By Brian S. Conlon

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

When is it fair (i.e. legally faultless) to use someone else’s creative work in creating your own and when is it not (i.e. copyright infringement)? Where should courts draw the line between derivative works, which require the permission of the underlying copyright holder, and fair use, which does not?

Any day now, and for the first time in nearly 30 years, the United States Supreme Court is set to decide this moral quandary turned copyright conundrum. Whatever decision the Court ultimately reaches, it is sure to have a far-reaching impact on copyright law. It may also help frame future jurisprudence as the specter of generative AI looms over and promises to disrupt creative communities and the legal professionals who serve them.

The Fair Use Doctrine is an affirmative defense to copyright infringement. It seeks to draw a balance between an artist’s intellectual property rights and the ability of other artists to express themselves by referring to the works of others.[1] If a use is fair, no permission is necessary. If not, then the work is a “derivative work” for which permission of the original copyright holder is required. A failure to get permission to create a derivative work is copyright infringement.

The non-exclusive factors courts consider in determining whether a use is fair are codified in the Copyright Act, § 107. The first, and the only factor the Court accepted for review in the matter at hand, Warhol Foundation v. Goldsmith et al. U.S. No. 21-869, is: “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.”[2] The last time the Supreme Court addressed this factor in the context of two creative works was Campbell v. Acuff-Rose, Inc., 510 U.S. 569 (1994). There, the Court held that commercial use is not presumptively unfair and therefore 2 Live Crew’s parody of Roy Orbison’s “Pretty Woman” may be fair use within the meaning of § 107 despite it having a commercial purpose.[3] But the Supreme Court has provided no guidance on how to interpret the murky “purpose and character” language in the context of a non-parodic use of one artist’s work by another.

The facts of the Warhol case date back to 1981 when photographer Lynn Goldsmith took photos of Prince for Newsweek Magazine. In 1984, Vanity Fair licensed one of Goldsmith’s Prince photos for “artist’s reference in connection with an article.” Andy Warhol was that artist. He created an illustration based on the photograph for the article published in Vanity Fair. Unbeknownst to Goldsmith, Warhol also created a “Prince Series” based on the photo—twelve silkscreen paintings, two screen prints, and two drawings all typical of Warhol’s pop art style. That series has been displayed at museums, sold at auction, and appeared in books, magazines, and promotional materials. In 2016, Goldsmith became aware of Warhol’s expanded use of her photo when Condé Nast used one of the prints for a cover of its magazine following Prince’s death. That use gave rise to the dispute.[4]

The Warhol estate preemptively filed for a judicial declaration that none of the sixteen works in the Prince Series infringe Goldsmith’s photo. Goldsmith counter-claimed for copyright infringement.

Both sides moved for summary judgment. The district court found in favor of Warhol, holding that because, in that court’s view, the prints were artistically transformative, they qualified as fair use.[5] In a line one might expect to see accompanying a museum display, the district court found that, “Ultimately, Warhol’s alterations wash away the vulnerability and humanity Prince expresses in Goldsmith’s photograph and Warhol instead presents Prince as a larger-than-life icon.”[6]

The Second Circuit reversed.[7] It found that Warhol’s work was not transformative and that the district court improperly grounded its fair use analysis and conclusion in a “subjective evaluation of the underlying artistic message of the works rather than an objective assessment of their purpose and character.”[8] The Second Circuit made plain that the court’s focus on the recognizability of the works as a “Warhol” should not factor into the transformation analysis or else the court would be endorsing a “celebrity-plagiarist privilege: the more established the artist and the more distinct that artist’s style, the greater leeway the artist would have to pilfer the creative labors of others.”[9]

The question before the Supreme Court now is to what extent the meaning or message imbued by the second artist should play a role in determining whether a use is fair.

At oral argument, creativity and practicality appeared to be at the forefront of the justices’ minds.[10] While Justice Kagan appeared to support the idea that the degree of creativity of the second work should play some role in determining whether a work is derivative or fair use, most of her colleagues seemed to worry of the practical import of formalizing some evaluation of creative merit in factor 1. All who spoke on the subject appeared particularly weary of the idea that a ruling in Warhol’s favor would mean that if a film based on a novel were artistic enough in the view of the courts, a movie studio would not need the rights to the underlying novel to create a movie based on that novel. This would significantly undermine how the entertainment business currently works and leave downstream rights holders out in the cold with little incentive to create the types of original works constituting the lifeblood of that industry.

