Landmark Warhol Decision Reins in Transformative Fair Use
Yesterday, the Supreme Court, in a 7-2 opinion written by Justice Sonia Sotomayor, found that the purpose and character of the Andy Warhol Foundation’s (AWF) use of Lynn Goldsmith’s photograph did not favor a fair use defense under the first fair use factor. The landmark decision reaffirms a critical tenet of the fair use doctrine—that whether a use is transformative not only doesn’t control a fair use determination, but it also doesn’t control a factor one analysis. Sotomayor’s thoughtful examination of the boundaries of fair use—paired with a recognition of the importance of copyright owners’ right to prepare derivative works—rightfully reins in expansive notions of transformative use by lower courts and others who have misinterpreted the doctrine as first handed down by the Court in Campbell v. Acuff Rose Music almost 30 years ago. Indeed, despite a dissent that claims the decision is taking copyright law in a new direction, the opinion is a clarification of Campbell’s often misconstrued principles.
While some commentors claim the decision is narrow because it addresses a specific situation—use of images for licensing to magazines—the opinion’s (and concurrence’s) affirmation of the limited weight of transformativeness and significance of the derivate works right is anything but narrow. Of course, fair use cases are always limited to the facts in the case, and this case is no different in this regard. But unlike Google v. Oracle, which was clearly limited—the court repeatedly stressed that the nature of the declaring code at issue was unique, explaining that “this code is different from many other types of code” and “embodies a different kind of creativity”–the Warhol decision does not say that the work at issue is unique or that its transformative use analysis is only applicable to a distinct scenario. Those commentors claiming the Warhol decision to be narrow are misconstruing the fact that the court did not, as a matter of procedure, opine on other uses that were not at issue in the case as a statement by the Court that its analysis is inapplicable to other uses. However, nothing in the opinion states that the broad analysis of the first fair use factor itself is limited. For example, it’s not hard to see how the Court’s treatment of transformative use could impact artificial intelligence developers’ approach to their unauthorized copying and ingestion of copyrighted works for training purposes. AI developers who rely heavily on notions of transformative use to support such unauthorized copying and ingestion will now need to drastically reevaluate their approach.
Background
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. 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.
For a full background on the facts and procedure of the case, see this earlier blog. Long story short, 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 Supreme 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 and there were thirty-seven amicus briefs in the months by a wide range of stakeholders. On October 12, 2022, the Supreme Court heard oral arguments—summarized in this blog—and while the Justices seemed to struggle at times to grasp important issues and ultimately seemed skeptical of AWF’s position that a mere difference in meaning or message constitutes a transformative use.
New Expression, Meaning, or Message Isn’t Enough….and Neither is Transformative Use
The Court’s opinion begins with a direct rebuttal of AWF’s argument that if an allegedly infringing use includes new expression, meaning, or message, it has a different purpose or character and constitutes fair use under the first factor. Sotomayor explains that while new expression, meaning, or message is relevant, it is not dispositive and that a further purpose or different character is a “matter of degree” that must also consider elements like commercialism. This idea of purpose and character being a matter of degree is similar to points made in amicus briefs—including ours and leading law professors’—that explained that first-factor transformativeness must be considered on a “sliding scale,” as it was in Campbell v. Acuff Rose (more on that later). In short, if an allegedly infringing work is highly transformative in purpose—like the enumerated uses in Section 107 of the Copyright Act—the less transformative the character must be, and visa versa.
Sotomayor’s opinion makes clear that not only do the original photograph and Warhol’s copying “share substantially the same purpose” because they were images licensed to magazine stories to depict Prince, but also that Warhol’s use is unequivocally commercial in nature. This combination, along with the fact that AWF “offered no other persuasive justification” for its unauthorized use, weighed the first factor in favor of Goldsmith. Speaking to the point of “justification,” the opinion makes the distinction between copying that is “reasonably necessary”—as is the case for parodies like the 2Live Crew song in Campbell—and copying that is “merely helpful.” Sotomayor explains that when copying is merely helpful to convey a different meaning or message, it cannot be justified under the first fair use factor.
