On October 12, 2022, the Supreme Court of the United States heard a copyright case that could reshape the future of the nation’s copyright regime.
Renowned photographer Lynn Goldsmith, who captured portraits of the rock star Prince that Andy Warhol later used to create the iconic Prince series, filed the suit. In 1984, Vanity Fair magazine commissioned Warhol to create an illustration of Prince using one of Goldsmith’s photos for reference. Vanity Fair obtained a license from Goldsmith, which allowed the magazine to use Warhol’s illustration in one Vanity Fair issue only. Warhol then created 16 Prince illustrations based on Goldsmith’s copyrighted photographs and copyrighted those illustrations. Vanity Fair used one of Warhol’s illustrations for publication, but the other images have since been sold and reproduced for hundreds of millions of dollars. After Prince died, Vanity Fair’s parent company, Conde Nast, ran a tribute edition in honor of the singer and paid the Warhol Foundation to run Warhol’s art on its cover. Goldsmith did not receive any payment or credit for the tribute and subsequently sued the foundation. Goldsmith argued that Warhol infringed her copyright and that the foundation owed her money in unpaid licensing fees and royalties. The foundation countered that its use of Goldsmith’s photographs in creating the Prince illustrations constituted fair use.
In deciding the issue of fair use, the outcome of this case will shape the amount of copyright protection given to initial creators. This decision, in turn, will shape the extent to which subsequent creators may rely upon that preexisting copyrighted work without incurring liability to the initial creator. Thus, the outcome of this case will determine the future of legally protected artistic expression.
What rights do copyright owners have?
The Copyright Act gives the owner of a copyright the following exclusive rights with respect to their copyrighted work: (1) the right to reproduce the work; (2) to prepare derivate works; (3) to distribute copies; (4) to perform publicly; (5) to display publicly and (6) to perform publicly by means of digital audio transmission for sound recordings. The Visual Artists Right Act of 1990 added additional rights, often called “moral rights,” for the creator of specific statutorily-defined works. Additionally, Congress passed the Digital Millennium Copyright Act in 1998 and the Music Modernization Act in 2018 to update copyright law, given technological changes. All these rights given to copyright owners, however, are subject to several statutory limitations. One of the most important limitations, and the one that is of focus in the current Supreme Court case, is the fair use of a copyrighted work.
What is fair use?
If fair use is found, then the use of a copyrighted work by another will not be an infringement of that copyright. As such, where fair use is found, a creator will not be liable to the initial creator for using the initial creator’s copyrighted work.
In determining whether fair use exists in a particular case, the 1976 Act lists the following set of non-exclusive factors to consider: “(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 Act also lists the following non-exclusive examples which support fair use purposes: criticism, comment, news reporting, teaching, scholarship, and research.
Courts, including the Supreme Court, also consider whether and to what extent the new work is “transformative.” The Supreme Court has described transformative by asking “whether the new work merely supersedes the objects of the original creation, or whether and to what extent it is ‘transformative,’ altering the original with new expression, meaning, or message.” The Court added, “The more transformative the new work, the less will be the significance of other factors.” Determining whether a user’s work is sufficiently transformative –– which weighs in favor of finding fair use–– is complicated by the copyright owner’s right to prepare derivative works. According to the Copyright Act, “A ‘derivative work‘ is a work based upon one or more preexisting works.” For example, a film adaptation of a copyrighted book is a derivative work of that book. Thus, a film adapter must obtain a license from the author of the underlying book, or the adapter would infringe upon that author’s right to prepare derivative works. Differentiating between a work that is transformative rather than derivative can not only be complicated but also consequential: the difference may determine whether a user is legally liable to the copyright owner for using their protected work.
Examples where the Supreme Court has found fair use include: Sony Corporation’s sale of home-recording equipment; 2 Live Crew’s commercial parody of Acuff-Rose’s “Oh, Pretty Woman;” and Google’s copying of Oracle’s application programming interface as well as roughly 11,500 lines of source code that Google used to developed Android. Examples where the Supreme Court has not found fair use include: a news article published by The Nation based on Gerald Ford’s unpublished manuscript; and the peer-to-peer file-sharing systems of Grokster and Streamcast.
What’s at stake here?
The decision of the current Supreme Court case can shape the future of what does and does not constitute fair use. Goldsmith claimed that Warhol’s images based upon her copyrighted photographs constituted a derivative work. Thus, Goldsmith argued that the Warhol Foundation infringed her exclusive right to prepare derivative works and is therefore liable to her. The Warhol Foundation, however, argued that Warhol’s images were sufficiently transformative and thus constituted fair use. As such, the Warhol Foundation argued that it did not infringe Goldsmith’s copyright and is therefore not liable for its use of Goldsmith’s work in the Prince illustrations.
By finding in favor of Goldsmith, who owns copyright in the Prince photographs, the applicability of fair use may be limited. In this scenario, future content creators may face increased liability when creating new content based on copyrighted work. Because creativity is often inspired by some underlying work, such a decision may stifle creativity. As the Acuff-Rose case highlights, for example, works like parodies of a copyrighted work would constitute infringement without fair use. On the other hand, by finding in favor of the Warhol Foundation, which used Goldsmith’s copyrighted work in its work, future copyright owners may be denied a remedy when a user has unfairly used their creative work. Because the copyright regime has historically protected a creator’s financial incentive, such a decision may stifle creativity. In either scenario, creativity may be stifled: over-protecting a work may prevent others from using that work in their creative process, while under-protecting a work may prevent creators from entering the market without an assurance of monetary gain. As the Gerald Ford case highlights, for example, some uses may unfairly exploit the initial creator’s work. As the Supreme Court noted in that case, quoting in part an earlier decision, “The challenge of copyright is to strike the ‘difficult balance between the interests of authors and inventors in the control and exploitation of their writings and discoveries on the one hand, and society’s competing interest in the free flow of ideas, information, and commerce on the other hand.'”
