Supreme Court Saves the Derivative Works Right from “Transformative” Extinction; And Why AI Should Be Worried

Stephen Carlisle May 25, 2023

The Supreme Court’s decision in Andy Warhol Foundation v. Goldsmith was a great first step in reigning in the vast over importance that Courts have been ascribing to “transformation” in fair use cases. While the majority of commentators have focused on the “common commercial purpose” aspect of the decision, to me the more important holding is the Court’s recognition and affirmation of the importance of the author’s right to prepare derivative works, a point completely avoided by the dissenting opinion. ¹

I have been pounding the table on this point for many years. Indeed, one of the very first blog posts I published (way back in 2014) had this to say:

“The problem with this line of [transformative] reasoning is that it ignores the provisions of the copyright act with regards to the creation of “derivative works.”  According to the copyright act, a derivative work “is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.” The problem the Supreme Court created is that the creation of a derivative work is supposed to be an exclusive right of the copyright owner, and requires permission or a license. Indeed, the word “transformed” is right there in the definition of what a derivative work is. Yet now, with this language from the Supreme Court, a work that is “transformed” is fair use and is therefore not an infringement of copyright.” ²

In the years that followed the decision in Acuff-Rose v. Campbell ³ (the opinion that gave judicial approval to the concept of “transformative” fair use), the argument that if a work is “transformative” it must be fair use has wreaked havoc on the copyright landscape like Godzilla wading through cheaply built office buildings. The “win rate” for finding fair use where the Court found the use to be “transformative” was 100% in at least five Circuits and was never less than 66.7%. ⁴ If there ever was a case of the tail wagging the dog, this was it.

Especially aggravating was that the word “transform” never appears in the fair use section of the Copyright Act. The words “criticism, comment, news reporting, teaching, scholarship and research” do appear, none of which applies to the Andy Warhol painting at issue. The word “transform” does appear in the Copyright Act in the definition of what a derivative work is, and the Warhol print of Lynn Goldsmith’s photo is unquestionably a derivative work.

The facts of the case are:

• Defendant Lynn Goldsmith took 11 photographs of Prince at her New York Studio in 1981.
• Though the photos were created on assignment for Newsweek, the photos were never published.
• Vanity Fair asked for and received a license from Goldsmith to use one of the Prince photographs “for use as an artist reference in connection with an article to be published…”
• Warhol created a single image which was used in connection with a 1984 article about Prince titled “Purple Fame” for which Vanity Fair gave Goldsmith a credit for the “source photograph.”
• Sometime later, Warhol creates the “Prince Series” of 16 images based on the Goldsmith photograph, and begins to sell both originals and copies. ⁵
• After Prince’s death, the AWF licensed one of the Prince series (what the Court refers to as the Orange Prince) to Vanity Fair magazine for $10,000. ⁶
• Of the $10,000 fee, Goldsmith received nothing and was not even given a source credit. ⁷
• When Goldsmith notified the AWF about possible infringement, the AWF sued her. ⁸

That’s right, the AWF, this bold champion of artist rights (according to the dissent), sued the photographer whose image they had copied.

But here, finally, the Court explicitly recognizes the danger that “transformative use” will make the right to prepare derivative works irrelevant and unenforceable.

“[A]n overbroad concept of transformative use, one that includes any further purpose, or any different character, would narrow the copyright owner’s exclusive right to create derivative works. To preserve that right, the degree of transformation required to make “transformative” use of an original must go beyond that required to qualify as a derivative.” ⁹

And this:

“…Campbell cannot be read to mean that § 107(1) weighs in favor of any use that adds some new expression, meaning, or message.

Otherwise, “transformative use” would swallow the copyright owner’s exclusive right to prepare derivative works. Many derivative works, including musical arrangements, film and stage adaptions, sequels, spinoffs, and others that “recast, transfor[m] or adap[t]” the original, § 101, add new expression, meaning or message, or provide new information, new aesthetics, new insights and understandings. That is an intractable problem for AWF’s interpretation of transformative use. The first fair use factor would not weigh in favor of a commercial remix of Prince’s “Purple Rain” just because the remix added new expression or had a different aesthetic. A film or musical adaptation, like that of Alice Walker’s The Color Purple, might win awards for its “significant creative contribution”; alter the meaning of a classic novel; and add “important new expression,” such as images, performances, original music, and lyrics. (citations omitted). But that does not in itself dispense with the need for licensing.” ¹⁰

And finally this:

“Granting the District Court’s conclusion that Orange Prince reasonably can be perceived to portray Prince as iconic, whereas Goldsmith’s portrayal is photorealistic, that difference must be evaluated in the context of the specific use at issue. The use is AWF’s commercial licensing of Orange Prince to appear on the cover of Condé Nast’s special commemorative edition. The purpose of that use is, still, to illustrate a magazine about Prince with a portrait of Prince. Although the purpose could be more specifically described as illustrating a magazine about Prince with a portrait of Prince, one that portrays Prince somewhat differently from Goldsmith’s photograph (yet has no critical bearing on her photograph), that degree of difference is not enough for the first factor to favor AWF, given the specific context of the use.

