Fair Use and Andy Warhol: The Line Between Appropriation, Copying, and Inspiration Is Not Clear

Katie and Steve finally tackle the evolving area of fair use as a defense to copyright infringement with Luke Nikas, attorney for the Andy Warhol Foundation and Partner at Quinn Emanuel.  Luke represents the Foundation in its ongoing litigation with photographer Lynn Goldsmith about Warhol’s use of Goldsmith’s photograph of the artist Prince as an artist study for a series of screen prints.  Goldsmith claims Warhol infringed her copyright in the original photograph.  The Warhol Foundation says Warhol’s use of the photograph is fair use under the Copyright Act.  The trial court agreed with the Warhol Foundation and the Second Circuit recently agreed with Goldsmith.  Katie, Steve, and Luke discuss this complicated area of law and how artists navigate (or don’t) around it.


Andy Warhol Foundation for the Visual Arts Inc v. Goldsmith – District Court Decision


Second Circuit – Brief of Appellants, Goldsmith

Second Circuit – Brief of Appellee, Andy Warhol Foundation for the Visual Arts

Andy Warhol Foundation for the Visual Arts Inc v. Goldsmith – Second Circuit Decision

Andy Warhol Foundation for the Visual Arts Inc – Cert Petition

Episode Transcription

Steve Schindler:  Hi, I’m Steve Schindler.

Katie Wilson-Milne:  I’m Katie Wilson-Milne.   

Steve Schindler:  Welcome to the Art Law Podcast, a monthly podcast exploring the places where art intersects with and interferes with the law.

Katie Wilson-Milne:  The Art Law Podcast is sponsored by the law firm of Schindler Cohen & Hochman, LLP, a premier litigation and art law boutique in New York City.

Hi, Steve.

Steve Schindler:  Hey, Katie.  Well, we have an interesting situation here, don’t we?

Katie Wilson-Milne:  Yes, we recorded a great episode, which listeners you will hear in just a few moments, with Luke Nikas, who is the lawyer for the Warhol Foundation.  We discussed an extremely interesting and relevant case about the boundaries of fair use in dealing with fine art.  And the day after we recorded that interview the Second Circuit came down with a quite significant decision in the case that was the subject of our interview.

So, just want to be upfront with our listeners that we recorded this before the decision came down, again the day before the decision came down, so that is why we do not acknowledge the outcome of the case.  But we will do so at the end of the episode, we will fill everyone in on what the Second Circuit decided and what we think will happen next.

Steve Schindler:  Hi, Katie.

Katie Wilson-Milne:  Hi, Steve.  So at long last, we’re going to discuss the fair use doctrine.

Steve Schindler:  We have been talking about doing this since we started the podcast, and we’ve just been waiting for the right opportunity to do it.  I think we have it here today.  We’re going to be joined by Luke Nikas.  Luke is a partner at the law firm of Quinn Emanuel located in New York City.  Luke is a distinguished litigator and trial lawyer in complex commercial disputes as well as in the art space.  He’s the co-chair of his firm’s art litigation and dispute practice and has long represented the Andy Warhol Foundation in a number of lawsuits, one of which we will be discussing with him today.  Luke has also represented Ann Freedman, the former president of the Knoedler Gallery in a series of lawsuits and investigations arising from the sale of 60 forged works of art worth approximately $80 million, which were attributed to abstract expressionists artists such as Jackson Pollock, Mark Rothko, Robert Motherwell, and Willem de Kooning.

And when it was discovered that these works were painted by a Chinese immigrant in his garage in Queens, this storied gallery shuttered practically overnight.  But in addition to being a talented litigator, Luke has recently made his debut on the screen in a recently released documentary about the Knoedler case called Made You Look: A True Story About Fake Art.  And we recommend the movie to those of you who haven’t seen it.

So Luke joins us today to talk about copyright infringement and the defense of fair use in the context of his representation of the Andy Warhol Foundation in its lawsuit against Lynn Goldsmith, a photographer.  This case was brought to determine whether Andy Warhol’s artistic works, depicting the music artist Prince, infringed on Ms.  Goldsmith’s photograph of Prince or whether these works made fair use of the photograph.

The Foundation won the case at the district court level where Judge Koeltl ruled that the Warhol works made fair use of the Goldsmith photograph.  Ms.  Goldsmith appealed, and an argument was heard by the Second Circuit Court of Appeals on September 15, 2020.  The parties are now awaiting that court’s decision.  So Luke, welcome to the podcast.

Luke Nikas:  Thanks, it’s good to be here and talk with both of you.

Steve Schindler:  Well, Luke, perhaps you could start out by just giving our listeners a synopsis of the facts leading up to the Warhol v.  Goldsmith lawsuit.

Luke Nikas:  Sure.  So I’ll start when we first were approached by Goldsmith and then work back to 1981 and take you quickly through the story, because we learned it in that order as well.  2016 the Foundation got an email from Lynn Goldsmith.  She said, “I’ve seen the publication of a photograph of Prince that was used in an artwork.  I knew it was my photograph when I saw it.  I didn’t know it had ever been used by Andy Warhol to make a celebrity portrait of Prince.  This is an infringement.  I want to talk to somebody at the Foundation about this.  Please reach out to me.”

So we take a look at the email, and we had absolutely no idea what she was talking about.  We weren’t aware of the reference image that Warhol had used to create the celebrity portrait.  We weren’t aware of the 1984 Vanity Fair article that the work appeared in.  We really didn’t know anything at all at that point.  The Foundation reached back out to her and said, “Thanks for the message.  We’d like to understand more information about this.  Please send us what you have.” We didn’t hear anything back from Ms.  Goldsmith.

Instead we heard back from a lawyer that she had hired to represent her related to the issue.  And the Foundation contacted her and said, “We’re now hearing from a lawyer.  We want to understand what’s going on.  We want to talk about this with you.  Do you really think we need to push it to lawyers already?” And she said, “Once I put something in my lawyer’s hands, I can’t take it back.  So the lawyers are going to now have to deal with each other.” And so we spoke with the lawyer first and the lawyer provided a little bit of background and made a seven figure settlement demand.

And so we knew pretty quickly this was going to go sideways, but we tried to get it back on track and tried to understand what was actually happening here.  We learned that in 1981, Lynn Goldsmith had taken a photograph of Prince, or series of photographs of Prince in concert in New York City.  And the next day, Prince had agreed to go to her studio in New York to sit for some portraits.  He went to the studio, he went there exactly as he appeared in the photograph with some immaterial differences, like he had a little scarf that he took from Goldsmith’s dressing room.

But his hair was the same, the makeup was basically the same with minor changes, the clothes were the same.  And he sat and he was very uncomfortable.  He didn’t want to be there.  He was nervous, scared.  Goldsmith took a handful of photographs and then he went into the dressing room, shut the door, and Goldsmith tried to delicately coax him out and he decided to leave.  No more pictures.  Fast forward three years, 1984, Vanity Fair somehow some way reached out to Warhol.  We don’t know how.  We have no records of this whatsoever.  No contracts, no documents, obviously no emails in 1984.

