By Brian S. Conlon

Published in the California Lawyers Association Fall 2023 issue of New Matter

A few months ago, I wrote about the U.S. Supreme Court’s much anticipated decision following a spirited oral argument in Warhol Foundation v. Goldsmith. To refresh the reader, the case presented the question of whether the first copyright 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,” weighed in favor of the Warhol Foundation’s commercial licensing for a magazine cover of a silkscreen portrait (part of a series used previously in a magazine) that Warhol made based on a photographer’s copyrighted portrait of Prince.[1]

On May 18th, in an opening foray during what turned out to be an eventful term—a number of controversial and precedent upending opinions at term-end addressed LGBTQ+ rights, the First Amendment, affirmative action in higher education, voting rights, and Lanham Act exterritoriality—the Supreme Court issued its 7-2 decision.

The Court provided almost no direct answers to the big legal questions I felt the facts of the case raised. The majority opinion did, however, set the course for copyright law’s immediate and potential long-term future. And in this, given the coming AI-content revolution, that opinion may prove crucial.

Here are the questions I posed and the answers the Court provided (sort of):

Q. When is it fair (i.e., legally faultless) to use someone else’s work in creating your own and when is it not (i.e., copyright infringement)?

A. It depends in substantial part on whether the specific use competes in the market with the original work.[2]

Justice Sotomayor’s majority opinion seemed to hedge on that answer. It suggested a work might be transformative enough to overcome it being used to compete with the original work:

A use may be justified because copying is reasonably necessary to achieve the user's new purpose. Parody, for example, needs to mimic an original to make its point. Similarly, other commentary or criticism that targets an original work may have compelling reason to “conjure up” the original by borrowing from it. An independent justification like this is particularly relevant to assessing fair use where an original work and copying use share the same or highly similar purposes, or where wide dissemination of a secondary work would otherwise run the risk of substitution for the original or licensed derivatives of it.[3]

Justice Gorsuch harbored no such doubt. His concurrence made clear his view (joined in by Justice Jackson) that the first fair-use factor is and ought to be solely an economic inquiry:

Does Mr. Warhol's image seek to depict Prince as a “larger-than-life” icon while Ms. Goldsmith's photograph attempts to cast him in a more “vulnerable” light? Or are the artistic purposes latent in the two images and their aesthetic character actually more similar than that? Happily, the law does not require judges to tangle with questions so far beyond our competence. Instead, the first fair-use factor requires courts to assess only whether the purpose and character of the challenged use is the same as a protected use. And here, the undisputed facts reveal that the Foundation sought to use its image as a commercial substitute for Ms. Goldsmith's photograph.[4]

Q. Where is the line between derivative works, which require the permission of the underlying copyright holder, and fair use, which does not?

A. There is no clear bright line. But here’s a vague Venn diagram—a fair use work must be at least more transformative than the minimum required to make a work derivative.

The majority opinion stated:

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 subject to fair use. 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.[5]

Hope that helps.

Q. Where is the line between fair use for a higher artistic purpose and unfair copying?

A. Again, it depends on the specific use, but not here at least.

Given that Warhol’s use had the same purpose of Goldsmith’s, “to illustrate a magazine about Prince with a portrait of Prince,” the degree of difference between the two works was “not enough for the first factor to favor [Warhol], given the specific context of the use.”[6] Even if Warhol’s work had the further purpose of commenting on the “‘dehumanizing nature’ and ‘effects’ of celebrity” that “has no critical bearing on Goldsmith’s photograph” and therefore that commentary’s claim to fairness in borrowing from her work diminishes accordingly (if it does not vanish). On the other hand, the commercial nature of the use “looms larger.”[7]

Q. Does it matter how subjectively creative or transformative the second work is, be it human or AI created?

A. It matters, but only if the second work comments on the first work. If not, then no it doesn’t.

The majority agreed with the Second Circuit that “whether a work is transformative cannot turn merely on the stated or perceived intent of the artist or the meaning or impression that a critic—or for that matter, a judge—draws from the work.”[8] 

Justice Gorsuch would go further and say it never matters: “Nothing in the law requires judges to try their hand at art criticism and assess the aesthetic character of the resulting work.”[9]

In dissent, Justice Kagan wrote that under the majority opinion, “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.”[10]

Q. Can AI art have the same type of “purpose” the district court ascribed to Warhol? If not, is that determinative? Why is a human allowed to take from another human to create art without permission and an AI, which might create precisely the same art or something even more transformative, not be allowed to do so?