The usually stoic Justice Thomas posed a hypothetical to the Warhol Foundation attorney attempting to test the limits of the meaning or message test Warhol’s side proposed. He asked that if he were both a Prince fan and a Syracuse Orange fan and dummied up the Warhol’s Orange Prince print, modifying the colors and writing “Go Orange” underneath and waiving it at games, if the Warhol Foundation would sue him. After the attorney indicated that Justice Thomas’s hypothetical use would have a weak fair use argument, Justice Sotomayor returned to this hypothetical, musing that use might be more fair than Warhol’s because it lacked a commercial purpose, and even if it had one, was explicitly transformed by the “Go Orange” designation, obviously different from Warhol’s intended message.

Towards the end of the argument, the Court—Justices Kavanaugh, Kagan, Jackson, and Comey Barrett all getting into the mix—grappled with what precise language the government, serving as amici supporting Goldsmith, would use to fashion a test for justification of the use. The government landed on “necessary, or at least useful” in order to “achieve a distinct purpose” in the new work. But, as Warhol’s counsel pointed out on rebuttal, that formulation seems easy to meet and is almost certainly met with Warhol’s use of the photo—it was at least useful to whatever message he sought to convey.

In sum, while the Court appeared to favor Goldsmith’s position, it had not landed on a formulation to clarify and expound upon what “purpose and character of the use” means in the fair use context. Whatever formulation the Court ultimately comes up with will be the scaffolding upon which courts will build its house of copyright jurisprudence to deal with the recent and accelerating technological advances in creative endeavors traditionally reserved for humans.

With the advent and popularity of generative AI, the U.S. Copyright Office has been, and soon the federal courts will be, faced with the question of what merits copyright protection and the extent to which artificial intelligence can use human-made work to learn to create art based on human prompts without compensating those humans.

Last year, the U.S. Copyright Office rejected attempts to copyright works of visual art created substantially by AI, finding that it lacked “human authorship.” That decision is being challenged in Thaler v. Perlmutter, 1:22-cv-01564 (D.D.C. June 2, 2022), currently pending.

Earlier this year, Visual AI platforms like Stable Diffusion and Midjourney, which learn to create their visual art from studying (or copying depending on who you ask), as only AI can, hundreds of thousands of copyright protected human-created images, were sued in a putative class action in the Northern District of California (Anderson v. Stability AI Ltd. et al, No. 23-cv-00201) for copyright infringement by three human artists whose work these platforms used without those artists’ permission.  

While the Supreme Court did recently find that it was fair use for Google to scan digital copies of books to create a search functionality and display snippets of those works, that fairness analysis seems to be less at the forefront of what courts will likely consider when it comes to these largescale AI learning and iterative creating models than the very human questions posed in the Warhol case.[11] Where do we draw the line between fair use for a higher artistic purpose and unfair copying? Does it matter how subjectively creative or transformative we believe the second work is, be it human or AI created? 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, who might create precisely the same art or something even more transformative, not be allowed to do so?

It all remains to be seen. But as creatives and those fortunate enough to represent their interests attempt to navigate this brave new world, the first guidepost may be laid in a case whose facts harken back to an age long gone. An iconic musician, a rock and roll photographer, three print magazines, and one of the best-known visual artists of the last century walk into a courtroom. What they come out with may determine the course of copyright law and the future of the creatives it is meant to serve for decades to come.

[1] Blanch v. Koons, 467 F.3d 244, 250 (2d Cir. 2006).

[2] 17 U.S.C. § 107.

[3] Campbell v. Acuff-Rose, Inc., 510 U.S. 569 (1994)

[4] Warhol Foundation v. Goldsmith, 382 F.Supp.3d 312, 318-322 (S.D.N.Y. 2019)

[5] Id. at 329.

[6] Id.

[7] Warhol Foundation v. Goldsmith, 11 F.4th 26 (2d. Cir. 2021).

[8] Id. at 32.

[9] Id. at 43.

[10] The complete transcript of the oral argument is available here: https://www.supremecourt.gov/oral_arguments/argument_transcripts/2022/21-869_g314.pdf. The audio is available here: https://www.supremecourt.gov/oral_arguments/audio/2022/21-869

[11] Google v. Oracle America, 141 S.Ct. 1183 (2021).

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.