The Warhol Decision: How SCOTUS Forgot The First Amendment & Turned Copyright Into A Liability Time Bomb

from the an-unfair-decision dept

In his concurrence, Justice Gorsuch called the Supreme Court’s decision last week in the Andy Warhol Foundation v. Goldsmith case a narrow one of statutory interpretation, ostensibly doing nothing more than interpreting the breadth of the first fair use factor (“the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes”) the copyright statute lists for determining whether the use of an existing copyrighted work is fair.

But the majority’s decision, written by Justice Sotomayor, was hardly narrow; it was a decision that fundamentally rewrote the operational axis of our current copyright law. As a result, it does enormous damage to expressive freedom while also creating unprecedented and uncontrollable liability risk, even for many who may think they hold currently-valid copyrights. And it threatens to have these seismic effects with essentially no acknowledgement by the Court of this inevitable impact.

It produced this judicial grenade by misreading the statute, mangling prior precedent, and ignoring the logical implications of its analysis. But much boils down to two major errors made by the Court (as well as several other mistakes), which ultimately interrelate: ignoring the role of the First Amendment in tempering the power of copyright, and misunderstanding what “use” is at issue when analyzing fair use.

Case Background

The dispute brought before the Court arose because, back in the early 1980s, photographer Lynn Goldsmith was hired by Newsweek to take pictures of Prince.  The magazine ran one of the pictures, but she still retained the copyright in the rest of the pictures she took, including in her studio. One of the latter shots was the product of a reportedly an awkward portrait sitting and led to a photograph of Prince showing him to be a “vulnerable, uncomfortable person.” Nevertheless, years later Vanity Fair licensed it from her to be “an artist reference” for another picture that would run in its magazine. The license she agreed to allowed Vanity Fair to run the resulting image once.

Vanity Fair then hired Andy Warhol to create the adapted image, which he did by creating a silkscreen portrait, altering elements of it in the process.

Warhol cropped the photo, so that Prince’s head fills the whole frame: It thus becomes “disembodied,” as if “magically suspended in space.” Id., at 174. And as before, Warhol converted the cropped photo into a higher-contrast image, incorporated into a silkscreen. That image isolated and exaggerated the darkest details of Prince’s head; it also reduced his “natural, angled position,” presenting him in a more face-forward way. Id., at 223. Warhol traced, painted, and inked, as earlier described. See supra, at 5–6. He also made a second silkscreen, based on his tracings; the ink he passed through that screen left differently colored, out-of-kilter lines around Prince’s face and hair. [Dissent at 7-8]

The final product was a picture that portrayed Prince as an “iconic, larger-than-life figure.” In addition to the purple version that ran in Vanity Fair, he also made 15 others (13 silkscreens, and two pencil sketches), which became well-known and sought-after by other licensees (although to which Goldsmith apparently was unaware). It was the orange version that, nearly twenty years after Warhol’s death, Conde Nast thought best illustrated their article about Prince, following the latter’s death.

And so, in an act that apparently deeply offended the majority, Conde Nast approached the Andy Warhol Foundation (referred to as AWF), which had acquired the copyrights Warhol had in his works after his death, to license his portrayal of Prince, instead of approaching Goldsmith to license hers. After she saw the orange picture on the cover of Conde Nast’s magazine she accused AWF of infringing her copyright.  AWF sued for declaratory judgment to get the question settled, arguing that, rather than infringing, the Warhol pictures were a fair use of Goldsmith’s original. The district court found in favor of AWF, but the Second Circuit reversed after reapplying the four-factor test incorporated into the statute. The Supreme Court then took up the case to determine which court got the test right. In its decision it decided that it was the Second Circuit, and in doing so the Supreme Court got things very wrong.

Major error #1: ignoring the First Amendment’s protection of free expression

It is bizarre, in a case about fair use, to not see mentioned, even once, the words “First Amendment” anywhere in any of the 80+ pages of the majority decision, concurrence, or even Justice Kagan’s justifiably outraged dissent. After all, as the Supreme Court has itself observed in other cases, fair use is one of the “accommodations” built into the copyright law to ensure that it does not violate the First Amendment by becoming a law that impinges on free expression. Furthermore, as the dissent reminded, it also helps vindicate the goals and purpose of copyright law to get new creative works by making it possible to produce more creative works.