A. Unanswered, but probably irrelevant. The “purpose” the district court ascribed to Warhol—the artistic transformative purpose from a photographic portrait to a stylized silkscreen of that portrait commenting on celebrity—is not important unless it is accompanied by the additional purpose of commenting on the original work.

Again, from the majority opinion:

A court should not attempt to evaluate the artistic significance of a particular work[.] The meaning of a secondary work, as reasonably can be perceived, should be considered to the extent necessary to determine whether the purpose of the use is distinct from the original, for instance, because the use comments on, criticizes, or provides otherwise unavailable information about the original.[11]

***

On the one hand, Justice Kagan’s dissent (which only the Chief Justice joined) focused on significant artistic transformation of one work to another together with reliance on the undeniable truth that art typically arises from other art. Arguably, this reflects a more humanistic view of creativity. It also hews closer to the ideal that copyright law should support art, artists, and cultural achievement regardless of origin. And distinguishing fair-use factor four, “the effect of the use upon the potential market for or value of the copyrighted work,” from factor one as “well, different” does seem more consistent with Congress’s codification of the fair use doctrine and prior judicial interpretations thereof.[12]

On the other hand, while the majority’s economic purpose analysis leaves much to be desired—some of us hoped for a reckoning over what the Constitution meant by “promoting the progress of science and useful arts,” U.S. Const. Art. 1 § 8 Cl. 8, in the fair use context—there is much to commend in its simple and pragmatic approach. This is especially so in light of the coming wave of AI-generated content.[13] It may be one thing when an iconic visual artist uses a photographer’s portrait to make his own transformative art. But with AI increasingly presenting the possibility of ascendence in the creative arts, a “humanistic” majority opinion might have meant the end of copyright law as we know it.

Ultimately, the majority opinion set aside big philosophical questions about human creativity. It asked the simple question: “What was the second work used for?”

So the syllogism is simple: If AI-generated art competes with the human art it was created from, that will not be fair use. And vice versa: If the AI-generated art does not compete with the human art it used to create it, then it could be.

This regime will no doubt foster its own difficult questions. But by eliding the most intractable ones, at least for now, the Court ensured that copyright law will hobble along at least semi-coherently while addressing AI usage and creativity on the same terms as humans, without undermining the canon of creative works that the law has traditionally protected.

In an odd twist, by rejecting the humanistic approach, the majority may have saved human creativity. The tradeoff that a follow-on artist who seeks to use another artist’s work to compete with that artist for a similar economic use must get a license from the original artist even if their art is highly transformative is perhaps a small price to pay for the peace of mind in knowing that AI and its creators, who will seek to do the same with infinite variations at warp speed, will probably have to pay for that privilege. So for now, for a Court whose Chief Justice likes to relate its work to that of baseball umpires—another line of work that may soon be overtaken by AI—I score it: Humans 1, Machines 0.[14]

 

[1] 17 U.S.C. § 107; Warhol Foundation v. Goldsmith, 143 S. Ct. 1258, 1266 (2023)

ii Warhol Foundation v. Goldsmith, 143 S. Ct. 1258, 1277 (2023) (“In sum, the first fair use factor considers whether the use of a copyrighted work has a further purpose or different character, which is a matter of degree, and the degree of difference must be balanced against the commercial nature of the use. If 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.”)

[3] Warhol, 143 S. Ct. at 1276-77 (cleaned up).

[4] Id. at 1290 (2023) (Gorsuch, J., concurring).

[5] Id. at 1275 (Sotomayor, J.) (cleaned up).

[6] Id. at 1284-85.

[7] Id.at 1285 (cleaned up).

[8] Id. at 1284.

[9] Id. at 1289 (Gorsuch, J., concurring).

[10] Id. at 1292 (Kagan, J., dissenting).

[11] Id. at 1283-84 (Sotomayor, J.).

[12] Id. at 1303 (Kagan, J., dissenting).

[13] U.S. Const. Art. 1 § 8 Cl. 8.

[14] Excerpts from Chief Justice Roberts’s Opening Statement at his 2005 Confirmation Hearing, available at https://www.uscourts.gov/educational-resources/educational-activities/chief-justice-roberts-statement-nomination-process (“Judges are like umpires. Umpires don’t make the rules, they apply them. The role of an umpire and a judge is critical. They make sure everybody plays by the rules, but it is a limited role. Nobody ever went to a ball game to see the umpire.”)

Brian Conlon is a partner at Phillips, Erlewine, Given & Carlin LLP. Brian represents and advises creatives who want to protect or enforce their intellectual property rights, including copyright, trademark, and right of publicity. He is licensed to practice in California and New York and represents clients in state and federal trial and appellate courts.