The Court’s Failure to Recognize Image Licensing for Editorial Purposes Is Bad News for Content Providers

Justice Kagan then reviews and rejects the idea that both are just “portraits of Prince” that may be used equivalently in a magazine story about Prince: “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.”

For those with experience in the magazine business, those words resonate deeply. Magazines in general endeavor to develop a unique style and content to differentiate themselves from their competitors and target particular reader demographics. Accordingly, to say that Newsweek, a newsweekly, and Vanity Fair, a monthly magazine about popular culture and fashion, would be interested in the same cover photo or artwork is highly unlikely. Yet that is what the U.S. Supreme Court would lead us to conclude in this case.

To briefly summarize the facts, in 1984, Vanity Fair licensed a photograph of the musician Prince from Lynn Goldsmith, a rock-and-roll photographer, for use as an “artist reference for an illustration” for a magazine story about the musician. The license was for “one-time use only” and Goldsmith was paid $400. The artist hired by Vanity Fair was Andy Warhol. Warhol made a silkscreen using the photo, and it was included in Vanity Fair’s article about Prince. Goldsmith was credited for the “source photograph.” Unbeknownst to Goldsmith, however, Warhol also made 15 additional works. When Prince died in 2016, Condé Nast, the publisher of Vanity Fair, contacted the Andy Warhol Foundation (AWF)—Andy Warhol had died in 1987—about reusing the 1984 image for a special issue commemorating Prince. AWF then informed Condé Nast about the availability of the other images, and Vanity Fair selected an orange silkscreen portrait to use on the magazine cover instead. Condé Nast paid AWF $10,000 for the license. However, “Goldsmith received neither a fee nor a source credit.”

After the commemorative issue was published, Goldsmith saw that her photo had been used and threatened to sue for copyright infringement if she was not paid a substantial sum of money. AWF then sought a declaratory judgment of noninfringement or, in the alternative, fair use. The U.S. District Court for the Southern District of New York granted summary judgment for AWF, holding that the Prince series of works made fair use of the photograph and that, under the first fair use factor, the works were “transformative.” On appeal, that decision was reversed by the U.S. Court of Appeals for the Second Circuit. The Supreme Court, in a 7–2 opinion, ultimately affirmed the decision of the Second Circuit, with Justice Kagan dissenting, joined by Chief Justice Roberts.

At the beginning of the majority opinion, Justice Sotomayor sets out the issue to be addressed and how it must be resolved:

In this Court, the sole question presented is whether 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,” § 107(1), weighs in favor of AWF’s recent commercial licensing to Condé Nast. On that narrow issue, and limited to the challenged use, the Court agrees with the Second Circuit: The first factor favors Goldsmith, not AWF.

In making this determination, Justice Sotomayor emphasized that despite any further purpose or different character of the use of the photograph, “the degree of difference must be weighed against other considerations, like commercialism.” Here, the specific use of Goldsmith’s photograph is as a portrait of Prince used to depict Prince in magazine stories about Prince so “the original photograph and AWF’s copying use of it share substantially the same purpose. Moreover, the copying use is of a commercial nature.” As a result, and irrespective of any new expression, “the first fair use factor still favors Goldsmith.”

What is somewhat remarkable here is that the Court reduces the analysis of the kind of use here to an either/or—“whether such use is of a commercial nature or is for nonprofit educational purposes.” Significantly, the wording of § 107(1) refers to “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” Certainly, by using the word “including,” it is apparent that “commercial use” or “nonprofit educational purpose” are not the only two possibilities.

Indeed, Justice Sotomayor does briefly consider the “purposes” set forth in the preamble of § 107: “criticism, comment, news reporting, teaching . . . , scholarship, or research.” She also recognizes that those examples are “illustrative and not limitative” and, citing Campbell v. Acuff-Rose Music, that they reflect the “‘sorts of copying that courts and Congress most commonly ha[ve] found to be fair uses,’ and may guide the first factor inquiry.”

What is difficult to understand is why the ultimate actual use here, for news reporting about the death of Prince, was completely omitted in the Court’s analysis. Instead, the Court describes the usage as a “commercial” licensing transaction between AWF and Condé Nast. Although the Court recognizes that the use is for a magazine cover for a special edition of Vanity Fair commemorating Prince, the only distinction that the Court makes is that the use is “commercial as opposed to nonprofit.” By so doing, there is an important factor missing from the Court’s analysis.

