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Copyright’s fair use defense - Court clarifies “transformative use” analysis

October / November 2021 IP Newsletter

In a colorful copyright case involving iconic artists Prince and Andy Warhol, the U.S. Court of Appeals for the Second Circuit explained something that might seem obvious: Judges shouldn’t attempt to play the role of art critics. That didn’t bode well for the accused infringer, who had prevailed in the lower court.

The case develops

The case focuses on a 1981 photograph of Prince. The photographer, through her agent, licensed the photo to a magazine to use as an artist reference — the basis for an illustration that an unnamed artist would create and the magazine would publish. The artist was Warhol, known for his silkscreen portraits of celebrities.

Unbeknownst to the photographer, Warhol went beyond the magazine assignment and created additional works, which became known as the “Prince Series.” The works in the series were sold to third parties or sent to the Warhol Museum in Pittsburgh.

The photographer didn’t discover the series until after Prince’s death in 2016. She then notified The Andy Warhol Foundation for the Visual Arts (AWF), the current copyright holder in the “Prince Series,” of the perceived copyright violation. AWF regularly licensed the works for commercial use.

In 2017, the foundation sued the photographer, seeking a declaratory judgment that the “Prince Series” works constituted a fair use of her photograph. The trial court granted summary judgment to AWF and dismissed the photographer’s counterclaim for infringement. She appealed.

The court goes negative

Under the federal Copyright Act, courts evaluating an assertion of fair use generally consider four nonexclusive factors:

  1. The purpose and character of the use of the copyrighted work, including whether it’s of a commercial nature or for nonprofit educational purposes,
  2. The nature of the copyrighted work,
  3. The amount and substantiality of the portion used compared with the copyrighted work as a whole, and
  4. The effect of the use on the potential market for or value of the copyrighted work.

The first factor assesses the extent to which the secondary work is “transformative” — whether it adds something new, with a further purpose or different character, changing the original with new expression, meaning or message. Examples of transformative uses include criticism, comment, news reporting, teaching, research and parody.

The trial court concluded that the “Prince Series” works were transformative because they could “reasonably be perceived to have transformed Prince from a vulnerable, uncomfortable person [as portrayed in the original] to an iconic, larger-than-life figure.” The appellate court disagreed.

It explained that a judge shouldn’t assume the role of art critic to try to ascertain the intent behind or meaning of the works at issue. Rather, the judge must determine whether the use of the original work is for a fundamentally different and new artistic purpose and character. At a bare minimum, the court said, the secondary work’s purpose and character must comprise something more than the imposition of another artist’s style on the primary work.

The Second Circuit found that the overarching purpose and function of the works here were identical — they’re portraits of the same person. Moreover, Warhol created his series chiefly by removing certain elements (such as depth and contrast) from the original photo and embellishing the flattened images with “loud, unnatural colors.” But the series retains the essential elements of the photo without significantly adding to or altering them.

Warhol’s modifications primarily magnified some elements of the photo and minimized others. Although this may give a different impression of Prince, the photo was still the recognizable foundation for the series.

Photo finish

The Second Circuit found that the three remaining factors also favored the photographer, defeating AWF’s fair use defense, and that the works at issue were substantially similar. Given that Warhol based many works on photos of celebrities, AWF could face similar lawsuits in the future.

SIDEBAR: A better way to analyze fair use?

Two judges of the U.S. Court of Appeals for the Second Circuit concurred with the court’s decision in Warhol. (See main article.) But they also proposed a different approach to the fair use analysis.

The judges highlighted what they regard as an overreliance on “transformative use” and suggested a renewed focus on the fourth fair use factor: the effect of the use on the potential market for or value of the copyrighted work.

They noted a recent study examining 238 district and appellate court rulings on the fair use question. It found that whether the work in question was deemed transformative correlated with the ultimate fair use determination 94% of the time.

The judges acknowledged that the majority opinion in Warhol properly recognized the harm to the potential licensing markets for the original work and its derivatives. But they stressed that a focus on the fourth factor would better serve the purpose of copyright — stimulating creativity among potential authors by allowing them to earn money from their creations.