Fair Use: Prince of the Universe Dethroned in Favor of the Goldsmith

April 1, 2021

Decades ago, Andy Warhol created 15 silkscreen prints and pencil illustrations based on Lynn Goldsmith’s 1981 photograph of the artist Prince. Goldsmith’s agent had licensed Vanity Fair to use the image to publish an illustration based on the photograph, and the magazine chose Andy Warhol to create the illustration for the November 1984 issue. Pursuant to the licensing agreement, Vanity Fair provided attribution to Goldsmith. But what neither Goldsmith nor her agent knew at the time was that Warhol had created 15 works (the Prince Series). In 2016, Goldsmith discovered the Prince Series, and she contacted the Warhol Foundation, alleging copyright infringement. The foundation’s responded by requesting a declaratory judgment of non-infringement based on transformative fair use, and Goldsmith counterclaimed for copyright infringement. Judge John G. Koeltl of the U.S. District Court for the Southern District of New York granted summary judgment to the foundation and dismissed, with prejudice, Goldsmith’s counterclaim. Andy Warhol Found. for Visual Arts, Inc. v. Goldsmith, 382 F. Supp. 3d 312 (S.D.N.Y. 2019). Goldsmith promptly appealed.

On March 26, 2021, the U.S. Court of Appeals for the Second Circuit reversed the district court judgment in a decision that provides a road map to evaluate what is — or isn’t — transformative fair use. Andy Warhol Found. for Visual Arts, Inc. v. Goldsmith, No. 19-2420-cv, 2021 WL 1148826 (2d. Cir. March 26, 2021). In some ways, the appellate court rolled back its view of fair use expressed just eight years earlier in Cariou v. Prince, 714 F.3d 694, 705 (2d Cir. 2013). Here, the court said: “While we remain bound by Cariou, and have no occasion or desire to question its correctness on its own facts, our review of the decision below persuades us that some clarification is in order.”

The District Court’s Answers the Four Questions
The lower court, in reviewing the four fair-use factors (17 U.S.C. §107) and concluding that the Prince Series was transformative, said:

1) The first factor relates to the purpose and character of the use (commercial or non-profit educational purposes). Goldsmith’s “photoshoot illustrated that Prince ‘is not a comfortable person and that he is a ‘vulnerable human being’, and the photograph “reflects these qualities” while “Warhol’s Prince Series, in contrast, can reasonably be perceived to reflect the opposite.… The Prince Series works can reasonably be perceived to have transformed Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure.” 382 F. Supp. 3d at 326.

2) The second factor relates to the nature of the copyrighted work. 17 U.S.C. §107(2). Fair use of expressive or creative works is more difficult to establish, and the defense is narrower when applied to unpublished works in comparison to published works, which are factors that normally weigh in a copyright owner’s favor. Here, the photograph was licensed, and the factor “is of limited importance because the Prince Series works are transformative.”

3) The third factor relates to “the amount and substantiality of the portion used in relation to the copyrighted work as a whole.” 17 U.S.C. §107(3). Here, Judge Koeltl, relying on Cariou v. Prince, found that Goldsmith’s “creative elements are almost entirely absent from the Prince Series works.”

4) The fourth factor asks about “the effect of the use upon the potential market for or value of the copyrighted work.” 17 U.S.C. §107(4). The court found that the images in the Prince Series are not market substitutes for Goldsmith’s photograph that had harmed — or “ha[d] the potential to harm — Goldsmith.” Goldsmith had argued that she had reserved her rights to license the works “for the future when she expects the value of th[ose] photograph[s] to increase.”

Rolling Back Cariou
Why did the Second Circuit reverse the lower court and roll back Cariou? First, the appellate court found that Cariou was “stretched too far” by the apparent rule “that any secondary work is necessarily transformative as a matter of law ‘[i]f looking at the works side-by-side, the secondary work has a different character, a new expression, and employs new aesthetics with [distinct] creative and communicative results.” 382 F. Supp. 3d at 325-26. The appellate court then referred to the five works in Cariou that arguably had a new aesthetic but were not transformative — blue “lozenges” over the subject’s eyes and mouth and hands playing a blue guitar pasted over the subject’s hands were not enough. Additionally, the fact that the district court’s interpretation could apply fair use to derivative works, such as film adaptations of novels, concerned the Second Circuit, especially because works of the visual arts “share the same overarching purpose.” In reviewing prior decisions in which artwork was deemed transformative, the appellate court further noted that these works drew from numerous sources, not just one source that “simply alter[ed] or recast a single work with a new aesthetic.” Warhol, WL 1148826 at 7.

Judges Shouldn’t Be Art Critics
The Second Circuit was quite blunt in its review of the district court’s answers to the four questions above. “That was error,” and “the district judge should not assume the role of art critic and seek to ascertain the intent behind or meaning of the works at issue,” were its response to the lower court’s finding that “[t]he Prince Series works can reasonably be perceived to have transformed Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure.” 382 F. Supp. 3d at 326. Simply put, “whether a work is transformative cannot turn merely on the state or perceived intent of the artist of the meaning or impression that a critic – or for that matter, a judge – draws from the work. Were it otherwise, the law may well ‘recogniz[e] any alteration as transformative.’” Warhol, WL 1148826 at 8.

So What Four Questions Should Be Asked? And How Were They Answered?
The first, and primary, question and takeaway from the Warhol v. Goldsmith decision is the appellate court’s instruction to the lower court “to examine whether the secondary work’s use of its source material is in service of a ‘fundamentally different and new’ artistic purpose and character, such that the secondary work stands apart from the ‘raw material’ used to create it. Although we do not hold that the primary work must be ‘barely recognizable’ within the secondary work, as was the case with the works held transformative in Cariou, the secondary work’s transformative purpose and character must, at a bare minimum, comprise something ore than the imposition of another artist’s style on the primary work such that the secondary work remains both recognizably deriving from, and retaining the essential elements of, its source material.” Warhol, WL 1148826 at 8.

Second, whether the allegedly infringing work is or is not transformative has no bearing on the evaluation of the original work as creative and unpublished. “That was error” was repeated again by the Second Circuit.

The third question is whether the allegedly infringing works retain the original work’s essential elements without significantly adding to or altering them. The district court said yes, but the appellate court said — in no uncertain terms — no. Moreover, the Second Circuit found it irrelevant that the Prince Series works were “immediately recognizable as a Warhol.” Fair use should not rely on a “celebrity-plagiarist privilege.” Warhol, WL 1148826 at 9.

The fourth question asks whether the allegedly infringing work will adversely affect the potential market for the original. The appellate court first clarified that the alleged infringer bears the burden of proof of non-competition and then agreed with Goldsmith that “both [works] are illustrations of the same famous musician with the same overlapping customer base.” Additionally, the harm to Goldsmith’s derivative market was substantial. “That was more than enough,” the Second Circuit said. Warhol, WL 1148826 at 14.

The Works Are Substantially Similar as a Matter of Law
The Second Circuit held that “there is no reasonable debate that the works are substantially similar” “given the degree to which Goldsmith’s work remains recognizable within Warhol’s.” Warhol, WL 1148826 at 16. With clear answers to the four fair-use questions, artists now have a better understanding of what truly constitutes transformative work.

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