In the real world of magazine photo licensing, there are not only two kinds of licensing of the types described by the Court, i.e., commercial or nonprofit. To the contrary, there is another significant category of usage that is known as “editorial,” or “for editorial purposes.” For example, the very beginning of the American Society of Media Photographers’ long-standing and well-respected guidebook, ASMP Professional Business Practices in Photography, provides as follows: “The business of professional photography is broken into three main categories of use. Commercial refers to photography that is used to sell or promote a product, service, or idea. Editorial refers to photography used for educational or journalistic purposes. Retail refers to photography commissioned or purchased for personal use.” The examples given of editorial use are editorial content in magazines, newspapers, and online news sources. In addition, a photojournalism expert I spoke to expressed surprise that there was no reference to editorial licensing in the Warhol decision.

In her harsh comments on the majority’s decision, Justice Kagan states,

The majority holds that because Warhol licensed his work to a magazine—as Goldsmith sometimes also did—the first factor goes against him. It does not matter how different the Warhol is from the original photo—how much “new expression, meaning, or message” he added. . . . 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.

Of course, there is no way of knowing what the Court would have done and whether it would have reached the same conclusion if it had recognized (or been advised) that the actual usage of Goldsmith’s photo was for an editorial purpose that was more similar to an educational or nonprofit usage than a commercial one. As stated by the Court, “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.” Perhaps understanding that the secondary use was not actually “commercial” would have tipped the balance in favor of AWF instead of Goldsmith. Unfortunately, however, this finding of commercial purpose for standard magazine licensing rather than editorial use is likely to improperly and unfairly influence the outcome of many fair use determinations going forward.

In considering the Supreme Court’s decision, there is also reason to wonder whether the background of the case had an influence on the ultimate decision. As mentioned above, Goldsmith had been paid a licensing fee by Condé Nast for a one-time use of her Prince photograph as an artist reference. When the second usage opportunity arose, Goldsmith received nothing; only AWF was paid. Given the vagaries of fair use law and the facts of this case, it may have been a lot easier if AWF or Condé Nast had decided before the magazine was published to make some payment to Goldsmith, necessary or not. Indeed, the failure to make a payment to Goldsmith has been referred to by some as a “breach of contract.” For example, the former head of content management and multimedia licensing for a major magazine publishing company told me that “although the decision was necessary in this particular case because of the breach of contract (i.e., need to pay Lynn Goldsmith something), it could well have repercussions for legitimate transformative art and editorial fair use of that art.”

In general, as far as photographers are concerned, groups like the National Press Photographers Association were understandably pleased with the outcome. As one representative commented to me, “Had it come out differently, it would have been extremely detrimental to our members.”

For those representing artists, however, the prognostications are grim. As Professor Amy Adler wrote shortly after the Supreme Court’s decision came down, “it is now far riskier for an artist to borrow from previous work.” Accordingly, Professor Adler’s advice to young artists is the following:

Any artist who works with existing imagery should now reconsider her practice. Hire a lawyer, maybe try to negotiate a license and be ready to move on if you get turned away or can’t afford the fee. The safest and cheapest route—a consideration particularly relevant to younger artists and those who are not rich and famous—is to just steer clear of referencing existing work. Maybe that’s the right direction for art; maybe copying and relying on past work should be discouraged. But given the centrality of allusion, emulation, and copying to the history of art, it’s hard to imagine that’s a good thing. . . . But like it or not, these are not questions that artists, critics, and art audiences get to decide. The Supreme Court just changed the future of art.

The same warning may well be given to magazine editors, journalists, and others working in the magazine and digital media businesses. The ability of the editorial team that historically had the artistic freedom to experiment and to be creative and innovative in depicting and illustrating the issues of the day has now become more limited. The traditional separation between “church and state” in publishing and journalism is now in question: those on the editorial side are as much in the business as their business-side publishing colleagues. This is not an outcome that will likely be beneficial to anyone.

To Justice Kagan, the consequences of the majority’s ruling for other artists are also “troubling.” She ends her dissenting opinion with the following warning:

If Warhol does not get credit for transformative copying, who will? And when artists less famous than Warhol cannot benefit from fair use, it will matter even more. . . . It will stifle creativity of every sort. It will impede new art and music and literature. It will thwart the expression of new ideas and the attainment of new knowledge. It will make our world poorer.

For already market-challenged magazine publishers and related businesses along with their creative teams, together with other content providers, this new swing of the fair use pendulum augurs tougher times ahead. As readers and consumers of contemporary culture, we likely stand to lose out as well.