The law does not grant artists (and authors and composers and so on) exclusive rights—that is, monopolies—for their own sake. It does so to foster creativity—“[t]o promote the [p]rogress” of both arts and science. U. S. Const., Art. I, §8, cl. 8. And for that same reason, the law also protects the fair use of copyrighted material. Both Congress and the courts have long recognized that an overly stringent copyright regime actually “stifle[s]” creativity by preventing artists from building on the work of others. Stewart v. Abend, 495 U. S. 207, 236 (1990) (internal quotation marks omitted); see Campbell, 510 U. S., at 578–579. For, let’s be honest, artists don’t create all on their own; they cannot do what they do without borrowing from or otherwise making use of the work of others. That is the way artistry of all kinds—visual, musical, literary—happens (as it is the way knowledge and invention generally develop). The fair-use test’s first factor responds to that truth: As understood in our precedent, it provides “breathing space” for artists to use existing materials to make fundamentally new works, for the public’s enjoyment and benefit. Id., at 579. In now remaking that factor, and thus constricting fair use’s boundaries, the majority hampers creative progress and undermines creative freedom. [Dissent at 3-4].

Without fair use, copyright can easily become a tool of censorship, where a copyright holder can effectively say no to subsequent expression. And yet such a reality is what this Court now invites, with an obstinate obliviousness, refusing to see (or, as Kagan complains, care) that the Warhol picture did express something new that the original Goldsmith picture did not.

For it is not just that the majority does not realize how much Warhol added; it is that the majority does not care. In adopting that posture of indifference, the majority does something novel (though in law, unlike in art, it is rarely a good thing to be transformative). Before today, we assessed “the purpose and character” of a copier’s use by asking the following question: Does the work “add[] something new, with a further purpose or different character, altering the [original] with new expression, meaning, or message”? Campbell v. Acuff-Rose Music, Inc., 510 U. S. 569, 579 (1994); see Google, 593 U. S., at ___ (slip op., at 24). When it did so to a significant degree, we called the work “transformative” and held that the fair-use test’s first factor favored the copier (though other factors could outweigh that one). But today’s decision—all the majority’s protestations notwithstanding—leaves our first-factor inquiry in shambles. The majority holds that because Warhol licensed his work to a magazine—as Goldsmith sometimes also did—the first factor goes against him. See, e.g., ante, at 35. It does not matter how different the Warhol is from the original photo—how much “new expression, meaning, or message” he added. It does not matter that the silkscreen and the photo do not have the same aesthetic characteristics and do not convey the same meaning. It does not matter that be cause of those dissimilarities, the magazine publisher did not view the one as a substitute for the other. All that matters is that Warhol and the publisher entered into a licensing transaction, similar to one Goldsmith might have done. Because the artist had such a commercial purpose, all the creativity in the world could not save him. [Dissent at 2-3].

As Kagan noted, the majority instead fixated not on the expressive qualities of these works, which fair use is about enabling, but on an artificial definition of a particular market opportunity both the original and later work could conceivably profit from – in this case as pictures a magazine could conceivably license to illustrate an article about Prince.

Here, the specific use of Goldsmith’s photograph alleged to infringe her copyright is AWF’s licensing of Orange Prince to Condé Nast. As portraits of Prince used to depict Prince in magazine stories about Prince, the original photograph and AWF’s copying use of it share substantially the same purpose. Moreover, the copying use is of a commercial nature. Even though Orange Prince adds new expression to Goldsmith’s photograph, as the District Court found, this Court agrees with the Court of Appeals that, in the context of the challenged use, the first fair use factor still favors Goldsmith. [Majority at 12-13]

In discounting the expressive differences between the two pictures, commerciality has now overtaken expressiveness as the pivot point upon which “fair use” is based, with catastrophic consequences for subsequent expression.

