Second Circuit Reverses Fair Use Decision—Holds Warhol Foundation Infringed Lynn Goldsmith’s Photo as a Matter of Law
9.7.2021
By Joel L. Hecker1
On March 26, 2021, in a much-anticipated decision, the Second Circuit reversed the Southern District of New York decision, which found that Andy Warhol’s creation of 16 silkscreen prints and pencil illustrations of the musical artist Prince, which was based upon a 1981 photograph created by photographer Lynn Goldsmith, was fair use under the United States Copyright Act. The case is The Andy Warhol Foundation for the Visual Arts v. Lynn Goldsmith and Lynn Goldsmith Ltd2 (the parties are reversed as The Andy Warhol Foundation (AWF) sought a declaratory judgment of non-infringement and Goldsmith counterclaimed for copyright infringement).
The Facts
On December 3, 1984, Goldsmith, on assignment from Newsweek magazine, created a series of photographs in her studio of the musical artist Prince. Goldsmith owns the copyright to these photographs. In 1984, her stock photography agency, defendant Lynn Goldsmith Ltd. (LGL), which at the time was known as Lynn Goldsmith Inc. or LGI, submitted a negative of one of her Prince photos to Vanity Fair magazine at Vanity Fair’s request for use as an artist reference in connection with an upcoming article about Prince. Goldsmith did not know that Andy Warhol was the artist Vanity Fair had commissioned to create the illustration of Prince.
Vanity Fair selected Goldsmith’s image to be the artist reference. That term, according to trial testimony, meant that an artist would create a work of art based on the image reference.3 LGL then granted Vanity Fair a license to use Goldsmith’s copyrighted photo for artist reference only, and further required a copyright credit in the name of Lynn Goldsmith to appear on the printed use in the magazine. This photo (the Goldsmith photo) is reproduced here, in figure 1.
Unbeknownst to Goldsmith, Warhol did not stop with the illustration that Vanity Fair had commissioned him to create, which is the following illustration (The Warhol Illustration) figure 2.
Warhol also created an additional 15 works, which together with the Warhol Illustration became known as the Prince Series. Copies of three of the Prince Series that were included in the panel’s opinion appear in figure 3.
The Warhol Illustration was published in the November 1984 Vanity Fair magazine together with the required credit to Goldsmith alongside the Warhol Illustration. In addition, there was also a separate attribution to Goldsmith crediting her with the source photograph for the Warhol Illustration.
After Warhol’s death, AWF acquired title to and copyright in the Prince Series illustrations. Between 1993 and 2004, AWF sold or otherwise transferred 12 of the Prince Series illustrations to third parties, and in 1998 transferred the other four to the Andy Warhol Museum. However, AWF retained copyright in the Prince Series illustrations and began licensing these illustrations for editorial, commercial, and museum usage.
Prince died on April 21, 2016. The next day Conde Nast (CN), the parent company of Vanity Fair, contacted AWF to determine whether AWF still had the Warhol Illustration that had run in the 1984 issue of Vanity Fair, as CN hoped to use it in connection with the planned special magazine edition of Vanity Fair commemorating Prince’s life. CN then learned from AWF that AWF had the entire Prince Series. CN ultimately obtained a commercial license from AWF for a different illustration from the Prince Series, which was used for the cover of the tribute magazine, published in May 2016. No credit or attribution was given to Goldsmith in the tribute magazine for the source image. Instead, the credit was given to AWF.
Goldsmith first became aware of the Prince Series when she saw this commemorative May 2016 issue of Vanity Fair magazine. Goldsmith then contacted Vanity Fair and AWF to discuss this infringement of her copyright.
The parties began negotiations to resolve the matter but on April 7, 2017, AWF sued Goldsmith and LGL in the United States District Court for the Southern District of New York for declaratory judgment of non-infringement or, in the alternative, for fair use. Goldsmith countersued for copyright infringement, based upon the above facts, under 17 U.S.C. Sections 106 and 501.
Fair Use Factors
The district court had found that the first, third, and fourth statutory non-exclusive fair use factors favored AWF and the second factor was neutral. The Second Circuit panel disagreed and concluded that all four factors actually favored Goldsmith. The four factors, set forth in 17 U.S.C. Section 107, are:
1. the purpose and character of the use, including whether such use is of a commercial nature or is for non-profit 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 First Fair Use Factor
The principal takeaways from the Second Circuit panel decision on the first factor, which are instructive for those who deal with copyright fair use matters, are:
• The panel noted that recent court decisions have placed undue reliance upon the transformative aspect of the first factor, often determining that a transformative use was sufficient for a fair use finding irrespective of the other three factors. The panel limited the Second Circuit 2013 Cariou v. Prince decision4 to its facts and went out of its way to write that “our review of the decision below persuades us that some clarification is in order.”5 The Cariou decision has, as the panel noted, “not been immune from criticism.”6 That is an understatement, to say the least, and this reversal in Goldsmith goes a long way to correct what many have perceived to be Cariou’s flawed fair use analysis.
• The panel stated that “the district court appears to have read Cariou as having announced [a single bright-line] rule, to wit, that any secondary work is necessarily transformative as a matter of law.”7 However, held the panel, it does not follow that any secondary work which adds a new aesthetic or a new expression to its source material is necessarily transformative. This is particularly instructive as to derivative works, since that category is specifically excluded from the scope of fair use.
