In a recent decision[1], the US Supreme Court has clarified copyright law in a way that should be of interest to creative people. Because it involves high-profile celebrity artists and a relatable set of facts, it’s gotten quite a bit of media attention. Unfortunately, a lot of that attention is pretty sensational, more than a little scare-mongering, and somewhat misguided when it comes to the decision’s impact on copyright law. That’s because while the decision could be seen as tightening the rules on fair use, it’s really more of a clarification that’s ultimately helpful to most creators.

The case, Andy Warhol Foundation for the Visual Arts v. Goldsmith (598 U. S. ____ (2023)[2], stems from a 1984 license agreement between photographer Lynn Goldsmith and Vanity Fair magazine. Vanity Fair was doing a story about the musician Prince, and had commissioned Andy Warhol to create a portrait using Goldsmith’s photo as an “artist reference.”

So far so good. It’s common practice for an artist to license their work to others for specific uses. In this case, Goldsmith had given Vanity Fair permission to provide the photo to Warhol as inspiration, with the limitation that the illustration was “to be published in Vanity Fair November 1984 issue. It can appear one time full page and one time under one quarter page. No other usage right granted.” Goldsmith received $400 and a credit as the source of the photograph.

If the story had ended there, we wouldn’t be having this discussion. But Warhol, all on his own initiative, proceeded to make sixteen different treatments of the Prince photograph.

And if the story ended there, it would probably still be OK. But when Warhol died in 1987, ownership of all his works—including those based on Goldsmith’s licensed photograph—passed to the Andy Warhol Foundation for the Visual Arts. Over the next decades, the Foundation sold 12 of the Prince works to collectors and galleries, and donated the remaining four to the Andy Warhol Museum in Pittsburgh.

In 2016, Prince died, and Vanity Fair’s publisher approached the Foundation for permission to re-use the 1984 image for a commemorative magazine. Informed of the existence of alternative works, the publisher instead licensed “Orange Prince,” paying the Foundation $10,000 for a license. Goldsmith, who was unaware of the new license and had received neither a fee or credit, saw the commemorative issue on a newsstand, and immediately contacted the Foundation to inform them that her copyright had been violated. The Foundation’s response was to sue Goldsmith, seeking a declaratory judgment that she had no basis to sue them. (A declaratory judgement is when one or both of the parties to a lawsuit ask a court to “declare” that there is or is not an issue to be litigated or a right to be protected.)

The district court found Warhol’s use was covered by fair use as transformative, and decided that “transformativeness” alone took precedence over all other considerations. The trial court said that Warhol’s treatments “have a different character, give Goldsmith’s photograph a new expression, and employ new aesthetics with creative and communicative results distinct from Goldsmith’s.” The court held that Warhol “can reasonably be perceived to have transformed Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure,” and that “each Prince Series work is immediately recognizable as a ‘Warhol’ rather than as a photograph of Prince.”

So think about that decision for a moment. If that’s the law, then anyone with a unique, identifiable style can take anyone else’s creative work and make some modification to it based on their unique, identifiable style, and successfully argue that it’s transformative and therefore a fair use.

Goldsmith appealed the decision, and the court of appeals reversed. The court of appeals found that just because a secondary work “adds a new aesthetic or new expression to its source material” doesn’t make it transformative. Transformative implies, said the court, that “the secondary work’s use of its source material is in service of a fundamentally different and new artistic purpose and character.” That use “must, at bare minimum, comprise something more than the imposition of another artist’s style on the primary work.”

The Foundation appealed to the US Supreme Court. So the Supreme Court was faced with this basic question: how transformative is transformative? And how fair is a fair use based on a transformative use? And on both questions, a 7-2 majority sided with Goldsmith.

The Four Factors

Just a quick note that when a court is asked to determine whether or not something constitutes fair use they look to four factors:

1. Purpose and Character of the Use (is the use transformative—does it result in a wholly new creative work—and was it done for profit?)
2. Nature of the Copyrighted Work (is the infringed work creative or not? Creative works get more protection, so for instance a work of fiction is more protected than a work of nonfiction.)
3. Amount and Substantiality of the Use (how much of the original work was used?)
4. Market Effect of the Use (does the use hurt the original work’s commercial value?)

In theory, the four factors are weighed equally. But some courts have held that the fourth one is the most important (because it literally causes damage to the original), while other focus on the first one.

The Supreme Court decided that the key legal issue facing them was the first fair use factor: the purpose and character of the use. The Foundation argued that Warhol’s treatment of Goldsmith’s photo was transformative, and that Warhol had created a totally new work—“recognizable as a ‘Warhol’.” Goldsmith, on the other hand, maintained that the use was not transformative—that it only modified her original photograph without creating anything arguably new.

The Supreme Court Defines What’s Transformative

In its decision, the Supreme Court made this important observation, clarifying the notion of “transformative use”:

“Use of a copyrighted work that arguably conveys a different meaning or message from the original is not enough to determine that a use is fair, particularly where both works are used for the same commercial purpose.” [emph. added]

What the Court is saying is that it’s not enough to use a copyrighted work to create something that looks different from the original. It’s not enough that the “new” work has a different meaning from the original. If both works have the same commercial purpose, the same audience, the same platforms, then it’s probably not fair use. Note that there’s nothing new here: commercial use and market effect have always been a part of the analysis. The Court is simply clarifying how the four factors should work together.