For one thing, it effectively means that expression can only freely be made for free. If expression builds upon a work that came earlier (and, as Kagan reminded in an above excerpt, most new works are likely to in some form), as soon as that new expression is monetized, per this decision the expressive quality of the new work immediately becomes subordinated to that profit motive in assessing whether it constitutes a fair use. Thus expression made for free will be more protected from infringement liability as a fair use than expression made for money, or, to put it another way, monetized expression will be less protected than non-monetized expression. While in certain circumstances commercial speech has been afforded less protection than non-commercial speech, those circumstances are not present here, nor does the majority argue that they are. The Court does not propose that licensed expression is somehow akin, for instance, to an advertisement, which might get less protection than expression without a commercial quality to its message. The problem with this decision, as the dissent complains, is that the Court pays no attention to the actual message in the expression at all. It doesn’t care what it has to say, and its decision sets up a situation where the exact same message gets more or less protection depending on whether it is monetized. It is more akin to a newspaper getting First Amendment protection if it is given away for free, and less if it is sold, but we know from more than 200 years of history that distinction is not something the First Amendment allows. Indeed, how could it, because people often need to be able to profit from their expression in order to continue to be able to produce it. In fact, the importance of monetization is what animates copyright law in the first place, to make sure that people can profit from their expression! And yet, according to the majority, per that same copyright law, if they want to, the law now makes that expression legally vulnerable.

It also means that, while expression made for money may be less constitutionally protected, expression that is not may end up less statutorily protected by the copyright law. The way the majority elevates the fair use inquiry on market impact means that an original work that is not monetized would have less ability to stop a derivative work than one that is. The majority decision sets up the situation where, for example, two photographers could have their works adapted by an artist like Warhol, but the one that commercially licensed theirs would be more able to shut down the later work than the one who didn’t, simply by virtue of potentially incurring a hit to the marketability of their work. Such is the byproduct of subordinating the importance of new meaning to a measure of commercial impact when inquiring into transformativeness.

Ignoring the new expression conveyed by the new work also impacts other expressive interests as well. Conde Nast had a magazine article to illustrate and wanted to find a picture of Prince that best fulfilled its editorial needs. Yet the upshot to the majority decision is that it was apparently not allowed to make that choice. Goldsmith gets to block it, even as the original creation of the Warhol image might still be deemed fair use until the very moment it is licensed. At that point, Goldsmith suddenly is given the power to foreclose the possibility of anyone improving upon the original, no matter how much those improvements add. The majority does not see those limitations as an issue however because it does not seem to see her portrayal as any different than Warhol’s in any meaningful way.

According to the dissent, the fact that a magazine editor might prefer one image to the other must mean the secondary use is transformative, either because it has a different aesthetic or conveys a different message. Post, at 10. […] [T]he editors of People, Rolling Stone, and Time chose a variety of different photos of Prince for their memorial issues. […] Some black and white; some depicting Prince’s “ ‘corporeality’ ”; some “realistic” or “humanistic.” Post, at 9, 16 (KAGAN, J., dissenting). These variations in aesthetics did not stop the photos from serving the same essential purpose of depicting Prince in a magazine commemorating his life and career. [Majority at 23]

In response Kagan wrote that it’s a good thing the majority isn’t in the magazine business, being so dismissive about the need for Conde Nast to have these choices available to it, choices which copyright law is supposed to make possible by encouraging there to be new works saying new things.

Suppose you were the editor of Vanity Fair or Condé Nast, publishing an article about Prince. You need, of course, some kind of picture. An employee comes to you with two options: the Goldsmith photo, the Warhol portrait. Would you say that you don’t really care? That the employee is free to flip a coin? In the majority’s view, you apparently would. Its opinion, as further discussed below, is built on the idea that both are just “portraits of Prince” that may equivalently be “used to depict Prince in magazine stories about Prince.” Ante, at 12–13; see ante, at 22–23, and n. 11, 27, n. 15, 33, 35. All I can say is that it’s a good thing the majority isn’t in the magazine business. Of course you would care! You would be drawn aesthetically to one, or instead to the other. You would want to convey the message of one, or instead of the other. The point here is not that one is better and the other worse. The point is that they are fundamentally different. You would see them not as “substitute[s],” but as divergent ways to (in the majority’s mantra) “illustrate a magazine about Prince with a portrait of Prince.” Ante, at 15, 33; see ante, at 22–23, and n. 11, 27, n. 15, 35. Or else you (like the majority) would not have much of a future in magazine publishing. [Dissent at 10].

