Part 3 of the McNees Wallace & Nurick series: Intellectual Property’s 2022 in Review
HOW ANDY WARHOL STILL SHAPE AMERICAN COPYRIGHT LAW
In October 2022, the US Supreme Court heard arguments over whether pop artist Andy Warhol’s artwork appropriately used a photograph of a music legend, Prince Andy Warhol Foundation for the Visual Arts, Inc. v. Lynn Goldsmith. This case is important because it can provide additional guidance in the very murky realm of transformative use under copyright law.
Lynn Goldsmith photographed Prince at a concert at the Palladium in New York City in 1981. In 1984, Goldsmith licensed through Lynn Goldsmith, Ltd. (“LGL”) the photo to Vanity Fair magazine for use as an artist reference. Vanity Fair commissioned Warhol to create an image of Prince for their November 1984 issue. Warhol created a series of screenprints and pencil illustrations based on Goldsmith’s copyrighted image of Prince. Warhol made some aesthetic changes to Goldsmith’s original photograph, but the images “recognisably derived” from Goldsmith’s original work. Goldsmith sued the Andy Warhol Foundation for copyright infringement. The District Court for the Southern District of New York issued summary judgment for the Foundation, concluding that Warhol “transformed” the original photograph, giving it a new “meaning and message.” The US Court of Appeals for the Second Circuit vacated the district court’s summary judgment order against the Foundation regarding its claim for a fair use determination and the district court’s dismissal of defendant’s counterclaim of copyright infringement.
During the October 2022 US Supreme Court hearing, attorneys for the Andy Warhol Foundation argued that the late pop artist’s replicated images of Goldsmith’s photographs of Prince fell under the fair use doctrine of copyright laws. The foundation also argued that Warhol Goldsmith did not have to pay a license fee to publish the images because the artist’s work had a different meaning than the original photograph taken by Goldsmith. Goldsmith’s attorneys argued that simply because Warhol applied his distinctive style to the photograph, the foundation did not have the right to use Goldsmith’s image without paying a royalty. They stated that the Andy Warhol Foundation “never gave a reason for copying Ms. Goldsmith’s image to commercially license Warhol’s Orange Prince in 2016. In fact, Warhol did not receive the picture until 1984 because Ms. Goldsmith was paid and credited.”
The verdict in this case is due by the end of June 2023. This is the first non-software fair use case the High Court has heard in a long time, and the first time since 1994 that it will rule on fair use in art. This case could have far-reaching implications for artists and creators of material that inspires other works. In the county and county courts, there has been a shift from expansive views of what constitutes transformative work to a narrower approach. This case offers the judges an opportunity to clarify the fair use test and provide more guidance on ‘transformability’.
IS COPYING AND PASTEING AN INSTAGRAM POST INTO A THIRD PARTY SITE COPYRIGHT INFRINGEMENT?
In Hunley v. Instagram, LLC, Alexis Hunley and Matthew Brauer sued Instagram, LLC for copyright infringement in the US District Court for the Northern District of California. Hunley is a user of the popular social media platform that allows users to post and share videos and photos. Hunley’s allegation is based on the fact that Instagram uses an “embed tool” that allows third parties to copy and paste an Instagram user’s post into their own website and view it at the same time. Hunley therefore argued that the third parties committed copyright infringements on their Instagram posts, making Instagram, which provided the embed tool, secondarily liable for this infringement.
Does offering an embed tool that allows third parties to view copyrighted photos or videos violate copyright infringement? The federal courts in California must apply the 2007 ruling Perfect 10, Inc. vs. Amazon.com, Inc. to determine what constitutes copyright infringement. Under the perfect 10 “Server test” If a website operator does not store an image or video in the traditional sense, the website operator does not transmit a copy of the image or video and thus does not violate the exclusive display right of the copyright owner. That is, the copyright owner’s image must be stored on a computer server (or hard drive or other storage device) in order for the image’s display to constitute a copy of the image under copyright law.
