s Fair Use Analysis is Not Applicable
AWF argues that the Supreme Court’s decision in Google v. Oracle supports its misguided standard and “establish[es] a straightforward rule” on transformative use. However, that opinion is unequivocally clear that its fair use analysis was limited to the specific type of software code at issue and that its decision does not “change the nature of” traditional copyright concepts nor “overturn or modify … earlier cases involving fair use.”
In Google, the Court explained that it was addressing the distinct realities surrounding the creation and dissemination of technological works, noting that a broad view of “purpose” would “limit the scope of fair use in the functional context of computer programs.” (emphasis added). While the Court’s context-specific consideration was fitting in the special case of software and represents the flexibility the fair use analysis affords, it cannot be applied generally to other transformative use analyses.
AWF’s Standard Would Upend Creative Industries
As our brief explains, the creative industries rely on a balance between licensing the derivative works right and making fair use of preexisting works. It’s a balance that’s fostered the creative output of large industries down to individual creators, and it’s one that incentivizes the dissemination of a diverse array of creative expression for the public to enjoy. Given that a determination of transformative use almost always leads to a finding in favor of fair use, AWF’s proposed standard would disrupt robust derivative rights licensing markets that drive our vibrant creative ecosystem.
Take for example, storytelling industries like film, theater, books, and video games. These industries pay authors for the right to make adaptations of their works, allowing the owners of the preexisting works to reap the benefits of the creativity in those works and incentivizing authors to create new works that might also be licensed for different adaptations. Film and television adaptations in particular—which often involve the licensing of existing works such as books and screenplays—are paradigmatic examples of derivative works that might suddenly qualify as transformative under AWF’s test by merely adding new meaning, message, or expression.
In the music industry, there is a healthy market for the use of preexisting sound recordings in ways that do not comment on or criticize them, as source material for new sound recordings through processes known as sampling, subsampling, remixing, stemming, or mashing up. Sampling or remixing often alters the prior song in at least a minimal way, often by adding new expression. Under AWF’s test, sampling would almost always qualify as transformative, and as a consequence, copyright owners would see their sound recordings sampled and reused without any control over or payment for those uses.
AWF’s test would also disrupt markets for the licensing of photographs and other visual art works. All a secondary user would have to do is slightly alter a photograph and claim new expression and new meaning—for instance, by using a simple tool like Adobe Photoshop or a readily available Instagram filter to darken the image to communicate a meaning of dread. The original photographer would be unable to prevent such use or be compensated for their creativity, effectively gutting the photography and visual art licensing market.
Finally, AWF’s test would also have a devastating impact on how copyrighted works are used with new technologies. As companies continue to develop “metaverses,” users will likely soon be able to view recorded performances of their favorite musicians, model their avatars after their favorite film or TV characters, or see their favorite artworks transformed into three dimensions. Under AWF’s test, it’s possible that any movement from the preexisting work into these new technologies could be transformative. It is critical that creators retain their rights when there’s merely movement of a creative work from traditional mediums into the virtual space.
The Supreme Court Should Articulate a Transformative Use Standard Grounded in the Language and Purpose of the Copyright Act
Ultimately, our brief urges the Court to articulate a standard for a transformative use inquiry that incorporates the following principles, all of which are grounded in the language and purpose of the Copyright Act.
- Where the derivative use right and transformative use tests overlap, the derivative work right must retain primacy.
If the test for determining the scope of the derivative work right and the test for determining the scope of transformative use conflict, the derivative work right should prevail. When a user “transforms” a preexisting work, the ensuing product is a derivative work subject to the exclusive control of the copyright owner. That express statutory right should have primacy over what qualifies as transformative use for the fair use defense.
- Courts must consider both the purpose and the character of the secondary use.
The language of the first factor in Section 107—which requires consideration of “purpose and character” of the use at issue—must frame any consideration of whether a use is transformative. This two-pronged test starts with consideration of the classically permissible purposes are embodied in the preamble to Section 107, which lists criticism, comment, news reporting, teaching, scholarship, or research. These purposes should guide the analysis of whether a secondary work has a purpose sufficient to justify the taking. As to the second prong, the character of the work must be sufficiently altered so it does not supersede the original and must constitute more than a simple change in medium.
Courts should consider on a sliding scale both whether the use was for a transformative purpose—in other words, whether the preexisting work was used for a reason closely tied to one of the examples in the preamble of Section 107—and whether the character of the use was such that the preexisting work was sufficiently altered so that the secondary work does not supersede the original. This sliding scale would reflect that the more compelling the purpose of the use, the less altered the character need be, and vice versa. Therefore, where a secondary work is for a purpose that highly justifies its use by being aligned closely with the examples in the preamble to Section 107, it may be transformative even without alteration. Alternatively, a work’s character may be so significantly altered that, despite having a less-justifying purpose, it is still transformative.
- The analysis of a transformative purpose and character cannot rely on subjective assessments.
A transformative use analysis must be done objectively, without consideration of the subjective assessments of the artist, experts, or the judge. Additionally, the transformative use analysis cannot consider the status or identity of the artist, or the commercial success of a work.
- The transformative use analysis cannot replace the fourth factor.
Nothing in a transformative use analysis should be seen as a substitute for a robust analysis of the fourth fair use factor, which considers the effect on the market for the copyrighted work. As the Court in Campbell made clear by remanding for further consideration of the fourth factor rather than relying on a finding of transformative use to find the parody song fair use, the first and fourth factors, though related, are independently necessary for the fair use analysis.
In the coming months, more briefs will be filed and more stakeholders will attempt to sway the Court towards their interpretation of transformative use. As the Court considers the question presented, it’s critical that it recognizes that the parameters of transformative use must be defined in a manner that preserves a copyright holder’s exclusive right to prepare derivative works. This case also presents the Court with an opportunity to reduce courts’ overreliance on a transformative standard that has come to dominate fair use analyses by confirming the continued importance of the other three factors of the fair use test. For the sake of all copyright owners and creators, we hope it does just that.
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