In 1981 Andy Warhol used a photograph made by Lynn Goldsmith as reference for an illustration of the musician Prince. Vanity Fair magazine had hired Warhol to make the illustration; it was to accompany an article about Prince in the magazine’s November 1984 issue. Goldsmith had issued a limited license for this purpose. The license stated her photograph could be used for reference, “one time only.”

Turns out – in addition to the Vanity Fair illustration – Warhol made a series of 16 additional works derived from Goldsmith’s photo. When Prince died in 2016, Vanity Fair’s parent company (Condé Nast) purchased a license from the Andy Warhol Foundation for the Visual Arts, Inc. (AWF) for use of one of those other 16 works (specifically, one called Orange Prince). Recall, Goldsmith’s original license had not authorized creation of anything other than the single illustration.

When Goldsmith saw Orange Prince on the cover of Condé Nast’s magazine, she notified AWF that she considered it an infringement of her copyright in the original photograph. Litigation ensued, in which AWF advanced fair use as its defense. The District Court held in AWF’s favor.  The Court of Appeals reversed, finding that all four fair use factors favored Goldsmith.

Today (May 18, 2023) the United States Supreme Court rejected AWF’s fair use defense, finding in Goldsmith’s favor.

The Court clarifies a common misunderstanding: calling a work “transformative” does not make it so. The first fair use factor (which was the only factor at issue before the Court) focuses on whether an allegedly infringing use has a “further purpose or different character,” which is a matter of degree; and the degree of difference must be weighed against other considerations, like commercialism. Although new meaning or message may be relevant, it is not, without more, dispositive of the first factor.

Goldsmith’s original photograph had been made for purposes of a magazine article about Prince. Orange Prince was used for purposes of accompanying a magazine article about Prince. They shared the same purpose. As the Court observed, the first factor’s central question is whether the allegedly infringing use merely supersedes the objects of the original creation, supplanting the original. In this case, the use of Orange Prince supplanted the purpose of Goldsmith’s photograph.

Underlying the Court’s decision is the copyright owner’s exclusive right to prepare derivative works. AWF contended that factor one should tip in its favor because Orange Prince reflects original meanings and messages. By adding new expression to the photograph, AWF argued, Warhol made a “transformative” use of it.

The Court reined this in, reminding AWF that copyright owners hold an exclusive right to prepare derivative works. It can’t be, that any use that adds any new expression or meaning gets a free pass. “Otherwise,” said the Court, “ ‘transformative use’ would swallow the copyright owner’s exclusive right to prepare derivative works, as many derivative works…add new expression of some kind.”  The degree of transformation required to make “transformative” use of an original work must go beyond that required to qualify as a derivative. The first factor asks whether and to what extent the use at issue has a purpose or character different from the original.

Fair use analysis is entirely dependent on the specific facts at issue. There are no bright line rules and there are no shortcuts. One must conduct an independent analysis for each and every situation. If (more likely, when) you hear somebody say offhand, “oh, that’s fair use” – Hard Stop. It is legally impossible to make such a statement as to any particular use, without first having conducted a complete analysis.