Even when the majority does pay lip service to the expressive quality of the second work, it still fatally undervalues the importance of that quality. And part of the problem may be the majority’s fundamental misreading of the statute, where it describes the right of a copyright holder to control the creation of derivative works. The majority notes in passing that this provision is subject to the limitations of the fair use provision. But ultimately it elevates this right of the copyright holder to control above the right of another to transform a work as a fair use.

The statute defines derivative works, which the copyright owner has “the exclusive righ[t]” to prepare, §106(2), to include “any other form in which a work may be recast, transformed, or adapted,” §101. In other words, the owner has a right to derivative transformations of her work. Such transformations may be substantial, like the adaptation of a book into a movie. To be sure, this right is “[s]ubject to” fair use. §106; see also §107. The two are not mutually exclusive. But an overbroad concept of transformative use, one that includes any further purpose, or any different character, would narrow the copyright owner’s exclusive right to create derivative works. To preserve that right, the degree of transformation required to make “transformative” use of an original must go beyond that required to qualify as a derivative. [Majority at 16]

It is true that these provisions are in tension, and that others being able to make fair uses of works can seem to obviate the utility of a right to control derivatives, which is a prospect the majority seems deeply concerned about. But such an outcome is okay, and what the statute says is supposed to happen. It parses out to say that fair use allows for transformative second works, and the derivative right exists to restrain any that are not. And when the fair use provision is read with the First Amendment and its role protecting expression top of mind it makes sense to prioritize these provisions in this way. The majority, however, condemns the dissent for interpreting the statute this way:

The dissent thus misses the forest for a tree. Its single-minded focus on the value of copying ignores the value of original works. It ignores the statute’s focus on the specific use alleged to be infringing. See n. 10, supra. It waves away the statute’s concern for derivative works. Supra, at 28–29, and n. 17. It fails to appreciate Campbell’s nuance. Supra, at 29–30, 34, n. 21. And it disregards this Court’s repeated emphasis on justification. Supra, at 29–30, and n. 18, 34, n. 21. The result of these omissions is an account of fair use that is unbalanced in theory and, perhaps relatedly, in tone. The dissent’s conclusion—that whenever a use adds new meaning or message, or constitutes creative progress in the opinion of a critic or judge, the first fair use factor weighs in its favor—does not follow from its basic premise. Fair use instead strikes a balance between original works and secondary uses based in part on objective indicia of the use’s purpose and character, including whether the use is commercial and, importantly, the reasons for copying. [Majority at 37]

The concurrence further sticks in the knife, ironically complaining that, “We aren’t normally in
the business of putting a statute ‘at war with itself’” when its interpretation of how these two provisions play out together does just that.

[T]he copyright statute expressly protects a copyright holder’s exclusive right to create “derivative works” that “transfor[m]” or “adap[t]” his original work. §§101, 106(2). So saying that a later user of a copyrighted work “transformed” its message and endowed it with a “new aesthetic” cannot automatically mean he has made fair use of it. Contra, post, at 1–2, 22–23, 34–36 (KAGAN, J., dissenting). To hold otherwise would risk making a nonsense of the statutory scheme—suggesting that transformative uses of originals belong to the copyright holder (under §106) but that others may simultaneously claim those transformative uses for themselves (under §107). [Concurrence at3]

But it is the dissent that has the better the argument. Copyright law is not supposed to be about the “value” of the original work but about the value in making sure we can get more new works. By dismissing the tempering the First Amendment is supposed to supply to the copyright act via the fair use provision and its focus on new expression, the majority effectively rewrote the statute to make the derivative right the priority, at the expense of the role fair use had to play in making sure more expression is created.

Major error #2: focusing on the wrong use in considering fair use

As discussed above, the consequences of the majority’s indifference to the expressive quality of the second work are plenty significant on their own. But they are especially significant when compounded with the majority’s second error, which the first error seems to have encouraged it to commit by replacing the concerns the Court should have had for whether the second work reflected new expression with the concerns it instead had for whether the second work ever competed monetarily with the first.