To hold otherwise would potentially authorize a range of commercial copying of photographs, to be used for purposes that are substantially the same as those of the originals. As long as the user somehow portrays the subject of the photograph differently, he could make modest alterations to the original, sell it to an outlet to accompany a story about the subject, and claim transformative use. Many photographs will be open to various interpretations. A subject as open to interpretation as the human face, for example, reasonably can be perceived as conveying several possible meanings. The application of an artist’s characteristic style to bring out a particular meaning that was available in the photograph is less likely to constitute a “further purpose” as Campbell used the term.” ¹¹

And then there’s this from the concurring opinion by Gorsuch and Jackson:

“[T]he copyright statute expressly protects a copyright holder’s exclusive right to create “derivative works” that “transfor[m]” or “adap[t]” his original work. §§ 101, 106(2). So saying that a later user of a copyrighted work “transformed” its message and endowed it with a “new aesthetic” cannot automatically mean he has made fair use of it. (citation omitted). To hold otherwise would risk making a nonsense of the statutory scheme—suggesting that transformative uses of originals belong to the copyright holder (under § 106) but that others may simultaneously claim those transformative uses for themselves (under § 107). We aren’t normally in the business of putting a statute “at war with itself ” in this way.” ¹²

And what does the dissent have to say about all of this? Well, nothing. It never makes mention of section 106(2) or the right to prepare derivative works as one of the exclusive rights of authors. It instead launches a long screed about how “everybody copies from everybody else.” To wit:

“For, let’s be honest, artists don’t create all on their own; they cannot do what they do without borrowing from or otherwise making use of the work of others.” ¹³

Politely, this is baloney. As I wrote previously in a post titled “Copying is Not Creativity”:

“Now, since when did copying become creativity? True creative people create. True creative people do not just copy slavishly from others. That is why they are remembered hundreds of years after their death. Artists may be indeed be influenced by other artists, and this connection may be apparent in their work, but this is not the same thing as simply copying. Copying is not creativity. Copying is copying.

Aha! You may be thinking, didn’t Stravinsky say “good composers borrow, great composers steal”? Actually, he never said this. Plus it is worth noting that this same quote has also been attributed to Picasso, who didn’t say it either.” ¹⁴

From there, the dissent digs a deeper hole: “The experts explained, in far greater detail than I have, the laborious and painstaking work that Warhol put into these and other portraits.” ¹⁵

Except that the Supreme Court dismissed the validity of the “sweat of the brow” claim to copyright in Feist Publications, Inc. v. Rural Telephone Service Co., way back when in 1991. ¹⁶

Further on in the dissent:

“It does not take an art expert to see a transformation—but in any event, all those offering testimony in this case agreed there was one. ¹⁷… The majority does not see it. And I mean that literally. There is precious little evidence in today’s opinion that the majority has actually looked at these images, much less that it has engaged with expert views of their aesthetics and meaning ¹⁸… The dazzling creativity evident in the Prince portrait might not get Warhol all the way home in the fair-use inquiry; there remain other factors to be considered and possibly weighed against the first one. (citation omitted) But the “purpose and character of [Warhol’s] use” of the copyrighted work—what he did to the Goldsmith photo, in service of what objects—counts powerfully in his favor. He started with an old photo, but he created a new new thing [sic].” ¹⁹

The problem with this is two-fold: first that it turns Judges into art critics. This is the precise problem the majority opinion is seeking to avoid. Second, it affords famous artists a “get out of jail free” card for simply being a famous artist. We can call this the “Richard Prince defense.” But what is the worst part is how the dissent dismissed Goldsmith’s work as an “old photo” but praises Warhol’s “dazzling creativity” as if the fact that Goldsmith’s photo was old meant it was less deserving of copyright protection.

But what finally trips up the dissent is its own contradictions:

“[The majority opinion] will stifle creativity of every sort. It will impede new art and music and literature. It will thwart the expression of new ideas and the attainment of new knowledge. It will make our world poorer.” ²⁰(emphasis added)

Except your entire opinion is based on the (erroneous) assumption that “everybody copies from everybody else.” Nothing “new” is being created. Copying is copying. It does not create “new art and music” nor “new ideas” nor “new knowledge.” So, which is it? If it’s copied as you claim on page 3 how can this be reborn as “new” on page 36?

Which brings us to Artificial Intelligence. As Jonathan Bailey over at Plagiarism Today has observed:

“Nearly all data that AIs have ingested, including text and image AIs, has been without permission from the original creators. This means that AIs are built on large volumes of copyright-protected material that they are using without permission… By shifting the focus away from how transformative the use is, the Supreme Court devalued the best argument in favor of AI companies. Now, transformativeness must be contrasted with other elements, most notably how the new work competes with and/or replaces the original in the marketplace.

That, however, is not likely a discussion AI companies are eager to have. Stock photographers, for example, should have little trouble proving that the new works are used to compete with stock photos. Likewise, journalists should have no trouble showing how AI-generated text is used to replace news articles.

Things get even worse when you realize AIs often are tasked with producing works that are “in the style of” a particular creator, making works that are designed to directly compete with that artist’s work.” ²¹

In support of this line of reasoning, we can look to this footnote in the Warhol opinion:

“The Court did not hold that any secondary use that is innovative, in some sense, or that a judge or Justice considers to be creative progress consistent with the constitutional objective of copyright, is thereby transformative. The Court instead emphasized that Google used Sun’s code in a “distinct and different” context, and “only insofar as needed” or “necessary” to achieve Google’s new purpose. (citation omitted) In other words, the same concepts of use and justification that the Court relied on in Google are the ones that it applies today.” ²²

Since the amount of copying engaged is so vast, indiscriminately Hoovering up any image it can find on the Internet, then spitting it back out with images that are designed purposefully to compete with the images that have been copied, this decision makes the AI companies claim of “fair use,” which were already questionable, not very tenable. Though, that won’t stop them from raising it. But remember fair use is an affirmative defense.

Now remind me what the “purpose and character” of the AI programs are?