Supreme Court Limits the Fair-Use Defense in Copyright Litigation

A Prince-ly ruling for copyright holders

On May 18, 2023, the U.S. Supreme Court issued an important copyright ruling that clarified the scope of the fair-use defense. The ruling favors copyright owners, making it easier for them to succeed against subsequent users who incorporate a copyrighted photograph or other work into a later piece of art.

The litigation, styled Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, covered artwork made by the legendary pop artist Andy Warhol in 1984, when the movie and album Purple Rain made the musician known as Prince a household name. Warhol was commissioned by Vanity Fair magazine to create an illustration of Prince for an article titled “Purple Fame.” Warhol used a photo taken in 1981 by a photographer named Lynn Goldsmith to create the illustration. He obtained a one-time only license from Goldsmith and created a number of pieces for Vanity Fair’s consideration. Vanity Fair selected and published a purple silkscreen, paid Goldsmith $400 and the transaction seemed to be at an end. Warhol died in 1987.

However, when Prince died in 2016, Vanity Fair’s parent company, Conde Nast, went back to Warhol’s file and found a never-published piece that basically altered the background color of Goldsmith’s 1981 photo to orange but changed almost nothing else. Desiring to publish it, Conde Nast entered into a license agreement with the Andy Warhol Foundation, paid the Foundation approximately $10,000 and ran the orange-backgrounded work on a magazine cover commemorating Prince’s life and music. Now 35 years after photographing Prince, Goldsmith was unaware of the recent activity until she saw the magazine for sale.

Goldsmith contacted the Foundation and claimed the publication infringed on her copyright. She asked for compensation, and in response the Foundation filed a lawsuit for a declaratory judgment that the artwork either did not infringe on the photograph, or it was otherwise protected as fair use of the photo. According to the Foundation, Warhol’s use was a transformative or fair use, not an infringement, because it was a “comment on celebrity. In particular [the Foundation argued] Warhol’s Prince Series conveys the dehumanizing nature of celebrity.”

The Foundation had initial success, as a federal district court in New York City awarded it summary judgment based on the concept of fair use. But Goldsmith persisted. In 2021, the U.S Second Circuit Court of Appeals vacated the ruling and on May 18, 2023, by a vote of 7-2, the U.S. Supreme Court affirmed the appellate ruling in Goldsmith’s favor.

Justice Sonia Sotomayor wrote the opinion that found copyright infringement had occurred: “Both are portraits of Prince used in magazines to illustrate stories about Prince... . Taken together, these two elements — that Goldsmith’s photograph and [Warhol’s work] share substantially the same purpose, and that the use of Goldsmith’s photo was of a commercial nature — counsel against fair use.”

According to Sotomayor, the purpose of both the Goldsmith photo and the Warhol art was to illustrate a magazine about Prince with a portrait of Prince. Even though Warhol portrayed Prince somewhat differently than Goldsmith’s photograph, that degree of difference was not enough to convince the majority of the Supreme Court that Warhol’s use was transformative or “fair.”

If the fair-use defense had prevailed under these facts, Sotomayor said it would have opened the door for large-scale artistic copying of photos. “To hold otherwise would potentially authorize a range of commercial copying of photographs, to be used for purposes that are substantially the same as those of the originals. As long as the user somehow portrays the subject of the photograph differently, he could make modest alterations to the original, sell it to an outlet to accompany a story about the subject, and claim transformative use,” Sotomayor wrote. That scenario was unacceptable to seven justices, and this decision rejected that possibility.

TAKEAWAY: The Supreme Court’s decision narrowed the scope of what constitutes a fair use. Artists or web designers who base or incorporate the works of others into their art are advised to obtain a license from the copyright holder if there is any doubt whatsoever.

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