Second Circuit Finds Warhol Artwork of Prince Infringing: Drawing a Line Between Infringing Derivative Works and Transformative Fair Use with Appropriation Art

By Elizabeth Altman

Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 992 F.3d 99 (2d Cir.), opinion withdrawn and superseded on reh’g sub nom. Andy Warhol Found. for Visual Arts, Inc. v. Goldsmith, 11 F.4th 26 (2d Cir. 2021)

The Second Circuit recently upheld its earlier March 26 decision in Warhol v. Goldsmith, following the recent Supreme Court decision in Oracle v. Google.  The Warhol estate had asked for a rehearing after Oracle, which marked the Supreme Court’s first fair use foray in over 25 years, specifying that Google’s copying of Oracle’s Java API code to develop its Android mobile operating systems was fair use. Ultimately, however, and notwithstanding the Estate’s attempt to frame Oracle as broadening the scope of transformative use, the Warhol results remained unchanged. The Second Circuit affirmed its holding that artist Andy Warhol’s famed Prince series, based on a photograph by Lynn Goldsmith, was not fair use, limiting the Oracle decision to cases involving software code, particularly considering that code serves a utilitarian, not artistic, function. Reiterating its application of the four fair use factors, the court found Warhol’s use of Goldsmith’s photograph an infringing derivative work rather than a transformative fair use.

The Warhol dispute itself centered around a 16-work series by Warhol—silkscreen prints and pencil illustrations—which he based on Goldsmith’s 1981 black-and-white photographic portrait of Prince. Goldsmith, who had originally licensed the photo to Vanity Fair for use as an artist reference, was apparently unaware for decades that the artist behind the subsequent work was the famed Warhol. Further, Warhol had exceeded the intended scope of the license, creating not just one image, as he was commissioned to do by the magazine, but 15 additional ones, that became his well-known Prince series.

Goldsmith first learned of the series following Prince’s death in 2016, and notified the Andy Warhol Foundation for the Visual Arts, Inc. (“AWF”) that she believed it violated her copyright in the original photograph. Seeking to ward off prospective litigation, AWF initiated a suit against Goldsmith’s studio for a declaratory judgment that Warhol’s works were non-infringing, or alternatively a fair use. Goldsmith countersued for infringement.

The case had a few twists and turns as it first passed through the Southern District of New York, which held that it was “plain” that Warhol’s series was protected by fair use. Driving this decision was the court’s finding that under the first fair use factor, which addresses the purpose and character of the secondary artist’s use, Warhol’s use had been transformative, changing the character of the original image by “transform[ing] Prince from a vulnerable, uncomfortable person to an iconic, larger-than-life figure.” This finding in turn swayed the remaining second and third factors, addressing the nature of the work and the amount of the work used, and as to the fourth, which addressed the potential for market harm for the original, the court believed that Warhol’s art and Goldsmith’s prints operated in separate markets that would not affect each other.

The Second Circuit’s reversal marked a departure from both this holding and its own precedent on transformativeness with respect to appropriation art, particularly from its 2013 ruling in the Cariou v. Prince, which had addressed another famous artist’s—Richard Prince’s—alteration of a photographer’s work, finding it to be transformative and fair use.Although the Second Circuit took pains to note that it would remain bound by Cariou as precedent, it did single out the decision, seeking to clarify—and for all intents and purposes gut—the case’s application of transformativeness with respect to appropriation art.

Transformativeness derives from an earlier a Supreme Court decision, Campbell v. Acuff-Rose Music, Inc.,and directs courts to examine the degree to which a secondary work transforms the original, imbuing it with a new meaning or message, or a further purpose or different character. Courts consider whether a work is transformative by how it may be reasonably perceived. Works that are found to be transformative often sway the first factor towards a fair use finding. The Second Circuit’s particular concern over the application of Cariou’s transformativeness approach was that the Southern District had read it to support a rule that any secondary work is transformative if, compared with the original, it displays a different character, new expression, or employs new aesthetics with creative, communicative results. However, just because a secondary work adds new expression or aesthetics, does not necessarily mean it has transformed the original, cautioned the court. Where the work “does not obviously comment on or relate back to the original or use the original for a purpose other than that for which it was created,” it should not be deemed transformative. The court compared the works deemed to be fair use in Cariou with the ones that could not be determined to be fair use as a matter of law and noted that those that were considered fair use were more collage-like and consisted of many elements, in contrast to works in which the artist had only added a few elements to the photograph, which were remanded to the district court.