• Courts typically consider the purpose of the primary and secondary works in determining if the secondary was transformative. The panel pointed out that the common thread in those cases, “where the secondary work does not obviously comment on or relate back to the original or use the original for a purpose other than that for which it was created,”8 the bare assertion of a “higher or different artistic use “is insufficient to render a work transformative.9
On this point, the panel held that the secondary work “must, at a bare minimum, comprise something more than the imposition of another artist’s style on the primary work such that the secondary work remains both recognizably derived from, and retaining the essential elements of, its source material.”10 That is, the panel found the district court’s conclusion that, “each Prince Series work is immediately recognizable as a Warhol” is irrelevant to the transformative analysis, since that logic “inevitably creates a celebrity-plagiarist privilege.”11
The Second Fair Use Factor
This factor considers the nature of the copyrighted work. The district court held the Goldsmith Photo to be both unpublished and creative, but nonetheless concluded that the second factor could favor neither party because LGL had licensed it to Vanity Fair and because the Prince Series was highly transformative. The panel concluded that this was error and reversed, holding that once the district court recognized the Goldsmith Photo as both creative and unpublished, it should have held that this factor favored Goldsmith, “irrespective of whether it adjudged the Prince Series transformative.”12
The Third Fair Use Factor
The district court weighed this factor, the amount and substantiality of the use, in favor of AWF, because it found that Warhol removed nearly all of the Goldsmith Photo’s copyrightable elements. The panel reversed, holding that this district court analysis missed the mark since, while Goldsmith had no monopoly on Prince’s face, the law granted her a broad monopoly on his image as it appeared in her photographs of him.13
The panel concluded that the Prince Series borrowed significantly from the Goldsmith Photo both quantitatively and qualitatively. It looked at the other photographs by other photographers that AWF had submitted as part of its motion for summary judgment in support of its proposition that the Prince pose captured by Goldsmith was not unique to the Goldsmith Photo.14 The panel concluded that these other photos had the opposite effect—“that the Prince Series would be quite different had Warhol used one of them instead of the Goldsmith Photo to create it.”15 In fact, the Warhol illustration copied many details of the Goldsmith Photo, including “the glint in Prince’s eyes where the umbrellas in Goldsmith’s studio reflected off his pupils.”16
The Fourth Fair Use Factor
The panel unequivocally stated that, as to the fourth factor analysis of effect on the market for the original, the test is not whether the secondary work would damage the market for the first, but whether it usurps that market by offering a competing substitute. The panel rejected the district court’s rationale that the market for licensing Warhol’s works (or by extension any famous artist) is a market for “Warhols,” since this would permit this aspect of the fourth factor always to weigh in favor of the alleged infringer when there is an active market for such works. The panel had no problem reversing the district court on this factor, finding that the markets for licensing Goldsmith’s work and the Prince Series overlap in both the existing market, the potential market, and the derivative markets for Goldsmith’s Photo. (The case did not involve the sales of the original 16 Warhol works, as they were sold or donated to museums prior to the running of the statute of limitations.)
Substantial Similarity
The district court did not analyze the issue of substantial similarity, which it found unnecessary, since it found in favor of fair use. The panel ruled on the procedural issue that it did not have to remand the case, because it could determine that there was substantial similarity between the Goldsmith Photo and the Prince Series as a matter of law. The panel reached this conclusion because: i) Warhol did not create the Prince Series by taking his own photograph of Prince in a similar pose; ii) Warhol did not attempt to merely copy the idea conveyed in the Goldsmith Photo; and iii) in fact, Warhol copied the Goldsmith Photo itself, which was Goldsmith’s particular expression of that idea.17
Summary
In summary, the panel limited those parts of the Cariou decision that had been subject to extensive criticism, and clarified to a great extent how the fair use test should be applied. Hopefully, it will provide useful guidance for copyright practitioners.
Joel L. Hecker, principal of the Law Offices of Joel L. Hecker, practices in every aspect of photography and visual arts law, copyright, licensing, publishing, contracts, privacy rights, trademark and other intellectual property issues, as well as real estate and estate planning matters. He has acted as general counsel to the hundreds of professional photographers, stock photo agencies, graphic artists and other photography and content-related businesses he has represented nationwide and abroad. He also lectures and writes extensively on issues of concern to these industries. He is past chair and a member of the Copyright and Literary Property Committee of the New York City Bar Association, a longtime member and past Trustee of the Copyright Society of the U.S.A., and a member of the EASL Section. He has also been continually designated as a New York Super Lawyer. He can be reached at (917) 848-9373, at his website www.HeckerEsq.com, or via email: HeckerEsq@aol.com.
Endnotes
1 Disclaimer: The author was co-counsel for Lynn Goldsmith on the district court level proceedings, but not on the appeal.
2 The Andy Warhol Foundation for the Visual Arts, Inc. v. Lynn Goldsmith et al, United States Court of Appeals, 2d Circuit, Docket No. 19-2420-cv, filed March 26, 2021 (“Opinion”). The district court opinion can be found at 382 F. Supp. 3d 312 (S.D.N.Y. 2019).
3 Opinion at 8; district court opinion at 783.
4 Cariou v. Prince (714 F. 3d 694).
5 Opinion at 18.
6 Id.
7 Opinion at 18-19.
8 Opinion at 25.
9 Id.
10 Opinion at 28.
11 Opinion at 31.
12 Opinion at 37.
13 Opinion at 39.
14 Opinion at 41.
15 Id.
16 Opinion at 43.
17 Opinion at 55.