And Warhol somehow, some way got one of the images Goldsmith took of Prince.  He created a series of 16 works that are the works at issue in the case: some paintings, some sketches, some prints.  And ultimately one of them went in the Vanity Fair magazine about Prince, where there was an article entitled “Purple Fame.”  And that was the end of the 1984 saga.  Fast-forward to Prince’s death in 2016, Vanity Fair reached out to the Foundation, wanted to put one of the works on the cover of the Vanity Fair‘s commemorative edition commemorating Prince’s life.  It went on the cover, and ultimately that’s what Goldsmith saw.  Settlement discussions completely broke down and we decided that the best way to get clarity in what was clearly going to be a litigation, we thought, filed by Lynn Goldsmith.  We filed a declaratory judgment action in the Southern District asking the court to declare that Warhol had made fair use of Goldsmith’s photograph.

Katie Wilson-Milne:  So Luke, just for our audience, what is the Andy Warhol Foundation?

Luke Nikas:  The Andy Warhol Foundation was established shortly after Andy Warhol died.  In Andy Warhol’s will he required, with very few exceptions, some minor bequests to family, that all of his assets be used to create a foundation that would advance the visual arts.  And so beginning shortly after his death to the present, the Andy Warhol Foundation has used the assets given by Warhol, the art, the cash he had, to support visual arts.  It does it through grants to individual arts foundations, it does fellowships.  It’s an extraordinary foundation that really, across the country and the world, seeks to support artists, seeks to support communing of artist, education for artists.  It’s a nonprofit that’s been in existence to do that for several decades.

Katie Wilson-Milne:  You said the Foundation brought this lawsuit affirmatively, but the lawsuit is in essence defensive.  You know, what was the thinking between waiting for Goldsmith to sue or not sue and just going ahead and jumping in?

Luke Nikas:  There are really two issues.  One is we wanted to make sure that we could frame the dispute exactly as we wanted to.  We wanted to make sure that the court understood from the initial pleading what we were arguing, what the background facts were.  We wanted to make sure that we ended up in a court we thought had the most developed law of fair use.  Now, Goldsmith is from Colorado.  I have a lot of respect for the Tenth Circuit, but their fair use law is not as developed as it is in the Second Circuit.  And so we wanted to make sure we had a court that had addressed these kinds of issues in a way where we thought there’d be some predictability in the outcome, as much as that can be so in any court case.

Katie Wilson-Milne:  Luke, so the district court decides in the Foundation’s favor on fair use and then Goldsmith appeals that decision on fair use to the Second Circuit.  Is it correct that the only issue now is whether there’s a fair use or not?  There’s nothing lingering on infringement, because the district court didn’t hold that, or is that something that’s still in play?

Luke Nikas:  That’s still in play.  The district court said it didn’t need to consider infringement, because it could get right to the fair use defense and it found that there was a fair use.  Goldsmith appealed, and in our opposition brief we argued that, number one, the district court made a proper decision.  There was in fact a fair use.  And number two, the second circuit can also find in our favor based on the record below on substantial similarity.

And we had an amicus brief filed where a group of law professors that was led by Rebecca Tushnet argued that, in fact, not only can the court rule on substantial similarity as an alternative grounds for affirmance, but it should, because ultimately that’s an easier path and a clearer path to getting to the end outcome in this case.

Katie Wilson-Milne:  And yet all the attention still seems to be on fair use.  And my, you know, impression of the oral argument is that nobody was interested in substantial similarity, at least for that 20 minutes, so.

Luke Nikas:  The oral argument was mostly questions, almost every single question by Judge Lynch.  There were only a couple of questions by the other two judges, and they weren’t sort of substantive to these core points.  Judge Lynch struggled, I think, with the appearance of the two works.  You look at one, you look at the other, there’s Prince, they’re similar, and from that flowed the questions that dominated the entire 20 minutes.

And so I don’t know whether the other two judges had decided anything on substantial similarity.  I don’t know if they are weighing that route to a decision, one way or the other.  I don’t know, frankly, whether Judge Lynch had a view of substantial similarity.  It was clear that that complexity of the argument, the complexity of the case was all bound up in the fair use issues, which perhaps goes back to the initial point, which is we can make this a lot clearer if we avoided those issues and dealt with substantial similarity in the first instance.

So the issue is definitely before the court.  The other thing to consider is that we put in two experts in the district court.  We had Laura Paulson and we had Thomas Crow from NYU, both of whom explained in detail a number of different points that went directly to market, that went directly to transformative use.  And we also had Neil Prince of the Warhol Foundation give an affidavit, because ultimately he was speaking for the party in the case, and say, you know, this is our belief, this is our understanding of why Warhol did what he did.

And Judge Koeltl said, I don’t need to consider any of that.  I don’t need to consider any experts whatsoever.  I’m going to rely solely on the fact testimony and the briefing to find fair use.  And so one of the points we made to the second circuit was, if you think you’re going to rule on the transformative nature of this, you shouldn’t.  If you’re going to rule against us, you need to send this back to the district court so that we can argue to the district court that there’s a lot of evidence here that should be factored in.  And in our view, expert testimony of this kind is appropriate to consider.

Katie Wilson-Milne:  That is so peculiar that in a, we’ll go over what the fair use factors are in just a minute, but in a standard that weighs the purpose and character of a work of fine art, which is perhaps something we all instinctively feel judges are not necessarily equipped or expert to do, and that weighs the market impact of artistic behavior, that experts wouldn’t be necessary.  I don’t know how any just facts on paper provided by parties could provide that.  But let’s take a step back, Luke.  So for good or bad the fair use aspect of this case, and I think we’ve seen this in other cases that we’ve been talking about already today, is drawing the most attention because it’s the most complex.  It’s also the most flexible, and it lets the court kind of do it at once in a variety of ways.  So what is fair use and what are the factors of a fair use defense that a litigant needs to bring forth?

Luke Nikas:  Sure.  So the fair use defense is a statutory defense.  It’s built into the Copyright Act and it has four factors.  The first factor asks the question of whether the artist’s second work, you know the artist who’s claimed to have infringed, made a transformative use of the original work.  And what does that mean?  Courts look at whether the purpose or character of the artist’s work are the same as the artists whose work they’re alleged to have infringed.  Does it have a different meaning?  Does it have a different message?

Is the expression of the work the same?  Comparing the one to the other?  That’s the first factor.  The second factor is the commercial nature of the use.  And so ultimately if you’re—the point of the Copyright Act is to protect the economic markets of artists who create.  And if you’re using it in a commercial way, i.e. to sell goods, to communicate an advertising message, then the courts are more likely to find infringement, that’s going to weigh in favor of infringement and no fair use, then if you’re using it for scholarly purposes.  So that’s the second factor.  The second factor rarely plays any role in the analysis of fair use.  The third factor is whether the second work substantially takes from the original work.  That’s the essence of it.  You look at how much in the second work was taken from the first and then you also assess whether what was taken was sort of necessary or appropriate for the purpose of the second work.

And so, for example, let’s say you’re going to depict a celebrity and you’re going to comment on, you know, celebrity culture and consumerism.  Ultimately you need to depict the whole celebrity.  Because if you just take Marilyn Monroe’s ear and you use it in your second work no one’s going to have any idea that’s Marilyn Monroe’s ear.  And so sometimes it’s okay to take the whole of the original work, you know, a substantial part of it, if that is appropriate for the purpose of your work.  But ultimately you weigh those two issues.  How much was taken and was what was taken necessary for the ultimate aim of the second work?  That’s the third factor.

The fourth factor is the market analysis.  Does the work that is at issue, the allegedly infringing work, does it usurp or take from the market of the original artist?  And that’s where courts look at the primary market.  So if you’ve got a photograph and the photograph, you look at original sales of those photographs, do they sell into the same primary markets?