Perhaps the most important part of the opinion is its clarification that transformative use alone is not dispositive of a fair use finding. Moreover, the Court confirms that it’s only one consideration of many in a first factor analysis. Even Justice Kagan’s dissent acknowledges that transformation should “not dictate a finding of fair use.” This is a crucial point that will hopefully rein in courts that have elevated the transformative use doctrine to make it the most influential element of the fair use test. In fact, an empirical study by Dr. Jiarui Liu reported on transformative use decisions in U.S. copyright history through January 1, 2017 and found that “of all the dispositive decisions that upheld transformative use, 94% eventually led to a finding of fair use” and that “a finding of transformative use overrides findings of commercial purpose and bad faith under factor one, renders irrelevant the issue of whether the original work is unpublished or creative under factor two, stretches the extent of copying permitted under factor three towards 100% verbatim reproduction, and precludes the evidence on damage to the primary or derivative market under factor four even though there exists a well-functioning market for the use.” In other words, since Campbell, lower courts have manipulated and created a Frankenstein of transformative use that improperly swallows up the entirety of the statutory fair use analysis.
Warhol’s clarification of the proper weight afforded to transformative use is not just an indictment of some courts’ past wrongs, it should also be a warning to courts who will soon be faced with questions about whether the use of copyrighted works for AI purposes is transformative and whether it qualifies as fair use. As the opinion notes, the Supreme Court has never held “that any secondary use that is innovative, in some sense, or that a judge or Justice considers to be creative progress consistent with the constitutional objective of copyright, is thereby transformative.”
Fair Use is an Objective Standard
Another critical point Sotomayor’s opinion makes is that “fair use is an objective inquiry into what a user does with an original work, not an inquiry into the subjective intent of the user, or into the meaning or impression that an art critic or judge draws from a work.” Throughout the case, AWF and its experts argued that the Warhol works transformed Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure. But the Supreme Court agreed with the Second Circuit that different meaning or message—and ultimately transformative use—“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.”
This need for objectivity is a point our amicus brief also focused on, explaining that to rely on subjective assessments would allow users to simply make up a purpose, even if it had little to do with the actual original purpose of the secondary work. If the determination of a work’s purpose were based solely on the testimony of the user, a critic, or the opinion of a judge, the test for different character or purposes under the first factor would be rendered meaningless.
Campbell Doesn’t Stand for What AWF Thinks it Does
The Court’s heavy reliance on the Campbell v. Acuff Rose Music case marks a return to the fundamental principles that gave rise to the transformative use test in the first place and a return to the intended careful application of the concept in weighing the first fair use factor. Much of the opinion is dedicated to distinguishing the Warhol facts from the transformative use analysis in Campbell v. Acuff Rose. Sotomayor explains that in Campbell, while 2 Live Crew “without a doubt” transformed Roy Orbison’s song by adding new lyrics and musical elements, such that “Pretty Woman” had a different message and aesthetic, “that did not end the Court’s analysis of the first fair use factor.” The opinion describes how the Supreme Court then went on to determine that 2 Live Crew’s use rose to the level of a parody, with “a distinct purpose of commenting on the original or criticizing it.” Parody and other uses that comment on or criticize the original work are more “justified” in using a work because it furthers the goals of copyright in promoting the progress of the arts “without diminishing the incentive to create.”
In the case of Warhol, AWF never argued the use was a comment on or criticism of the original Goldsmith photograph, and the Court found that (1) Goldsmith’s work and AWF’s “share the same or highly similar purposes,” and (2) dissemination of AWF’s work would run the risk of substitution for Goldsmith’s. In the Court’s view, Campbell and Warhol are easily distinguishable, and despite AWF’s contention to the contrary, Campbell “cannot be read to mean that §107(1) weighs in favor of any use that adds new expression, meaning, or message.”