In short: it made the majority lose sight of which use it was supposed to care about.

Although the decision regularly (and correctly) acknowledges that fair use is about the “copier’s use” of the original work, it based its analysis on a separate use entirely, and one not even done by the copier himself: the licensing of the subsequent work to Conde Nast. [Majority at 21 (“Only that last use, however, AWF’s commercial licensing of Orange Prince to Condé Nast, is alleged to be infringing.”)]. As the dissent observes, this is not the use the Court is supposed to be looking at, per the statute.

The majority seeks some statutory backing in what it describes as §107’s reference to the “specific ‘use’ ” of a work “alleged to be ‘an infringement.’ ” Ante, at 20; see also ante, at 2, 4 (GORSUCH, J., concurring). Because the challenged use here is a licensing (so says the majority), all that matters is that Goldsmith engaged in similar commercial transactions. But the majority is both rewriting and splicing the statute. The key part of the statute simply asks whether the “use made of a [copyrighted] work” is fair. (The term “alleged infringement,” which the majority banks on, nowhere exists in the text; indeed, all the statute say about infringement, and in a separate sentence, is that a fair use doesn’t count as one.) The statute—that is, the actual one—thus focuses attention on what the copier does with the underlying work. So when the statute more particularly asks (in factor 1) about the “purpose and character of the use”—meaning again, the “use made of [the copyrighted] work”—it is asking to what end, and with what result, the copier made use of the original. And that necessarily involves the issue of transformation—more specifically here, how Warhol’s silkscreen transformed Goldsmith’s photo. [Dissent at 20-21]

Not only did that mistaken focus skew the underlying commerciality analysis the majority relied upon, but the analytical error is one that threatens to invite all sorts of chaos, including for copyright holders.

What the Court has done, effectively, is create a sort of Schrodinger’s Infringement, because in divorcing the fair use analysis from the act of copying the original work, and tying it instead to how the later work is exploited (including through the exercise of the exclusive rights it may be entitled to by its own copyright), the majority has created a situation where the exact same work can either be fair use or infringing depending on how it is used later. Including much later, decades and decades later, and by someone who was not the copier, who may himself be long gone. In the wake of this decision, infringement liability can lay in wait for years and years before the use of a work may trigger it when any of the rights its own copyright provides are exercised. Which does not bode well for any copyright holder of any work that might somehow incorporate something of another that came first – which, as Kagan pointed out, is basically all of them.

The particular facts of this case highlight the problem. Back in the 1980s, everyone relevant to this case was still alive. By 2016, when Conde Nast went to license the Warhol picture, Prince was dead and, more importantly, Warhol himself had been dead for nearly 20 years. Which, importantly, means that it wasn’t he himself trying to license the picture. Instead it was AWF who did. But it also wasn’t AWF who had made the copy of the original work – that was done by Warhol himself.

The Court keeps referring to AWF as Warhol’s “successor-in-interest” but muddles exactly what it is a successor to. In passing, the Court acknowledges that it is effectively the assignee of Warhol’s copyrights (which he can’t own anymore, since he’s not alive). But running through this entire decision is the unstated conclusion by the Court that it was the successor to more than just Warhol’s copyrights; it was the successor to his liability.

And that’s why this case turns copyright law into a ticking liability time bomb for everyone, including copyright holders. Because we’re not talking about a liability model where someone tries to use a work that is always inherently infringing. Indeed, the Court even acknowledges that Warhol’s work might not always be infringing!  [Concurrence at 6 (“If, for example, the Foundation had sought to display Mr. Warhol’s image of Prince in a nonprofit museum or a for-profit book commenting on 20th-century art, the purpose and character of that use might well point to fair use.”)]

Instead the majority misinterprets the Campbell case, which addressed the use of the original work in making the follow-on one, to create a species of work that can be created without issue but that subsequently may sometimes be infringing, and then with it a liability model where an assignee of a copyright for one of these sometimes-infringing second works must stand in the shoes of the copier to answer for it. And then give an answer based not upon what the copier thought he was doing in making a copy but in what the later copyright holder intended to do with the work they now own.