And that’s the primary focus of the analysis.  But courts also look at what are called derivative markets, I think better known as licensing markets, where you look to see how the images are licensed for use outside of the primary sale.  So you might sell the photograph to a collector who hangs it on the wall but then you might use the image of the photograph in a magazine or on a skateboard, products, et cetera.  And courts will look at that secondary or derivative market as well to see whether the second work is taking from the derivative market of the first.

So those are the four factors of fair use.  Courts have primarily looked at the first and the fourth.

Steve Schindler:  And just to take one step back, Luke because, the whole reason that we have this defense of fair use, right, is that going back to the U.S. Constitution, right, the authority of Congress to pass copyright protection laws was to promote the progress of the arts, to provide for the sort of public consumption of the arts.

And while we give artists a limited monopoly on their works under certain circumstances, the Constitution and the Copyright Act also seek to allow the public and artists to build on those works to promote the progress of the arts and to promote criticism, to promote referencing, and now in many cases, appropriation art.  And that’s really why we have this defense of fair use and these factors that we’ve been discussing.

Luke Nikas:  I would look in two places.  That’s certainly the first, Article I of the Constitution, the Copyright Clause, and that’s the core point we made in this case, which is you need to ask yourself whether you want a world in which Andy Warhol exists.  Do you want to promote the arts?  Do you want to ensure that artists build on each other and create additive works that contribute in some way to culture?

So that’s exactly the point you’re making, Steve.  The second point, I always go to the First Amendment as well in the fair use context, because ultimately what we’re talking about here is whether the work by Andy Warhol in this instance gives some expression, uses something in the world and takes it and transforms it into a new meaning, a new expression about the world.

And if we said, look Andy Warhol, you’re not allowed to comment on society, on consumerism, on advertising, on manufactured fame in this way, then what we’re telling him is your speech through the visual arts is restricted in a way we should be concerned about given the First Amendment.

Katie Wilson-Milne:  Maybe tell us now a little bit about the legal bases for your declaratory judgment action.  And you know, it’s not just fair use, right?  It was also—there’s a copyright infringement component and then there is the bringing the defense forward at the outset, which is separate.  Although I think, you know, in talking about this case and reading about this case fair use is the issue that everyone thinks it turns on, but it’s not the only issue that you raised in your complaint.

Luke Nikas:  Absolutely right.  So there were two issues we raised, distinct legally, distinct in the arguments.  There’s some overlap between them conceptually, which we can talk about.  But when we looked at the photograph and we looked at the artwork, the first question any court needs to address is whether the plaintiff, which would be Goldsmith in the copyright infringement sense, even though we were the ones who filed the action, whether the plaintiff can prove infringement.

In other words, did the secondary use copy the first in a way that’s substantially similar?  Only when you prove infringement do you then get to the fair use defense.  And so when I looked at the works by Warhol and I looked at the photograph, you know, we all look at them and say, “Yeah, they look similar,” right?  There’s Prince in one and there’s Prince in the other.  But to prove infringement you have to show substantial similarity.

And when I looked at what the core of the photograph was, you know, the lighting, the shading, the depth of field, the pose, all of the elements of a photograph that are protectable, it was clear that Warhol had stripped them all out.  And so I wanted to make it easy for the court.  I wanted to present a concrete issue.  Judge, there’s no infringement at all, because the Warhol is not substantially similar to the Goldsmith.

You don’t need to get to the fair use defense.  You don’t need to get to balancing.  You don’t need to weigh into those tricky issues that Cariou caused that have been addressed by Judge Easterbrook and the Seventh Circuit in the Kienitz case.  It’s not that complicated.  You can resolve it straight shot with infringement because there is none.

So that was the first issue that we presented.  And, you know, ultimately we’ve got scholarly support for that argument in the Second Circuit and some very good case law.  The second was fair use, if you don’t accept that the works are not substantially similar, if you think they are substantially similar, judge, and you think that there’s been a showing of infringement, then you get can into the balancing.  And in our view, Warhol made fair use of the photograph, and therefore, we have a complete defense to the claims of copyright infringement, two distinct claims.  We put both of them in to the declaratory judgment complaint.

Katie Wilson-Milne:  But let’s talk maybe first about what the district court did with those two claims, because I find it—especially, you know, hearing you describe, which is my instinct too, which is, you know, we have this kind of predicate easy issue, easier issue at least, legally, which is infringement.  There’s an opportunity to deal with this just on that basis and not wade into fair use, you know, further complicate the case law, create new tests, which is what we see happening in the second circuit over time.

And yet judge Koeltl does the opposite, right?  He says, you know what, actually, I’m not interested in infringement.  I’m not going to weigh in on it.  I’m going to jump right to fair use and analyze these four complicated factors, which obviously people are going to have strong feelings about.  So maybe tell us about that holding, and you know, what I see as just a sort of an interesting favoritism to deal with fair use over infringement.

Luke Nikas:  The substantial similarity test is one we felt strongly about.  We didn’t just throw it into the declaratory judgment complaint in our summary judgment motion to preserve the issue for appeal.  We really thought it gave the judge a clear path.  And the standard is so clear in terms of what you’re looking at and what you’re doing that we thought he might bite.

In the oral argument we spent maybe 20, 25 minutes talking back and forth about substantial similarity.  And in essence what I said was we look at the photograph, and you go back to the 1800s, 1884, the Burrow-Giles decision, and you ask yourself when the object of the photograph doesn’t owe itself to the photographer, like the appearance of a person, you need to look at what is protectable beyond that in the photograph itself.  You look at the lighting, the shading, the depth of field.  You look at the combination of creative decisions that the photographer made to create the photograph itself.  And judge, when you do that here, you look at the lighting, the shading, the depth of field, all of that in the Goldsmith, and you compare it to what’s left in the Warhol, it’s all gone.  The lighting choices, gone.

Steve Schindler:  Luke, the Kienitz case that you referenced in the Seventh Circuit and Judge Easterbrook, that’s exactly the same set of facts that the Seventh Circuit was looking at.  And what I always found sort of interesting about that case was that the Seventh Circuit sort of poo-pooed the Second Circuit’s fair use decisions, but decided the case in favor of the alleged infringer in that case based on the lack of substantial similarity for the very same reasons that you are outlining.

Luke Nikas:  And the irony there is that they did it under the third prong of the fair use test instead of the substantial similarity doctrine under infringement, even though it was exactly the same analysis.  And so the Kienitz case was spot on.  We cited that to Judge Koeltl and we said, this analysis is analogous to what you need to do on infringement.  You strip out the unprotectable, you look at what’s protectable and you compare the Warhol and the Goldsmith, and it’s clear we win.  And Goldsmith had no response to that.

In fact, in the Second Circuit her response to Kienitz was well Kienitz is distinguishable factually, because the photographer’s picture of the mayor of Madison, Wisconsin, that was posted on the internet, from which the artist took the image, had none of the detail and therefore the artist who used it to screen the t-shirt couldn’t have taken the detail of the photograph.

And that’s different here.  Goldsmith’s high resolution photograph was made available to Warhol.  So these cases are different.  To which I say, well, that only further confirms that Warhol made fair use or is not substantially similar, because Warhol had the opportunity to take all that high resolution detail and yet he didn’t.  And so that illustrates even a starker contrast from the artist in the Kienitz case who didn’t have that choice to take the detail, but didn’t.  He had to take what he had, which was a lower resolution photo.  And so Kienitz was directly on point.  We argued that to Judge Koeltl and said the substantial similarity analysis avoids all those problems.  The reaction from Judge Koeltl was basically, “but there’s copying.”  This picture was in essence photographed through Warhol’s process.

