The 2nd Circuit "Transforms" the Fair Use Analysis: Warhol's Use of Copyrighted Prince Photograph Is Not Fair Use
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| THE GOLDSMITH PHOTOGRAPH (FROM COURT DOCUMENT) |
Last October, I shared my opinion on why the district court was wrong to grant a summary judgment to the Andy Warhol Foundation for the Visual Arts (the "Foundation") in a case involving Andy Warhol's use of copyrighted Prince photograph ("Prince Photograph"). Lynn Goldsmith, the author of the Prince Photograph, appealed the decision and, a couple of weeks ago, the Second Circuit held that Andy Warhol's use does not qualify as fair use, reversing and vacating the judgment of the district court. See Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, No. 19-2420-CV, 2021 WL 1148826 (2d Cir. 2021). A deluge of commentaries has poured forth, commenting on the decision's future implications. Today, rather than divining the future of the fair use doctrine at least within the Second Circuit, I will provide a summary of this seminal Second Circuit opinion. (To learn about the background of the case, please read my previous post!)
1] Transformativeness
The Second Circuit started out its opinion by conceding that most instances of fair use involve "a secondary work that comments on the original in some fashion." Id. at 5. Having said so, it elucidated that there is no requirement that a secondary work "must" comment on the original to be eligible for fair use. Id. Emphasizing that every fair use analysis employs a "context-sensitive inquiry" that does not resort to "simple bright-line rules", the Second Circuit indicated that the district court mistakenly read the Second Circuit's decision in Cariou to mean that all secondary works are "necessarily" transformative. Id. While acknowledging that such reading of Cariou may be supported by making reference to certain parts of the Cariou decision, the Second Circuit unequivocally stated "such a reading stretches the [Cariou] decision too far." Id.
In an attempt to clarify, or correct, the misunderstanding and thus misapplication of Cariou, the Second Circuit militates against the approach that sees "any secondary work that adds a new aesthetic or new expression to its source materials" as being transformative. Id. The focus rather should be on the purpose of a secondary work. That is, the proper line of inquiry is whether the purpose of a secondary work can stand apart from that of the original. While yielding to the Foundation's characterization that Warhol's rendition of Prince may contain notable alterations that cumulatively cast the original in a different light, the Second Circuit concludes that the Goldsmith Photograph nonetheless "remains the recognizable foundation upon which the Prince Series is built" precisely because the Prince Series "retains the essential elements" of the Goldsmith Photograph. Id. at 9. Just because the Prince Series exhibits characteristic features that are readily identifiable as being quintessentially Warhol, that does not automatically render the work at issue transformative. If that were the case, a celebrity-type artist would wrongly benefit from this factor, which the Second Circuit labels as some sort of "celebrity-plagiarist privilege". Id.
2] The Nature of the Copyrighted Work
The Second Circuit only devoted three short photographs to its discussion of the second factor. After noting that the district court correctly defined the Goldsmith Photograph as an unpublished work (which renders fair use limited in scope), the Second Circuit stated that the district court was wrong to conclude that this factor favors neither party based on the finding that the Goldsmith Photograph was "available for a single use on limited terms" by way of licensing. Id. at 11.
3] The Amount and Substantiality of the Use
The Second Circuit stated that the pivotal question for this factor is whether "the quantity and value of the materials used are reasonable in relation to the purpose of the copying." Id. In other words, the taking is evaluated both quantitatively (quantity-wise) qualitatively (value-wise). Copyright law does not protect ideas. It protects their expressions. Here, the Foundation's argument that one should not be allowed to monopolize on Prince (idea) is misleading. Once photographed, the resulting image is the photographer's expression. What Warhol took was those expressions captured in the Goldsmith Photograph. Therefore, Warhol appropriated without authorization the very essence of the Goldsmith Photograph, which is not observable in other artists' portrayals of Warhol. Therefore, the Second Circuit concludes that the portion taken is not reasonable, especially in light of the fact that the Foundation failed to submit the evidence on why it has to be the Goldsmith Photograph.
4] The Effect of the Use on the Market for the Original
The factor was what I had the most issue, and I'm glad that the Second Circuit rightly shed light on what this factor should mean. The Second Circuit concurred with the district court's determination that the two artists' markets do not "meaningfully overlap". Id. at 13. Yet, in the sentence right after, it flatly rejects the implication that "the market for Warhol's works is the market for Warhols". Id. If that's the case, this factor would always favor an established artist who commands huge market power. Furthermore, the market harm does not have to be restricted to actual harm. It includes potential harm going forward. Therefore, the question, correctly fashioned, should be whether "unrestricted and widespread conduct of the sort engaged in by the Foundation would result in a substantially adverse impact on the potential market for the Goldsmith Photograph." Id. The Second Circuit found that the Foundation's conduct does have an adverse impact, thereby essentially allowing potential infringers to infringe and claim fair use as an affirmative defense. Goldsmith is effectively deprived of licensing fees to which she is entitled as a right holder.
Many commentators are speculating how courts within the Second Circuit will apply the transformativeness factor in subsequent fair use cases. Although I cannot predict with certainty how courts would read the Goldsmith decision in the future, one trends seems to emerge. As evidenced in the concurring opinions, many courts have so far placed a heavy emphasis on the transformativeness factor, assigning relatively little independent import to the other three. For example, the third factor was almost inextricably linked to the transformativeness factor ever since the Supreme Court's Campbell decision. That might finally change.
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