Stinging Dissent in Warhol Lambasts Reliance on Commercial Use

In Warhol v. Goldsmith, the US Supreme Court focused on whether Andy Warhol’s use of Goldsmith’s Prince photograph constituted fair use under § 107 of the Copyright Act. While § 107 provides four factors for courts to consider whether a use is fair, the court focused on only the first factor—purpose and character of the use. The parties conceded the other three factors weighed against fair use.

The court ultimately decided that this factor, too, weighed against fair use. While the case doesn’t seem remarkable in breaking new ground, two aspects of the case stand out. First, the case seemed to correct for an over-reliance on the transformative nature of works, which courts have given an almost talismanic, presumptive status of fair use. The second is the colloquy between the majority and dissent.

The sole issue before the court was whether the first factor weighed in favor of or against fair use. The fair use doctrine can be justified as furthering the purpose of copyright law in promoting creativity by allowing others to use creative works—this is based on the notion that “there is no such thing as a wholly original thought.”

The first factor aids in this determination by looking to “the purpose and character of the use (including whether such use is of a commercial nature or is more for nonprofit educational purposes).” More specifically, this factor asks whether the new work merely supersedes the objects of the original creation, or instead “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.” In other words, this factor asks whether and to what extent the new work is transformative.

Relying on this factor, courts have found that transformative uses are fair uses, with little weight given to other factors. While the court has routinely cautioned that no uses are presumptively fair uses, courts have analyzed this factor as presumptively fair. To be sure, many such uses are indeed fair; but, here, the court made clear that not all transformative uses will be fair uses. This is consistent with precedent and with the statute.

The court also made clear that in addition to the transformative nature of the use, the first factor considers the commercial nature of the use. As the court stated, these two uses must be balanced against each other. The majority believed this balance weighed against fair use because of the particular commercial activity involved—licensing the work in the same manner as the original copyright holder. The dissent believed otherwise.

In a scathing opinion, the dissent took issue with the majority failing to appreciate the brilliance of Warhol’s work, elevating commercial activity to a presumptively unfair use, and injecting considerations of market harm (the fourth factor) in the analysis of the first factor.

As to the first failure, the dissent might be right. The majority describes the changes Warhol made to the photograph as modest alterations. Many would see it differently. Nevertheless, as Justice Oliver Wendell Holmes once famously said, “It would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of pictorial illustrations, outside of the narrowest and most obvious limits.” Holmes was concerned that judges were ill-suited to evaluate artistic merit and that judges should not censor art, as one person’s trash is another’s treasure.

Moreover, the dissent might have gone too far in suggesting that the transformative nature of Warhol’s work mattered not to the majority. Rather, the majority cautioned that the transformative nature is but one factor that must be balanced against the commercial nature, and that here, the commercial nature of the work weighed more heavily.

Further, every transformative use can’t be fair. As the majority noted, such a reading of this first factor would render the copyright holder’s right to prepare derivative works a nullity. Section 106(2) of the Copyright Act grants to the copyright owner the exclusive right “to prepare derivative works based upon the copyrighted work.” Under this right, the copyright owner may prevent any unauthorized works, including any “form in which [the] work may be recast, transformed or adapted.” Some transformative works will be derivative works. Not all can be considered fair.

The dissent is certainly right in stating that there are no presumptively prohibited uses, even commercial uses. Section 107’s preambular examples—criticism, comment, news reporting, teaching—all involve commercial uses, yet that doesn’t prevent them from being fair uses. But the statute by its terms asks courts to consider whether the purported fair use is for commercial purposes. The majority did not intimate that all commercial uses are prohibited. Rather, the majority said this particular commercial use—a licensed use that is precisely the same as the copyright owner’s licensed use—weighed against fair use. That seems defensible.

The dissent also chastised the majority for considering the effect of this licensed use on the market for the original—that is factor four (“the effect of the use upon the potential market for or value of the copyrighted work”). The dissent is right. The factors are different and should be analyzed separately. Again, however, there is considerable interdependence between factors one and four. The more highly transformative the defendant’s work is under factor one, the less likely it is to undercut the market for the plaintiff’s work under factor four. Thus, merely noting that is hardly conflating the two.

In the end, the interaction between the majority and dissent is about line drawing. Where should courts draw the line in allowing transformative uses or commercial uses? Here, the majority and dissent drew the line differently.

The case is Andy Warhol Found. for the Visual Arts, Inc. v. Goldsmith, U.S., No. 21-869, opinion 5/18/23.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Donald P. Harris is associate dean for academic affairs and equity, diversity, and inclusion liaison at Temple University Beasley School of Law. He is a specialist in international intellectual property and teaches in the areas of intellectual property and commercial law.

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