And there was an identical copy of the photograph made in the artistic process that Warhol used to get to the final image.  And therefore there was copying.  And of course we pushed back and said, yes, there was copying, but the question is twofold.  Whether there’s copying and then whether it’s substantially similar.  The example I gave in the oral argument was if you copied Marilyn Monroe’s ear and you stuck it on another work that Warhol made, you know, yes, there’s copying but it’s not substantially similar.  Because the end product is completely different from the photograph even though it has a copy of something from it.  And we kept on going back and forth on that, talking past each other and Judge Koeltl finally said, “Sometimes lawyers just make arguments because they’re interesting.  How about we just get the fair use.  I really want to hear you on fair use.”

Katie Wilson-Milne:  Why is that?  Why did he want to skip past this?  And what you’re saying also highlights, you know, what I think is really becoming a confusing set of doctrines in that there is an overlap now with how we use fair use and also how we talk about infringement.  And instead of fair use really being a defense in situations that, you know, were traditionally about parody or news or, you know, just sort of the classic examples,  we’re now seeing it as a real tool around dealing with infringements.  And Koeltl’s decision to me seems to highlight that, and so does the back and forth you’re talking about.

Luke Nikas:  I think the issue is the way in which we talk about these doctrines.  So we use the word in the fair use test “transformative.”  Is the second word transformative?  Did it transform the initial image into something new and distinct?  And that concept that the court has said is just a word to reflect a complex sort of bundle of ideas, creates a lot of the problems you’re talking about.  What does it mean to be transformative?

I think the same problem happens in the infringement analysis when you ask yourself what does substantial similarity mean?  If you go out in the world and you put the Warhol next to the Goldsmith and say are these substantially similar, you’d get all kinds of different answers because they do look similar, right?  That’s a portrait of Prince, looking at the Goldsmith.  That’s a portrait of Prince, looking at the Warhol.

How do we tell the difference?  And that’s, I think, the struggle in cases like this.  They do look really similar.  But then you have to ask yourself, and this is what I think the district court did only in the fair use test, not in the substantial similarity test, and what the Second Circuit, at least one of the judges, the only one who asks the questions was struggling with: why do you think they look substantially similar?  Do you think they look substantially similar, because they both have Prince in them and Prince looks the same in both, i.e.  you can identify the person as Prince?  Or do you think they look substantially similar, because the creative choices the artists made are overlapping?  Lighting, shading, depth of field.  And I think the struggle that courts have in this area is they don’t know what to grapple with.

They look at the work and they say, “Yeah, they look substantially similar,” but they do it for reasons that we shouldn’t find legally relevant.  And so I think Judge Koeltl was bound up in the fact that when you look at both of them there was copying.  That’s Prince in both.  And from the intuitive standpoint, when they look so similar, i.e.  they both look like the same person, then let’s put aside that test because our gut tells us it’s substantially similar and let’s move on to the balancing.

Because it’s a lot easier to say, from an intuitive standpoint, Warhol and Goldsmith aren’t in the same markets, and from a precedential standpoint, you know, factor four of the fair use test, the Rogers v. Koons decision said this is a whole area of art that has a fundamentally distinct purpose, referencing Andy Warhol.  The Cariou case said it’s clear that Andy Warhol’s works comment on consumerism and manufactured fame.  Now, the California Supreme Court has said Warhol takes celebrities and transforms them.  Wasn’t a fair use case, but everyone knows that Warhol transformed in the sense of taking some ordinary objects and using it to comment on commercialism, manufactured fame, et cetera.  And so I think Judge Koeltl just found it easier to say the markets are different, Warhol has a fundamentally different purpose and message.  And I can easily say that and get away with it, but if I say they’re not substantially similar then that just feels wrong.  So I think what’s—the nomenclature I think, is causing the problem.

Katie Wilson-Milne:  So Koeltl rules in the Foundation’s favor on fair use, and he does analyze the four factors.  I think we can talk about that when we’re talking about the appeal as well, but he finds that really three of the four factors favor the Foundation.  The factor that doesn’t, you know, isn’t that relevant given the transformative nature of Warhol’s painting.

You know, I think we could spend a whole podcast episode talking about this, but just, I think, worth reflecting on the fact that bypassing the substantial similarity test, which is going to, I think be increasingly tempting for courts given this growing doctrine of fair use and its growing flexibility in the fine art world is going to lead to a lack of case law and, you know, a lack of development of what an infringement analysis looks like in these cases.

And it is sort of the odd rebalancing away from the development of case law around infringement in these contexts.  Infringement in, you know, pop art, appropriation art, the kinds of cases we’re seeing where this comes up and then sort of spawning this new case law around fair use.  And I wonder if that imbalance is going to be more apparent and maybe problematic.

Luke Nikas:  I think if we really step back and reflect on what these doctrines are designed to do, in my view the fundamental purpose is they’re designed to give guidance to artists who are doing work today.  We create the common law and write decisions that are reasoned, because we want people to read them and understand that this is what you need to do to order your affairs tomorrow and the next day and the next month in order to avoid problems.

And so when I’m advising artists, for example, or foundations about fair use, can you create a work of art that looks like this?  And I’m doing it based on the array of decisions on fair use and balancing instead of a bright line, or at least as close as a bright line test as you can get on infringement, it gives little predictability.  And so I think it’s going to cause real problems.

Katie Wilson-Milne:  I love when we agree.

Steve Schindler:  Yeah, I think there’s almost—

Katie Wilson-Milne:  Go ahead, Steve.

Steve Schindler:  We all agree.  No, I think there’s almost no predictability.  I’m surprised that you can give advice to anyone about whether or not a particular work will be transformative and therefore will be a fair use or whether it will be infringing.  I think that’s very difficult.  But let’s talk a little bit about the first element, the Purpose and Character of Use, particularly in the Second Circuit.

And I mean, I know you used your words judiciously about choosing a forum, but obviously the Second Circuit has had the strongest inclination to find transformative use, you know, with Blanch v. Koons and Cariou v. Prince.  But the word “transformative,” as we all know, is not in the Copyright Act except where it talks about derivative works, right?

And so the question, I think, that this case raises, which was put to you certainly in the Second Circuit argument was, you know, how do you distinguish between a transformative use here or really a derivative use which is protected under the Copyright Act?

Luke Nikas:  The answer in a lot of other cases has been to find a way in which the works interact with each other.  So we have parody, for example.  We have satire.  We find the category of commentary or humor or some other meaning or message that’s clearly defined in our culture and we say, “that is what we want to create.”  We want to make sure that the arts continue to build on one another.

They build on one another through research, through scholarship, through parody, through satire.  And that’s how we’ve defined a number of other areas to create clearer case law.  With the arts in this context, it’s more complicated, because we don’t want to say that just parody, just satire, just sort of scholarship should be protected.  We want artists to influence other artists to create new and different things.

And so where I tried to focus the Second Circuit argument and where I think the law should focus is not on sort of using the word transformative.  Does this transform?  Because as you say that’s a question we ask about derivative works, too.  I think the purpose or character, meaning, message, expression, does a good job of explaining in some way, at least setting a standard for us to think about in this context, why?