The district court twice granted Instagram’s motion to dismiss (following an amended lawsuit) because the third parties using Instagram’s embed tool to display the copyrighted photos and videos did not store the photos and videos, only displayed them. So under the perfect 10 Servertest found no underlying copyright infringement by the third party and therefore Instagram could not be held secondary liable for copyright infringement. Ultimately, the Hunley District Court recommended that this case be referred to the United States Court of Appeals for the Ninth Circuit for review so that the perfect 10 Rules might be reviewed in light of this new era of internet and social media.
The ruling in this case highlights social media best practices when using content found on social media sites. The Ninth Circuit Court’s decision in this case could affect how other courts across the country will respond to similar copyright infringement cases. When using embedding tools and/or copying and displaying content from social media or other websites, users must consider whether they need to obtain rights from the content owners or from people or brands depicted in the content.
IT TURNS IGNORANCE IS AN EXCUSE TO THE LAW
In Unicolors, Inc. v H&M Hennes & Mauritz, LP, Unicolors sued H&M for copyright infringement in 2015, claiming that H&M’s design was remarkably similar to his design. Unicolors registered its copyright in 2011 in a single application involving multiple works. Unicolors knew these works were not in the same release unit, but submitted a single application, not multiple applications, to save money. Under current US Copyright Office rules, a single application is only allowed if all works are part of the same publication and Unicolors would therefore have had to file several different requests. The record reflects that Unicolors was unaware that listing multiple works in a single application does not meet the “single release unit” requirement.
Generally, a valid copyright registration is a prerequisite for a copyright infringement claim. What if the registry contained inaccurate information? Copyright law includes a safe harbor provision that a registration certificate meets the requirements – and is therefore valid – regardless of whether the certificate contains inaccurate information. However, this safe harbor protection will not be triggered if the inaccurate information was included “with knowledge of the inaccuracy”.
After Unicolors won a jury trial, the US Court of Appeals for the Ninth Circuit ruled on appeal that the registration was invalid and the safe harbor provision did not apply because it only protected an error of fact, and Unicolors knew these works were not invalid in the same publication unit. The US Supreme Court disagreed, ruling that the safe harbor provision does not distinguish between an error of law and an error of fact, and lack of knowledge of fact or law can excuse an inaccuracy in a copyright registration. In addition, the Supreme Court held that knowledge means actual, subjective awareness of both facts and law. This restored the validity of the registration.
While the Unicolors decision provides some safety net for copyright applicants who make unintentional mistakes in their applications, properly filing an application can avoid raising doubts about the validity of the resulting registration and reduce a registrant’s time and expense in trying force an incorrect registration. Typically, securing a copyright registration is the most cost-effective form of intellectual property registration; Therefore, an experienced copyright attorney should be able to ensure protection correctly and at a reasonable cost.
McNees’ Intellectual Property team closely monitors these and other key cases in patent law. If you have questions about the case studies discussed in this article, attorneys Brian Gregg, Yangmo (“Harvey”) Ahn, and Philip Petrina are available to discuss these and other copyright issues. We help our clients navigate the myriad legal issues that arise from new and exciting developments in intellectual property law and provide insights on how best to gain and maintain a competitive advantage through the use and protection of intellectual property and technology .
Part 1 – Trademark Law Summary 2022: NFTs, Distinct Branding and the First Amendment
Part 2 – Summary of Patent Law 2022: IPR Argumentation Strategy, Artificial Intelligence and Forum Choice Clauses
© 2023 McNees Wallace & Nurick LLC
This article is presented with the understanding that the publisher is not rendering any specific legal, accounting or other professional service to the reader. Due to the rapidly changing legal situation, the information contained in this publication may be out of date. Anyone using this material must always research the original sources of authority and update this information to ensure accuracy and applicability to specific legal matters. In no event shall the authors, reviewers or publisher be liable for any direct, indirect or consequential damages allegedly resulting from the use of this material.