Andy Warhol, Commercialism, and The Doctrine of Fair Use

On May 18, 2023, the US Supreme Court issued a long-anticipated decision in Andy Warhol Foundation for Visual Arts, Inc. v. Goldsmith, which alters the Courts’ interpretation of the copyright fair use doctrine. Specifically, the Court, in a majority opinion written by Justice Sotomayor, affirmed an earlier Second Circuit decision and held that the “purpose and character” factor of the fair use test does not focus on whether the new work is “transformative.” “[I]nstead, the analysis focuses on whether an allegedly infringing use has a further purpose or different character, which is a matter of degree, and the degree of difference must be weighed against other considerations, like commercialism.”

In 1981, award-winning photographer Lynn Goldsmith took photographs of Prince for Newsweek magazine. She retained the photos and holds copyright rights to all of them. In 1984, Goldsmith licensed one of these photographs to Vanity Fair to serve as an “artist reference for an illustration” in the magazine. The license granted a one-time use of the photograph in the November 1984 issue, consisting of one full-page and one quarter-page. This was the only right granted. Vanity Fair commissioned Andy Warhol to make the illustration, and Goldsmith was paid $400 and received source credit. Warhol was paid an undisclosed amount.

Goldsmith did not know Warhol also created the Prince Series, comprised of 15 drawings based on her photograph. She became aware of the series when she saw an orange image of Prince on the cover of a special tribute edition magazine in 2016, after the performer’s death. The Andy Warhol Foundation (“AWF”), recipient of the Prince Series following Andy Warhol’s death, had granted Condé Nast a license to publish what is called “Orange Prince.” The magazine paid AWF $10,000. Goldsmith did not receive a fee or source credit.

Upon seeing the magazine cover, Goldsmith informed AWF that she thought her copyright had been infringed. In response, AWF sued her for a declaratory judgement for noninfringement and in the alternative, a ruling that its use of the photograph was fair. Goldsmith counterclaimed for infringement. The case then made its way to the Supreme Court.

When determining whether the use of a copyrighted work is protected by the common-law doctrine of fair use, four factors are considered:

1. The purpose and character of the use, including whether the use is commercial in nature or 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 sole issue before the Warhol court was the first factor, whether the purpose and character of Orange Prince is commercial in nature or has a nonprofit educational purpose, and the Court narrowly held that this factor weighed in favor of Goldsmith and against a finding of fair use. The Court made clear that there is a difference between truly “transformative” works, which can be fair use, and the right to create a “derivative” work, a right that rests only with the copyright holder. And when analyzing this spectrum of uses against the first fair use factor, the Court explains that “the degree of difference must be weighed against other considerations, like commercialism,” keeping in line with the precedent Campbell decision. According to the Court, “[i]f an original work and a secondary use share the same or highly similar purposes, and the secondary use is of a commercial nature, the first factor is likely to weigh against fair use, absent some other justification for copying.”

Here the Court found that the Goldsmith photograph and Orange Prince served substantially the same purpose. They were both portraits of Prince and used in magazines to illustrate stories about Prince. More importantly, they shared a commercial purpose: Goldsmith licensed her photograph to Vanity Fair for $400; AWF licensed Orange Prince to Condé Nast for $10,000. The Court concluded that “Goldsmith’s original photograph of Prince, and AWF’s copying use of that photograph in an image licensed to a special edition magazine devoted to Prince, share substantially the same purpose, and the use is of a commercial nature.” This weighs against a finding of fair use. The Court, not surprisingly, ensures its decision is narrow and even notes that others of AWF’s Prince Series could be viewed in a different light.

In dissent, Justice Kagan, joined by Chief Justice Roberts, accuses the majority of leaving the first fair use factor “in shambles.” The dissent laments the majority’s focus on the commercial use of Orange Prince over and above all else, including missing the opportunity to dive deeper into the transformative nature of the work, and thereby argues that the decision has the result of “undermin[ing] creative freedom” and upending doctrinal copyright law.

Overall, this decision has significant implications in the area of fair use. Though all copyright infringement issues are highly context-specific, likely gone are the days where an artist can take a copyrighted work, claim to have transformed it, and sell this new creation without significant worry about being held liable for infringement. If both the original work and the secondary work are similar and have a significant commercial purpose, the first fair use factor is more likely to fail, resulting in a finding of copyright infringement. This decision also may have important ramifications for digital recreations of physical art, the rampant proliferation of which we are seeing every day.