So we look at purpose.  The Blanch v. Koons decision was a good example.  What was the purpose of the photographer creating this image?  What was the purpose of Koons using it as part of his collage?  What was the character?  What’s the meaning of it, the message of it?  If you drill down into those distinct components and you look at them and you ask yourself, “is someone looking at this Koons going to think that it is the same as the Blanch work?  Are they going to think that this strikes me in the same way?”  Or are they going to react to it and view it as something additive to the sort of the cultural lexicon, if you will?  Then ultimately we should try to protect that.  And you can’t do it by saying, you know, judge, exercise your judgment as to whether these works are different or the same.  You know, you’ve got the connoisseurship problem that Judge Koeltl even noted in his decision.

And that’s been sort of long a part of the case law, judges resistent to being connoisseurs.  You can’t say that the works are qualitatively better or worse.  That’s not the analysis.  And so my view is the Campbell court and the courts since that have laid out the tests have done a really good job.  Where have they gone sideways?  I think, best example was in the question that Judge Lynch asked to me when he said what’s the purpose of the Warhol versus the Goldsmith?  Aren’t they, I’m paraphrasing, aren’t they both to create a portrait of Prince?  And so then you’ve got the problem, what’s your frame of reference.  And that’s where I said, look at the Blanch v. Koons decision.  The purpose isn’t to create art.  The purpose isn’t to create portraits, because then you can sweep in every single second work as an infringement and not a fair use, because they’re all to create art or they’re all to create portraits.

  Or they’re all to create—you know, you can put them on the same plane and say the same thing.  But in the Blanch case the court did a good job and said, look, the purpose of the Blanch work, the photograph, was to make a specific kind of commentary about this particular image.  And it was fundamentally distinct from Koons’s purpose in using it.  And I think that’s the level you need to be at or else it’s all superficial.

Steve Schindler:  To keep with the Blanch case for a second, because I think it’s an interesting comparison, in the Blanch case the photographer Andrea Blanch had photographed a woman’s foot in a Gucci shoe for a glamour magazine.  And obviously to some extent, one of the purposes was to sell those particular kinds of shoes, you know, creating a kind of image around it.

And then Jeff Koons basically took that photograph and incorporated that foot into a kind of a collage-like work with other elements in it, you know, commenting as he said on sort of material culture and the like.  But the one significant difference it seems to me is that in that case you had a photograph in a very, very different kind of artistic piece.

What’s different in your case is you had a photograph of Prince and then a work of fine art, which looks similar, maybe not in this sort of substantially similar case but as you said, they’re two images of Prince.  And so it becomes a little bit difficult, it seems to me, to discern looking at it, you know, what those different purposes might be.

Katie Wilson-Milne:  It looks less like commentary.  I mean, I think is part of that, right?  It’s—  Goldsmith’s work wasn’t used in a collage.  It’s not being referenced.  It’s just being used as a model almost.  And that does feel different than being used as a reference or a cultural touchpoint.

Luke Nikas:  So that’s where the underlying record was really helpful in this case, and I’m hoping that the Second Circuit really focuses on it.

When I deposed Lynn Goldsmith I asked her in more or less words, what’s your purpose in creating this photograph?  What were you doing?  What were you trying to capture?  Why did you do this?

And what she said repeatedly in a number of different ways is: I wanted to capture the identity of the person I was photographing.  I wanted to tell their story.  I listened to their music before I took their picture.  I listened to their music and engaged with them.  I read about them.  I wanted to understand who they truly were.

And then I had a soundtrack playing when I was photographing them So ultimately I could try to bring out their true soul, their true identity and connect with that.  So ultimately the viewer of the photograph looks at the photograph and sees sort of the character of the person.  And I did that because ultimately the people that I sell my photographs to are worshipers of rock and roll.  They’ve been to a concert and they want to relive the experience they had in the aura of the artist.  They are rock and roll photograph collectors, you know, photography collectors.  They want to really be part of the identity of this culture.

The Warhol is exactly the opposite.  When you look at what Warhol was doing, why was he creating celebrity portraits?  Warhol was creating celebrity portraits not to depict the true self, not to depict the identity of the individuals, but to say ultimately the way in which we interact with imagery in society, celebrity in particular, we consume it.  It just is manufactured superficiality.  These aren’t real people.  These are totems of society that we worship.

Even though we have no idea who they are, we don’t care who they are, their images just repeat throughout TV, throughout society, and we engage with that.  And so when you look at the Warhol and you say, was he doing anything close to what Goldsmith was doing?  He was exactly the opposite.  And so ultimately that’s the distinct purpose I was echoing with Koons.

Blanch said, I was trying to show this with erotic sense, the sort of sexuality in the photographs.  And Koons was saying, I didn’t care about that at all.  I wanted to comment on our own experiences with objects and products so we gain new insight into how we interact with imagery in our lives.  And that’s what the Blanch case said.  And the underlying facts in the Warhol case really mapped on well to that distinction.

Katie Wilson-Milne:  So can we also talk about—I mean, we’re on the first factor, which makes sense we’d spend the most time on this one because this is where the, you know, transformative analysis sort of comes out of, even though, as Steve said, that’s not in the text of the Copyright Act.

But when we’re looking at the Purpose and Character of the Use, which is the first factor in the fair use analysis, Luke, you spent some time in that oral argument in the Second Circuit and I assume in the trial court talking about the fact that it’s not purpose and character really, it’s purpose or character.

What we’re talking about now is purpose, right, artistic purpose, which as a legal doctrine that’s supposed to put people on notice of what they can and can’t do is pretty difficult, right, to put into practice as like an artist, right?  Like how am I going to know if this is going to meet the purpose test or not?

And for the artist who’s work is being repurposed, either lawfully or unlawfully, they have no control over whether, you know, someone else’s purpose is going to meet this test and what that would even mean or look like.  So maybe just talk a little bit about the purpose or character and why those are two distinct analysis and not bound together.

Luke Nikas:  So that’s a really important distinction.  Goldsmith actually argued on appeal that the test is purpose and character, not or.  And the or, the disjunctive is something I emphasize to the panel.  So I think the best example of how you distinguish purpose and character, a work can have a completely different purpose but the identical character.  The Google Books case is a good example.

You’ve got a completely different purpose in the way in which the images of books were used.  And as everyone sort of knows, to take a step back, if you search Google you can find exact replicas of a number of different pages or copies from books.  And there was a lawsuit against Google where it was argued,  “these are identical.  Look, here’s my book.  Here’s my page from my book.  Google just copied that and posted it on its website.”

And it’s true there are a significant number of pages included, and they’re identical.  And the court said, well, this is not infringement.  Why?  The character’s exactly the same, the pages are copied verbatim, but the purpose of the author is to write a whole book that everyone can read, cover to cover, the purpose of Google using the pages is to provide sort of reference so people can find hits within books and then go buy the book themselves.

So you can have an identical character.  It looks the same, it smells the same, it tastes the same, but a completely different purpose in use.  So the analysis has to be distinct.  In the Warhol case we broke it down similarly.  We looked at the purpose and said Goldsmith’s purpose is distinct from Warhol’s.  And then we said that’s the end of the game.  You don’t need to go further.

But we also satisfy the character component of this as well.  What’s the character of the work?  That’s where it’s a little bit messier, but I think you look to the type of artistic decisions that were made to create a different or not different work.  The lighting, the shading, the meaning, the message, you know, the expression, the way in which the work appears visually to you.

And to circle back to the question that you asked to sort of set up this distinction, it’s difficult to give artists advice about purpose, you know, to say here was the purpose of the work they’re going to reference, make sure you have a different purpose.  This gets into sort of the manufacturing testimony, “Yes, of course I had a different purpose.  I had the opposite purpose of that person.”