Transformative Use Cannot Swallow the Right to Prepare Derivative Works
One of the most impactful parts of the opinion reconciles the relationship between transformative use and the enumerated statutory right of a copyright owner to prepare derivative works. As the opinion notes, the word “transformative” is not found in relation to the fair use doctrine in section 107 of the Copyright Act. Rather, it appears in the definition of derivative works (that a copyright owner has the exclusive right to prepare) and includes “any other form in which a work may be recast, transformed, or adapted.”
The opinion explains that this right cannot be preserved if the degree of transformation required to make transformative use of an original doesn’t go beyond that required to qualify as a derivative. Sotomayor warns that overbroad concepts of transformative use would narrow the derivative right so much that traditional adaptions like musical arrangements, film and stage adaptions, sequels, and spinoffs would be swallowed up.
Justice Gorsuch’s concurring opinion also recognizes that the derivative work right is threatened by expansive notions of transformative use that “risk making a nonsense of the statutory scheme.” The Court’s reinforcement of copyright owners’ right to prepare derivative works is significant step in the right direction in the face of AWF and others who argue for a transformative use interpretation that would all but nullify the right—something the Court calls an “intractable problem.”
Dissent Falls into the Same Traps as AWF
Justice Kagan’s dissent (joined by Chief Justice Roberts) focuses on many of the same irrelevant issues that AWF and its supporters did. It begins with a lesson in Warhol’s fame and significance in the world of modern art—none of which should ever have a bearing on a fair use analysis. It goes on to fall into the trap of subjectivity, opining about the new expression, meaning, and message of Warhol’s “dazzling creativity.”
Ultimately, it warns that the majority’s opinion would “stifle creativity of every sort” and “make our world poorer.” Addressing that hyperbole, Sotomayor simply notes that “[t]hese claims will not age well.” In one of the most powerful passages of the opinion, she writes:
“It will not impoverish our world to require AWF to pay Goldsmith a fraction of the proceeds from its reuse of her copyrighted work. Recall, payments like these are incentives for artists to create original works in the first place.”
Sotomayor’s call for accountability and compensation and her recognition of the incentives that power our copyright system could not be more on point. This is especially true at a time when some AI developers are ignoring available licenses, using massive amounts of copyrighted works without permission, and jeopardizing the incentives for artists to create the very works they claim their AI systems must ingest.
The dissent also speaks to the need for a copyright regime with “escape valves” like fair use that allow other to build on copyrighted material, which Kagan believes are threatened by the majority decision. Sotomayor addresses this head on, explaining that “copyright law is replete with escape valves: the idea–expression distinction; the general rule that facts may not receive protection; the requirement of originality; the legal standard for actionable copying; the limited duration of copyright; and, yes, the defense of fair use, including all its factors.”
Conclusion
The key takeaway from Court’s opinion is that transformative use does not control the first fair use factor. While most copyright experts understand this, it is a point that has unfortunately been lost on courts in recent years as many have elevated transformative use into a dispositive factor that magically results in a finding of fair use. Sotomayor’s opinion swings the pendulum back to its proper position, explaining the intended context and application of transformative use within factor one, and that the first fair use factor must balance a number of considerations—and even then, must be weighed against the other three factors.
While critics of the decision will inevitably argue that it distorts the law, the reality is that the Court has clarified and confirmed the often-misinterpreted guidance of Campbell. This reaffirmation of the proper weight that should be afforded to transformative use shouldn’t come as a surprise, as other courts have recently begun to recognize that expansive notions transformative use are a “high-water mark.” Warhol assures us that the high water is now receding and will hopefully settle at level that the Supreme Court intended. The decision recognizes this return to a more balanced approach, explaining that it “is consistent with longstanding principles of fair use.” Rather than alter the law in a way that “snuff[s] out the light of Western civilization,” as the dissent implies, the Warhol decision confirms that “existing copyright law, of which today’s opinion is a continuation, is a powerful engine of creativity.”
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