In the case at hand, conceivably, any photograph of Prince would have sufficed to meet Warhol’s purposes, not merely Goldsmith’s particular work, and as such, the court declined to treat his output as more than a derivative work, for which he would owe a licensing fee. Notwithstanding the fact that a derivative work will likely look at least somewhat dissimilar or altered when compared to the original, because Warhol had not undertaken the alterations to comment on the underlying work, it could not qualify as transformative, which the court stressed requires much more in the context of appropriation art to qualify as fair use, so as not to deprive the original creator of their owed license.

Revisiting the first factor analysis, the Second Circuit held that the purpose and function of the two works in Warhol was one and the same, as both were works of visual arts that portrayed Prince. Any deviations Warhol made to imbue the print with his signature style did not transform the work in the fair use sense of the term, but merely adapted it by removing some of the image’s depth and heightening its contrast with loud, unnatural colors. The photograph remained the recognizable foundation of the work. The amended decision did note, however, that in the context of visual artworks, purpose is “perhaps a less useful metric” considering both the original and secondary work take as their purpose the aim of serving as visual art. The deciding factor, the court advised, was a comparison of the secondary work with the source material. In Cariou, for example, fair use arose for those works that were most collage-like and most rendered the original unrecognizable. The main test, therefore, is whether the secondary work’s use of the source material serves a fundamentally different and new purpose and character, rendering the work unique from its raw material. It is not enough, as in Warhol, for an artist to merely impose his style on the primary work, leaving the essential elements of both intact. While such an undertaking may serve as an adaptation or derivative, it is not transformative.

Further, it would not suffice to allow Warhol a “hall pass” merely because the work he created was immediately recognizable as a “Warhol,” as such a standard risks creating a “celebrity-plagiarist” loophole, where, in actuality, Warhol had the same responsibility to license the original as any less famous artist. Nor would it suffice for the artist to merely state that the series was transformative, or for the court to discern such intent.  

As to the second and third factors, which typically hold less sway in the overall analysis, the court, with the blinder of transformativeness removed, found that the amount and substantiality of the portion used strongly favored Goldsmith, considering that Warhol had copied the photo wholesale. Diverging again, from the district court’s view, the Second Circuit believed it irrelevant that Warhol had made certain alterations, like cropping and flattening the photo. And, contrary to the district court’s view of the fourth factor’s effect on the market for the original, the Second Circuit did believe that the series could threaten Goldsmith’s licensing markets, considering that fair use examines potential, as well as existing markets. The court believed the works shared the same secondary licensing markets, as both appealed to magazines and other publications providing content relating to Prince. This emphasis on the fourth factor further departed from Cariou, which had placed the greatest weight on the transformativeness analysis; in giving the fourth factor its fair due, the Second Circuit joined the growing number of courts reemphasizing the fourth fair use factor as primary, or at the very least, not a factor to be subsumed into shadow of transformativeness.

Overall, the key Warhol lesson that artists should take away is to be aware that courts have grown less inclined to permit fair use to safeguard wholesale copying, or appropriation, where a new work does not truly transform the original by incorporating a new message, even if visual elements of the original have been substantially modified. In cases where the second work does not comment directly on the original, as in Warhol where the works remain visually substantially similar, fair use is less of a given, and the work will instead likely be deemed derivative. Although Warhol’s use of photographs aimed to effect social commentary, the Second Circuit now requires appropriation art to actually change the underlying work (if not commenting on the underlying work), which disfavors conceptual art that comments more broadly on society, such as Warhol’s commentary on celebrity icons with his series on Marilyn Monroe, versus collage artists such as Richard Prince who combine many elements of published works. Since the selection of the underlying image was not relevant to Warhol, he could have licensed any photograph of Prince’s image to use as a derivative work. Although Cariou remains good law, its approach to transformativeness no longer applies; instead, the burden of showing transformativeness is now set at a higher bar. It’s also possible that other photographers will see this case as an open door to bring suit, where the statute of limitations allows, against artists, even Warhol, who arguably applied a light hand in creating secondary works from their material. Yet, it’s important to remember that, for better or worse, fair use cases tend to be very contextual, and may depend on the type of work infringed, as demonstrated by the Second Circuit’s refusal to apply Oracle’s holding on code to appropriation art. Finally, as discussed in the latest Warhol decision’s concurrence, although galleries, art dealers, and museums that acquired the appropriation art should not be affected by the case (i.e., they would not owe damages or royalties to plaintiff), its holding may apply to entities like magazines, that commercially license the work. This is so because, as the concurrence observed, Warhol’s series and Goldsmith’s photograph shared overlapping licensing markets owing to their similar expressive capacity as Prince portraiture.