Katie Wilson-Milne:  How can you test that?  I mean I just—in the Google Books case, I guess one question is, do we care—is it from the artist’s perspective or in this case Google’s perspective or is it from the general public’s perspective?  Like, does it matter that I can’t tell the difference between the purpose?  Is that irrelevant, if the two, you know, parties on either side of the V are admitting there was a different purpose?

Or is what we care about in the copyright analysis that the general public that’s consuming these works can’t tell if there’s the same or different purpose?

Luke Nikas:  So there are two answers to that.  One is what do the cases say?  And in my view what the cases say is all over the map.  So you look at the Blanch case and the court literally listened to Koons’s testimony, Blanch’s testimony and said, “let’s compare, you have different purposes.”  And that was the analysis.  And ultimately the court expressly relied on what the artists said to demonstrate the purpose test had been satisfied in fair use.  In the Cariou case—

Steve Schindler:  But just to jump in there for one second, because I mean, I think it’s also worth noting that Jeff Koons has been a defendant more than once in appropriation cases.  And the Rogers v. Koons case, one of the reasons it seems that Koons lost that case was because he hadn’t refined his testimony as to what his purpose was and he just did a better job in Blanch v. Koons.

Luke Nikas:  No, that’s right.  And that goes directly to my point about sort of manufactured testimony.  You know, can an artist who testifies really, really well satisfy the purpose test by researching what the original artist’s purpose was, come up with a story of a different purpose and then win?  In Rogers and Blanch cases, the answer is, well, maybe.  This seems to be what happened here.

But then in the Cariou case the court said, well, we don’t really look necessarily at what the artists said.  It’s not dispositive.  We’ll listen to it.  And that’s because Prince, in that case, Richard Prince, didn’t have the kind of nuanced message that Koons had developed in the Blanch case.  His message was more like the Rogers case.

And the court clearly had moved toward favoring fair use, and in that case, therefore, discounted what the artist’s testimony was.  And so in terms of the case law, I can’t give you guidance as to what the purpose is when it comes to is it the public interpretation or is it the artist?  All I can say is you’re going to be better off developing that kind of message as an artist and giving good testimony.  You can’t count on the court crediting that, but you better do it, because artists who have done it have been better off.  The real question is should we care, right?  And my view is it should be relevant, but I think when you look at the purpose of the copyright doctrine it’s to ensure that people have incentives to create more works and additive works without usurping the markets for the original artists.  And this is all outward facing.

You know, if one artist has a completely distinct internal purpose in creating the second work but the whole world thinks it’s exactly the same and a substitute for the other and you’re damaging the market of the original creator, then my view is, okay, the artists have testified about different purposes, but the copyright action should weigh how it impacts the market, the actual market for the works, much greater than what the artists have testified about.  Because that’s what the copyright law is all about in the first place

Katie Wilson-Milne:  I read Goldsmith’s or, you know, her lawyer Tom Hentoff’s movement of the argument on appeal to try to get more at that.  You know, really focusing much more on the public facing side of things.  How does this look?  What should the court’s intuition be?  Don’t worry about how special Warhol was or how sophisticated he was or what he was doing in art history.  Like, what’s your intuition here?  What does this just look like?  And then we should feel bad that it might impact—if there’s consumer confusion it’s going to impact Goldsmith’s market.  I see him trying to do that and I think he tried to do that at oral argument although so briefly.  You obviously don’t think that is a successful argument, and we’ll wait and see if the court does, but I think it’s interesting that Goldsmith’s argument became more public referencing over time.

Luke Nikas:  It was.  And I think the, you know, the problem is that there are two levels.  One is the superficial level and one is let’s really understand how the public perceives.  And at the superficial level this is where I started in saying there’s a reaction to works like this.  And some people will say it’s clearly the same and it’s clearly different.  But again, you have to really drill down into why people think that and how people actually consume these images.

So we, for example, showed a Christie’s catalog.  How does Warhol sell?  How do people who sell Warhols talk about Warhol.  How about people who buy Warhols?  What do they think about when they’re buying Warhols?  Compare that to Goldsmith.  How do her collectors think about, talk about her works?  How do her galleries market her works?  How does she do it?

And when you actually drill down, not to the just use your gut, look at the works, they look the same, but you actually get real texture in how these works interact with the market.  And this is a factor four market point but I think it does relate to the factor one.  What we saw was the channels of distribution, completely different.    Goldsmith goes to rock and roll photography galleries and markets her works to collectors as a way to relive their experience at concerts or a way to sort of have a celebrity you care about and you worship or follow in your home.  And that’s how they’re pitched.  That’s why people buy them.  And then you look at the Warhols and you say, how do we talk about Warhol in the market?

We talk about Warhol not as a realist, you know, depicting real life pictures of celebrities or flowers or whatever objects.  We talk about Warhol in the way that he commented on consumerism.  And then when collectors read about Warhol and decide to buy, and you can look at the auction catalogs and we, like I said, submitted some, the way the auction houses interact with their consumers is the same.

And so what I was arguing is not let’s look at the internal only, let’s just listen to people who interpret Warhol and talk about the purpose or the meaning and the message.  Let’s actually go out in the world and see how people talk about them and they’re fundamentally distinct.

Katie Wilson-Milne:  And now, I mean, we are talking about the fourth factor, which is the effect on the potential market for the value of the predicate work or the copyrighted work.  But you know what, one thing that is interesting in this case is, you know, she disagrees, right?  I mean, Goldsmith says, no, actually we do have an overlap.  That’s evidenced by the fact that the very root of this dispute is Vanity Fair licensing my image to use in its magazine.  I worked with Vanity Fair before.  Warhol uses my image to do a commercial project for Vanity Fair, it’s very similar.

And it seemed like the second circuit was interested in that, too, that if you just go back to where this dispute originates, the distance may be between this Warhol piece, not Warhol as an artist, but this particular Warhol project.  And Goldsmith’s photograph is smaller.

Luke Nikas:  I mean, the TCA Television case taught us that there are two markets.  You know, you’ve got the primary market where you’re selling the original work of art, and then you’ve got the derivative market, which is better known as the licensing market.  And that’s where you’ve got an image of the original work that’s being licensed for some different purpose, you know, magazine covers for example.

This case with Goldsmith, the primary market was absolutely clear.  Her primary market for her photographs is a completely different universe from the primary market for Warhol.  And the courts tell us, we look at the primary market first, that’s the focus of factor four.  And so as a threshold question, we demonstrated clearly that just in common sense that Warhol’s primary market’s different.

Her focus was on the derivative market, and that’s where your question is.  Let’s look at licensing.  Aside from the fact that it should be less important for a whole host of reasons, wasn’t it really important here?  And the answer is the evidence in the case showed that Warhol’s licensing market was distinct from Goldsmith’s for similar ways that his work is perceived as different.  Different audience, different purpose.  His images are used in different ways.  You license, you know, a Warhol celebrity portrait to convey a certain kind of message, to accompany a certain kind of article.  And ultimately the consumers of the licensing market for Warhol choose Warhol for very different reasons.  Goldsmith had never before licensed a single work for an artist reference.  This was one license.

She never again licensed a work for an artist reference.  Zero market that she had actually created or used that was comparable to Warhol’s.  And so we emphasized, look, she did license this one work.  She never did it before; she never did it again.  She has never even sold this work before.

