Update: Following SCOTUS Decision in Google, 2CA’s Decision in Warhol Case Stands
Earlier this year, we wrote about the Second Circuit’s March 2021 fair use opinion in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith. The Second Circuit held that the artist’s foundation committed copyright infringement when it commercially licensed the reproduction of one of Andy Warhol’s works (a portrait of recording artist Prince) as a magazine cover. In an effort to overturn the decision, the foundation filed with the Second Circuit a petition for panel rehearing and rehearing en banc (a review of an appellate decision by the Second Circuit, which is rarely granted). The foundation argued that the Second Circuit’s opinion was irreconcilable with the Supreme Court’s April 5, 2021 decision in Google LLC v. Oracle America, Inc., which held that the defendant’s line-for line copying of the plaintiff’s software code was fair use because it was for a socially constructive, distinct purpose – the creation of an innovative alternative to the original product.
On August 24, the same three-judge panel of the Second Circuit that issued the March opinion granted the foundation’s petition in order to amend the opinion to address Google, reaching the same conclusion. According to the amended opinion (written by Judge Lynch): “Apart from its reliance on the Google opinion, the petition mostly recycles arguments already made and rejected, and requires little comment.” Nevertheless, the court granted a rehearing without the need for further oral argument and amended its opinion “in order to carefully consider the Supreme Court’s most recent teaching on fair use” (i.e., the Google opinion).
The amended opinion tweaks the prior opinion (Judge Sullivan’s concurring opinion was withdrawn, and case citations were updated to cite Google and other binding authority); Judge Jacobs’ concurring opinion was tweaked to address Google. Below, we highlight four revisions to the decision.
First, the foundation argued in its petition that Google “comprehensively refutes the panel’s reasoning.” The Second Circuit “emphatically reject[ed]” that assertion, finding that Google dealt with the unusual context where the copyrighted material in question was software code, which (unlike art) is utilitarian in nature. Thus, per the Second Circuit, the Supreme Court’s finding of fair use in Google was fact- and context-specific, and did not represent a shift in the application of traditional copyright concepts to artistic works.
Second, the Second Circuit rejected the foundation’s argument that the court “effectively outlaw[ed]” an entire “genre” of art that is “widely viewed as one of the great artistic innovations of the modern era.” The court stated that:
[I]t is not the function of judges to decide the meaning and value of art . . still less to “outlaw’” types of art. We merely insist that, just as artists must pay for their paint, canvas, neon tubes, marble, film, or digital cameras, if they choose to incorporate the existing copyrighted expression of other artists in ways that draw their purpose and character from that work (as by using a copyrighted portrait of a person to create another portrait of the same person, recognizably derived from the copyrighted portrait, so that someone seeking a portrait of that person might interchangeably use either one), they must pay for that material as well.
Third, in its analysis of the first fair use factor (the purpose and character of the use), the Second Circuit added a footnote distinguishing the case before it from the Supreme Court’s veiled reference to works such as Warhol’s Campbell’s soup cans in Google. The Supreme Court stated that an “’artistic painting’ might, for example, fall within the scope of fair use even though it precisely replicates a copyrighted ‘advertising logo to make a comment about consumerism’.” The Warhol court stated: “The fact that the Goldsmith Photograph and the Prince Series were both created for artistic purposes makes this a different case from, for example . . . Warhol’s well-known depictions of Campbell’s soup cans. . . , which “might . . . fall within the scope of fair use.”
Fourth, in analyzing the fourth fair use factor (the effect of the use on the market for the original), the Second Circuit considered and rejected the foundation’s claim that Google’s emphasis on the potential public benefit the copying may produce required a finding of non-infringement. The foundation argued that a finding of infringement in the case will have a chilling effect on other artists. Per the court, while the Copyright Act does permit a court to impose significant penalties for infringement (e.g., prohibiting the public display of a work, and permitting its impoundment or destruction), Goldsmith was not seeking those remedies in this case. Importantly, the Second Circuit emphasized that the infringement in question was not the artwork’s creation, but the foundation’s commercial licensing of the work:
Moreover, what encroaches on Goldsmith’s market is [the Foundation's] commercial licensing of the Prince Series, not Warhol’s original creation. Thus, art that is not turned into a commercial replica of its source material, and that otherwise occupies a separate primary market, has significantly more “breathing space” than the commercial licensing of the Prince Series.
On September 10, the Second Circuit issued an order stating that “[t]he active members of the Court have considered [the Foundation’s] request for rehearing en banc” and that the request is denied.
Take-Away Points
Per the Second Circuit, Google did not significantly alter the traditional fair use analysis that has applied to artistic works. Whether other circuits will agree with the Second Circuit’s interpretation of Google remains to be seen. For now, here are some take-away points for creatives and their advisors to keep in mind:
1) For those that worry that the decision imposes a significant curtailment on rights with respect to the physical Warhol artworks, there is no need to worry (at least for now). The Second Circuit did not find that the Prince Series artworks infringed Goldsmith’s copyright in her photograph of Prince. Goldsmith did not seek such a ruling, and the court did not decide that issue. The only act of infringement was the commercial licensing of the artwork on a magazine cover, and the Second Circuit’s amended opinion added language about the additional “breathing space” such original works might have (as discussed above). Judge Jacobs’ concurring opinion addresses this point:
As the opinion observes, the photograph and the original Prince Series works have distinct markets. . . They are not “substitutes.” . . . . An original work of art is marked by the hand or signature of the artist, which is a preponderating factor in its value. But when a work is reproduced, it loses that mystique, as anyone who has browsed a gift shop can appreciate.
2) The Warhol and Google opinions state that artworks that contain exact replicas of underlying source material can be fair use. Taking the Campbell’s soup can reference as an example, an artist may well be able to take a copyrighted logo intended for advertising use and incorporate the logo into an artwork to comment about consumerism without infringing on the logo because the underlying purpose of the two works differ.
