©2024. Published in Landslide, Vol. 16, No. 2, December/January 2024, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
January 16, 2024 ANDY WARHOL FOUNDATION V. GOLDSMITH
SCOTUS Reins in Transformative Use
Keith Kupferschmid
On May 18, 2023, in an opinion penned by Justice Sonia Sotomayor, the U.S. Supreme Court held in Andy Warhol Foundation v. Goldsmith that under the first fair use factor, the purpose and character of the Andy Warhol Foundation’s (AWF’s) use of Lynn Goldsmith’s photograph did not favor a fair use defense. In its legal analysis, the Court provides much-needed guidance to lower courts, copyright lawyers, and the creative community on how to apply the first fair use factor, especially the “transformative use” subfactor, and how that factor relates to the other three fair use factors. In doing so, the decision does not change copyright law but instead restores the transformative use test back to its roots as set forth in the landmark fair use case, Campbell v. Acuff-Rose Music.
In reaching its ultimate conclusion that AWF’s actions did not favor fair use under the first factor, the Court explains that while new expression, meaning, or message of a secondary work are all relevant to determining whether a use is transformative, none is dispositive. The Court instructs that further purpose or different character is a “matter of degree” that must also be weighed against elements like commercialism and the justification for the secondary use. Importantly, the Court also clarifies that “fair use is an objective inquiry into what a user does with an original work, not an inquiry into the subjective intent of the user, or into the meaning or impression that an art critic or judge draws from a work.” The Court further helps to differentiate between a use that infringes a copyright owner’s right to prepare derivative works from one that is transformative by noting that “the degree of transformation required to make ‘transformative’ use of an original work must go beyond that required to qualify as a derivative.”
For the copyright and the creative communities, the recent decision in the Warhol case is significant not just because it was a Supreme Court decision relating to copyright law but also because it was a Supreme Court decision involving one of the most controversial and complex aspects of copyright law—the fair use exception.
The impact of the Warhol case is also heightened because it is extremely rare for the Court to take on a fair use case. Although the Court did decide the fair use case of Google v. Oracle in 2021, that case was more about the scope of copyright protection afforded to a specific type of computer program than it was about fair use. The Court made clear several times that the decision in that case was limited to computer software, did not apply to other types of copyrighted works, and did nothing to “overturn or modify” fair use analyses. The Court’s decision in Warhol was not so limited.
Prior to Google v. Oracle, the last time the Court decided a fair use case was over a quarter century ago (in Campbell). As a result, if history teaches us any lesson, the Warhol decision is destined to have a lasting, significant, and widespread impact on copyright fair use jurisprudence for many years to come.
It is difficult to narrow the decision’s impact down to just one takeaway. In fact, I recently posted a two-part blog in which I discuss its 10 biggest takeaways. In my view, the most significant takeaway from the Warhol decision is its clarification that a finding of transformative use does not dictate a finding of fair use.
Since the Court first invoked the transformative use doctrine in the Campbell case, lower courts have all too often applied the doctrine in a way that encroaches upon the other three factors. In taking this approach, lower courts made transformative use the most dominant element of the fair use analysis, which in turn resulted in numerous dubious findings of fair use. A recent study on transformative use decisions through January 1, 2017, confirms this—revealing that when a court found a transformative use, 94% of the time the secondary use was held to qualify as a fair use. The study shows that
a finding of transformative use overrides findings of commercial purpose and bad faith under factor one, renders irrelevant the issue of whether the original work is unpublished or creative under factor two, stretches the extent of copying permitted under factor three towards 100% verbatim reproduction, and precludes the evidence on damage to the primary or derivative market under factor four even though there exists a well-functioning market for the use.
The Warhol opinion puts an end to this misapplication of the law by reining in transformative use analyses. The Court makes clear that each of the four fair use factors should be considered independently and that a finding of transformative use must not control a fair use determination. The Court goes a step further and clarifies that the fact that a use is transformative does not even control the first fair use factor, as it must be balanced against commercialism and the justifications for using the work. In reaching this conclusion, Justice Sotomayor explains that the Court has never held “that any secondary use that is innovative, in some sense, or that a judge or Justice considers to be creative progress consistent with the constitutional objective of copyright, is thereby transformative.” In making this declaration and at numerous other points throughout the decision, the Court effectively restores transformative use to its intended scope and application as the Court first set out in Campbell.
The significance of this holding cannot be overstated—especially in the context of artificial intelligence (AI). AI developers who have relied on the doctrine of transformative use to support their unlawful ingestion of copyrighted works to train their AI machines would be smart to reconsider whether that continued reliance is misplaced. The same is true for many others who have relied on transformative use.