And although you’re not allowed to invade markets that others have exploited, if it’s an infringement, the courts that have looked at issues like this, Blanch was one, Cariou was one, have said, we do care when assessing a derivative market.  If the artist has never before exploited it and doesn’t indicate any intention of exploiting it.

And when Goldsmith was deposed she basically said, you know, this is the only time I’ve ever done this.  And if I go and sell these works, I’m going to sell them at the same price and basically do what I’ve always done with my art.  And so there was no evidence that this work is used in licensing in the same way as Warhol’s.

Katie Wilson-Milne:  But this does highlight the difference between some of the precedents we’re mentioning especially the Koons cases where, you know, he’s, whatever you think of it, creating a work of fine art, a collaged work of fine art that references other works, often commercial works, but his projects are not commercial other than in the sense that that work of fine art might be sold at a gallery.

Here we’re really all talking about all these instances are magazine context.  It’s like Vanity Fair is not doing this for any reason other than to sell magazines, right?  So Goldsmith gets involved, Warhol gets involved and this case gets brought all because Vanity Fair wants these images to sell magazines.  So does that matter?  I mean, it seems like it’s different than, you know, a Warhol piece being sold in a gallery.

Here it’s Goldsmith at Vanity Fair, Warhol—Vanity Fair, and licensing of a Warhol image in Vanity Fair.

Luke Nikas:  Yeah.  So there are two questions.  One is what weight should it carry?  And I think the weight is clear, it’s secondary to the primary market.  But when you actually look at it, you know, question number two, I think the most important issue is whether they’re being licensed for the same reasons.  People are choosing them one as a substitute for the other.

And so for example, we had the Artists Rights Society as a fact witness in the case, and we asked them have you ever had a situation where someone was debating between putting a Warhol on the cover and a Goldsmith?  The answer, absolutely not.  We had Vanity Fair as a fact witness in this case.  Did you ever consider choosing the Goldsmith instead of the Warhol?  Absolutely not.  Like Warhol is chosen for distinct reasons, distinct contexts, to convey a certain kind of message and impression.

People don’t choose Goldsmith’s photograph in lieu of Warhol or Warhol in lieu of Goldsmith.  People choose a Goldsmith photograph for the cover of a magazine because they want to put a realistic image of, you know, the rock and roll star on the cover of Rolling Stone, for example.  They want you to pick up the magazine and see this is a portrait of this person, an actual picture.  They don’t want to put a Warhol on the cover.

Vanity Fair, different kind of message.  You look at the original article that accompanied, it was “Purple Fame.”  This is about the rising celebrity of Prince, the personality, almost lifting above the person and becoming sort of accepted as part of the culture and how the sort of celebrity of Prince was having this impact.

And so that really mirrors the kind of commentary Warhol’s using with his work.  And so it’s no surprise to me that to accompany an article entitled “Purple Fame” about the celebrity of a person you put a Warhol and not a Goldsmith, because they speak to a different point, a different message.  And so do you consider licensing?  Do you consider these issues?  Certainly you do.  But ultimately when one work is on the cover of a magazine and an artist says, hey, I’ve licensed images to that magazine too.  That’s not the end of the story.  You have to ask why.

Katie Wilson-Milne:  Why in this case, if all this is true and Warhol’s is such a distinct—Warhol’s take on this image of Prince is so distinct, why would Vanity Fair need to have a license to Goldsmith’s image in the beginning?

Luke Nikas:  The way this was set up is Goldsmith had a company and the company tried to push her works to various different outlets.  And so she regularly approached, you know, through her staff, magazines and say, Goldsmith can take photographs of this artist or I think this artist is hot right now.  Goldsmith can take a photograph and license.

And so ultimately, you know, what we think happened is someone had a relationship with a person at Vanity Fair and said, hey, this is a great photograph of Prince and you should use it.  Or in reverse Vanity Fair knew that Goldsmith took pictures of rock and roll stars and said, hey, we’re doing an article about Prince.  Do you have just a good shot we can use to have as an artist reference to accompany this article?

You know, any picture of Prince would suffice.  And we showed that in the underlying briefs in the case.  You know, we went on the internet and found like six or seven pictures of Prince that if Warhol had used those images in the way he used Goldsmith’s, they would’ve come out with a materially similar end work of art.  And so our point was we didn’t need the Goldsmith.  Warhol didn’t go seek that out, because it had some artistic quality he wanted to convey.  Vanity Fair said, hey, we need a picture of Prince, do you have one?  Great.  Now we’re going to give it to Warhol and he’s going to do his thing.

Steve Schindler:  I think that’s a good place to end, Luke.  And I just want to say we have in fairness, invited your adversary, Mr. Hentoff, onto the podcast.  We hope he’ll come.  He’s deferred for the moment but maybe after he listens to this podcast he’ll change his mind.

Katie Wilson-Milne:  Thanks so much, Luke.  It was great talking with you.

Luke Nikas:  Likewise.

Steve Schindler:  Yeah, it was really great.  Thank you, Luke.

All right, Katie.  Well, you indicated at the outset that the day after this interview the Second Circuit issued its significant decision in Warhol v. Goldsmith.  So why don’t you tell us what they did?

Katie Wilson-Milne:  In very broad brush strokes, and I’ll just say the decision is a tight 65 pages, which we will of course link to in the show notes so people can look at it themselves.  But the Second Circuit found for Goldsmith and disagreed with the Warhol Foundation’s argument that the Prince series or the Prince work that was licensed to Vanity Fair specifically was fair use.

They said this is not a fair use.  And significantly, they went even further, deciding something they absolutely did not have to decide, which was that there was a substantial similarity between Goldsmith’s photograph and Warhol’s painting using that photograph as an inspiration.  And that means that the court decided something that the district court did not decide, which is a bit unusual because they didn’t need to do that.

And it means that there were two holdings.  One is there was copyright infringement by Warhol in using Goldsmith’s photograph, and second that it was not a fair use.  That fair use is not a valid defense here.  So it’s a pretty stark reversal of the district court, and it was also an opportunity for the Second Circuit to walk back some of the expansiveness of the first fair use factor, which has really become about “transformativeness,” that they had sort of opened the door to in a case called Cariou v Prince, which we’ve talked about on this podcast.

So I’d say it was interesting both because it was such a stark reversal of the district court and the Second Circuit went way further than it needed to in that reversal.  And also because the Second Circuit is clearly course-correcting itself and perhaps what it sees as sort of a national expansion of fair use of its own making.  So Steve, maybe you want to talk some more about that?

Steve Schindler:  Yeah.  I think one of the interesting things, to me anyway, was the walking back, as you say, of the first factor and transformativeness, which has become so much the defining factor.  You know, the Copyright Act and precedent suggests that the court needs to look at all of the factors, including the market usurpation, which is factor four.

But factor one has really become the sort of sine qua non in some ways in the Second Circuit of whether or not something is fair use.  And particularly, this concept of in some cases the appropriation artists are creating new aesthetics and new meaning.

And what the Second Circuit did in this regard is say that the district judge really got it wrong in sort of assuming the role of art critic, of trying to make some kind of aesthetic judgment, if you will, about something being uniquely of Warhol in this case rather than looking at what was the artistic purpose of each of the primary work and the secondary work and concluding that in both of these cases, it was essentially to be licensed to sell magazines.