When Prince died, many magazines featured photos of him. Some of those photos, in fact, were licensed from Goldsmith’s collection. The publisher in this case could also have licensed a photo from Goldsmith that had not been “Warhol-ed,” but chose not to. What that means is that both Goldsmith’s photos and Warhol’s treatments of Goldsmith’s photos served the same market, and both had the same purpose. And that, said the Court, is where the idea of transformative use broke down.

“Lynn Goldsmith’s original works, like those of other photographers, are entitled to copyright protection, even against famous artists. Such protection includes the right to prepare derivative works that transform the original. The use of a copyrighted work may nevertheless be fair if, among other things, the use has a purpose and character that is sufficiently distinct from the original.

In this case, however, Goldsmith’s original photograph of Prince, and AWF’s copying use of that photograph in an image licensed to a special edition magazine devoted to Prince, share substantially the same purpose, and the use is of a commercial nature. AWF has offered no other persuasive justification for its unauthorized use of the photograph.”

But the Court did not reject all transformative uses. On the contrary, the decision emphasizes that truly transformative uses, or uses that fall under other fair use umbrellas, are alive and well.

“While our interpretation of the first fair-use factor does not favor the Foundation in this case, it may in others. If, for example, the Foundation had sought to display Mr. Warhol’s image of Prince in a nonprofit museum or a for-profit book commenting on 20th-century art, the purpose and character of that use might well point to fair use. But those cases are not this case.”

Relevance for Creators

So what does all this mean for creative people like you? Fundamentally, at least in my opinion, it’s good news for creatives. It means that if someone is going to be using your creative work to make something “new,” they’d better be sure of two things:

1. What they’re making is actually creating something new, not just a new version of the original work (or clearly falls into one of the fair use buckets of parody, commentary, or criticism)
2. The reason for their work isn’t the same reason the original work exists, and they’re not trying to compete with it in the same market for the same audience.

Really, those two considerations aren’t new at all, and this decision doesn’t really change the rules about transformative uses. What it does do is clarify that creators’ works are protected against people who make superficial changes, pronounce it a fair use, and then compete directly with the original work. (Obviously, the question of whether Warhol’s changes to Goldsmith’s photo were superficial or substantive is what this case is all about, and judges taking on the role of art critics is problematic. That’s why the four-step test and other analytical tools exist: to provide judges with legal tools for making subjective artistic judgments.)

And of course, nothing in this holding would prevent someone from seeking permission or licensing a creative work for a specific purpose. Copyright law has always permitted that. As the Court observed, “It will not impoverish our world to require AWF to pay Goldsmith a fraction of the proceeds from its reuse of her copyrighted work.” Nor does the decision stop anyone from creating a truly transformative new work based on an existing one—as long as it isn’t just a superficial change and as long as it doesn’t seek to replace the original in the same market. And finally, parody and criticism and scholarly uses are all still perfectly fair, and not limited at all by this decision. (Importantly, the Foundation never attempted to argue that Warhol was parodying or criticizing or commenting on Goldsmith’s photo. They simply argued that his addition of line tracings and color screens to a cropped version of the photo was enough to create a wholly new work.)

Prior to this decision, if you decided to draw a picture of Mickey Mouse that looked exactly like Disney’s copyrighted and trademarked image, and apply that image to t-shirts you sell in your store, you could not claim that the shirts are a transformative use, because Disney also sells t-shirts with Mickey Mouse on them.  However, if you were commenting on the current political battle in Florida between Disney and the state’s governor and drew a recognizable picture of Mickey in drag, you could argue that it was parody or criticism or commentary—which would make it a protected fair use. Neither of those scenarios are changed by the Warhol decision.

After this decision, nothing’s changed: it’s just a little more clear now that creating directly-competing commercial works based on someone else’s copyrighted stuff is unlikely to be considered a fair use—which, it seems to me, is a perfectly reasonable state of things.

The purpose of copyright in US law is stated clearly in the Constitution: “To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”[1] So the purpose of copyright is twofold: first, to incentivize creators by giving them a period of time in which to exclusively display, promote, and market their work. And second, copyright is intended to encourage creators to build on others’ work, by making that period of exclusivity limited—copyright isn’t forever, and works are constantly moving into the public domain, where they may be freely used to create new stuff.

While the Warhol decision is important, it is not the scary limitation on free expression that the dissenting opinion and some TV news analysts suggest. Rather, it’s just a clarification and reinforcement of the rights of creators to protect—and profit from—their own work, and a reminder that even famous artists have to play by the rules.

[1] US Constitution, Article I, Section 8

[2] This case was previewed by the author for the Craft Industry Alliance in “Fair Use” Explained: What’s Fair and What’s Foul? Nov 29, 2022. https://craftindustryalliance.org/fair-use-explained-whats-fair-and-whats-foul/

[3] https://www.supremecourt.gov/opinions/22pdf/21-869_87ad.pdf.