And it is not an esoteric species the Court has created. As the dissent drove home, many new works build on something that came before. Which means that these new works, including works original enough to be entitled to their own copyrights (as Warhol’s were!), incorporate something that came before. And if that something was still under copyright, then there is a lurking lawsuit waiting for a use of that second work that happens to compete in the market for the original, and that threat is there for the entire, potentially lengthy duration of its existence. As this case illustrates, such a lawsuit might not strike for decades, including long after any of the relevant people involved may still be alive and able to defend their own transformative uses.

If works can be fair uses one day and infringing years in the future, it creates tremendous uncertainty and deters any follow-on creator from making new works off of previous ones, which fair use is supposed to affirmatively allow and even encourage. The value of any such works they might manage to create would also be less, because they might not be able to exploit them as fully as the statute might otherwise allow if they are effectively barred them from certain markets the original works might occupy. And it would encumber the value of their own copyrights by making them risky for others to acquire if those copyrights may turn out to be a source of liability, thus impacting these creators economically in exactly the same detrimental way that the majority insists copyright is supposed to protect creators from and disincentivizing their creativity.  [Dissent at 25 (“So when the majority denies follow-on artists the full reward of their creativity, it diminishes their incentive to create.”)]

These implications are why the statute only makes sense when fair use is an inquiry into the use of the original because that is what we need to know was a fair or infringing use of that original work. And it is also why, first and foremost, we always need to ask what the new work did that the original didn’t. Because if the answer is, like in this case, to say something new that the original did not, then that new meaning will always be present no matter how that work is later used. (In fact, as the dissent argues, it may even be why the second work is used.)

It is also why the majority focusing on the wrong use so doomed this case. What the majority notes in passing in footnote 9 should have been the end of it:

AWF sought a declaratory judgment that would cover the original Prince Series works, but Goldsmith has abandoned all claims to relief other than her claim as to the 2016 Condé Nast license and her request for prospective relief as to similar commercial licensing. Brief for Respondents 3, 17–18; Tr. of Oral Arg. 80–82 [Majority at 21]

AWF sued to make sure that Warhol’s copying of the Goldsmith’s picture was a fair use. It does not appear that Goldsmith disputed that it was. Her dispute was about a later use of the later Warhol work, even though its underlying legitimacy was no longer in question once she dropped her claims. Her invitation to the courts to shift the focus from an inquiry into Warhol’s copying to an inquiry about the later use of the orange Prince picture was an invitation the Supreme Court (and even Second Circuit) should have declined because it doesn’t even seem to be the answer to the lawsuit AWF filed – her dropping of her claims challenging Warhol’s copying was.

But with that shift in her focus the case did not end there, and instead of cleaning up the mess the Second Circuit made (it got the use wrong too) an officious Supreme Court has now left us with a pile of new questions that are not answered by its decision, including what happens next, in this case or any others sure to follow in its path. For instance, if Conde Nast had not already licensed and printed the Warhol picture, would it still be able to make that choice to publish it? Can any other magazine?

If a magazine can still run it, is Goldsmith entitled to remuneration if it does? The majority seems to suggest that she’s entitled to a “portion” of the proceeds, but how much is that portion? Under what theory does she get just a portion, if the work is infringing? Does the Court mean to say that she is allowed to control all the uses of the picture? Which ones? Does she effectively now own it? If she doesn’t own it, what does AWF still own? And if she is entitled to some economic benefit from the use of the orange Prince picture, does that not make her unjustly enriched by Warhol’s later creativity that imbued the picture with the new meaning Conde Nast was attracted to? After all, the thing about the picture that Conde Nast wanted wasn’t the thing that she put there, or else it could have licensed her picture. What Conde Nast wanted was what Warhol had put there, and as part of a transformation that the majority itself acknowledges could still be fair use. Is his creativity something that she should be able to profit from?

The majority avoided these questions because it never asked them nor any of the other questions it should have been asking. By only looking at the later use of Warhol’s work, and never inquiring as to what made his work even something that anyone would want to use, the Court has created an unnavigable nightmare for everyone.

Filed Under: 1st amendment, andy warhol, commercial use, copyright, fair use, free speech, licensing, lynn goldsmith, prince, supreme court

Companies: andy warhol foundation, conde nast

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