Katie Wilson-Milne:  And the court says pretty clearly that there’s been some mistake about looking to the intent of the artist, right?  This is not a workable test.  If we just go to a famous artist and his lawyer can say to, you know, make sure you say that you were giving it a new purpose and meaning and then you’re all set.  Like the court says that doesn’t work.  It’s not about what the artist thinks when they create a secondary work.  It’s about what is a reasonable perception of the secondary work.  Would normal people, you know, reasonably looking at the secondary work think that it was distinct in its artistic purpose, that it’s a fair use rather than a derivative work?  And I think the court, the second circuit here really finally addresses this tension between derivative works and infringing works that qualify for fair use and therefore are okay.

There’s always been this tension about what is derivative and what is transformative to qualify for fair use.  And the second circuit here really clamps down on that in the case of fine art and says, you know, not every secondary work that adds something new or is aesthetically different is transformative.  That’s not enough.  We need something else here.

And they really harken back to what we think of as classic fair use, which is sort of commentary and parody and news, and kind of go back to an idea of that, which is it’s somehow this—that those are strong fair use cases.  And if we’re not in a strong for use world where we’re clearly referencing the old work for purposes of commenting on it, then it really needs to embody a distinct artistic purpose entirely separate from the source material.

And then they give this example in a couple of the Jeff Koons cases where, you know, when he just sort of makes a sculpture of an existing work of art, that’s not fair use.  But when he makes a collage, you know, with a lot of different images in one little part of the collage is a secondary use that is fair use because it’s sort of put against a different context and it has a lot of other things going on.

So I don’t know that this is a decision easy to replicate with different sets of facts but, you know, there’s a pretty strong statement.

Steve Schindler:  And I think the court also took pains, again, to focus some attention on factor four, which is the effect of the use on the market for the original.  And I think what we’ve seen in a couple of these appropriation art cases, you know, there always seems to be underlying it all, you know, a little bit of a class factor, if you will.

You know, in Cariou, it was Patrick Cariou who was a photographer who did not make a lot of money on his photographs and spent, you know, decades in Jamaica photographing Rastafarians.  And then along came Richard Prince and sort of cut them out and put them on canvas and painted some other things and sold them for hundreds of thousands of dollars at the Gagosian Gallery.

And here, too, we have Lynn Goldsmith, who was a well-recognized celebrity photographer but not in the same sort of art stratosphere as Warhol.  And I think the court, you know, kind of looked at that and said, just because you’re Warhol you can’t just turn everything into a Warhol and not license it.

And interestingly, and I think what we saw in Cariou as we saw here is in looking at the markets, courts have sometimes looked at the markets for say a photographer and a fine artist as being different.  And in fact, the court noted here, yeah, of course, in one market that is the sales of Warhol’s and the sales Goldsmith’s, they are different.  But in this case, the market was really the licensing of celebrity photographs to a magazine and the court said those are exactly the same.

Katie Wilson-Milne:  Right.  Because here the subject of the lawsuit was really triggered by the Warhol art being licensed for the cover of Vanity Fair.  So it was really in the same universe as how Goldsmith operates.  You know, I think Luke indicated when we talked to him that the district court did let slip a little bit this idea that this is Warhol, of course, this is different.

The Second Circuit just says that’s—  being known and famous is not something that we are going to look to here.  And you can still fall into the trap of creating a secondary work that violates the derivative use, right?  Which is what they basically find.  I mean, they say they don’t find that it’s a derivative work, but they say explicitly that it is much closer to a derivative work than a fair use.

Steve Schindler:  Right.  And they spend a certain amount of time, at least Judge Lynch does, talking about the analogy between, say, a novel and a movie of a novel.  Which was also pressed at the oral argument, you know, that yes, of course the movie is going to be different.  And particularly if you have a well-known, experienced director who’s going to have the aesthetic leaning and perspective of that director, but it’s still clear that it came from a particular novel.

And I think making the same argument here that, sure Warhol is giving this portrait a sort of Warholian look, if you will, but at least to the Second Circuit they could see that it clearly came from a particular photograph of Lynn Goldsmith.

Katie Wilson-Milne:  Right.  And they make that point, too, distinguishing it from other cases.  It’s not that Warhol looked at Goldsmith’s photo and then recreated a different photograph or posed people, you know, inspired by that photo.  He took that literal photograph and used it to create his art.

And that is distinct from some of the other fair use cases where we see sort of posing or portraiture sort of inspired by the photograph but without the use of that exact photograph.  And I think the movie example’s really a powerful one for the court, because they clearly just can’t explain it, right?  They cannot make sense of the fact that Scorsese could make a movie about a book that is completely different in tone and feeling, and probably even significant dialogue than the book.  And yet we all accept that that’s a derivative work.  And how here is that not the case?

If we’re defining derivative works as the same work but in a different form, how is this not the same work but in a different form?  We all agree it’s a different form, but a different impression of the subject, as the court says, is not enough for transformativeness.

Steve Schindler:  So do you think this decision clarifies fair use in the Second Circuit, or do you think it makes it more confusing?

Katie Wilson-Milne:  I think it’s confusing, because it’s a correction.  And, you know, the Second Circuit had really staked out a fairly stark, ambitious position on transformativeness and fair use, which as we know other circuits have not followed, specifically the Seventh Circuit, which has always been skeptical of this and always placed weight, I think as case law suggests, on the fourth factor and not said the first one is the only one that matters.

And I think the Second Circuit now realizes how far, you know, it went down that road and is trying to delicately walk it back.  And I think anytime that happens in a body of law in a specific area it’s very confusing.  Because they’re not reversing Cariou, they’re just sort of taking a step to the side and now we’re all going to have to figure out, you know, where on some kind of complicated chart every case falls.

Steve Schindler:  Where do we go with appeals now, because now we have a decision from a standard three judge panel in the Second Circuit.  What are the Warhol Foundation’s options at this point?

Katie Wilson-Milne:  So Luke, isn’t here to tell us, but I think he said publicly or we’re fairly sure that they’re going to appeal.  And they have two options.  One is to file a cert petition to the Supreme Court and wait to see if the Supreme Court wants to hear this case, which I am skeptical about.

The Supreme court just came out with a really significant fair use decision involving software, which is, you know, a very different context but looks at these factors in some similar ways.  Or they can go back to the Second Circuit and say, “you know what?  I think every judge on the second circuit needs to hear this, it’s so important.  I want you to reconsider your opinion but with every judge.”  And that’s called a rehearing en banc.  Maybe that’s slightly more likely.  I’m not sure.  I think the Second Circuit may want to wash its hands of this for a little while.  But those are the two options, and so we’ll have to wait and see.

Steve Schindler:  All right.  Well, we’ll stay tuned.

And that’s it for today’s podcast.  Please subscribe to us wherever you get your podcasts and send us feedback at podcast@schlaw.com.  And if you like what you hear, give us a five-star rating.  We are also featuring the original music of Chris Thompson.  And finally we want to thank our fabulous producer, Jackie Santos, for making us sound so good.

Katie Wilson-Milne:  Until next time, I’m Katie Wilson-Milne.

Steve Schindler:  And I’m Steve Schindler, bringing you the Art Law Podcast, the podcast exploring the places where art intersects with an interferes with the law.

Katie Wilson-Milne:  The information provided in this podcast is not intended to be a source of legal advice.  You should not consider the information provided to be an invitation for an attorney-client relationship, should not rely on the information as legal advice for any purpose, and should always seek the legal advice of competent counsel in the relevant jurisdiction.

Music by Chris Thompson.  Produced by Jackie Santos.