Luna's Lexicon

Thursday morning, the Supreme Court released a highly anticipated ruling that Andy Warhol’s use of his identifiable style of silkscreen printmaking to create a portrait of Prince was not fair use and had infringed upon photographer Lynn Goldsmith’s copyright.

The Importance of IP License Scope

The scope of the intellectual property (IP) license is important because it determines the extent to which a licensee (in this case, Andy Warhol) is permitted to use the licensed material (here, Goldsmith’s photo) and how it can be used. The scope of the license defines the boundaries of what the licensee is allowed to do with the IP and what rights are granted to them.

In 1981, when Warhol used Goldsmith’s photo for the November 1984 issue of Vanity Fair, he did so with a valid license from Goldsmith. Having a valid license means that Goldsmith had granted Warhol the necessary rights and permissions to use the photo in a specific context and for the specific purpose of creating a color-treated portrait for that particular magazine publication.

However, the copyright issue arose when Warhol later created other unlicensed images using Goldsmith’s photo, which were not published until 2016 as a tribute to Prince. In this case, the Andy Warhol Foundation permitted the publication, but Goldsmith did not authorize or license this additional use, nor did she receive any credit or compensation for her original contribution.

The scope of the IP license determined whether Warhol’s license covered the creation and future use of the derivative works based on Goldsmith’s photo. A derivative work is a new work based on or derived from a preexisting work when it was created. In this case, the unlicensed images created by Warhol are derivative of Goldsmith’s original copyright. If the scope of the license does not explicitly grant a licensee the right to create derivative works, then any derivative works created would violate the original copyright holder’s IP rights, as the Warhol Foundation violated Goldsmith’s IP rights by creating and publishing those images without her permission.

This decision demonstrates how the scope of the IP license is crucial in determining the rights and limitations of the licensee, ensuring that the original creator’s rights are respected, and determining the need for authorization, credit, and compensation for any further use or derivative works based on the licensed material.

What is fair use?

Fair use is a legal doctrine that allows for some legal infringement of copyrighted material without obtaining permission from the copyright owner. The doctrine is where the defense’s argument was relevant because it meant there was potential for the Andy Warhol Foundation to infringe on Goldsmith’s copyright legally. It is based on the principle that certain uses of copyrighted material should be considered fair and not infringe upon the copyright holder’s rights. It balances the rights of copyright holders and the public’s interest in accessing and using copyrighted works for certain purposes. Fair use allows for activities like criticism, comment, news reporting, teaching, scholarship, and research. Four factors are weighed together to determine if the use qualifies as fair:

1. The purpose and character of the use, specifically looking to commercial or nonprofit educational purposes.
2. The nature of the copyrighted work.
3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole.
4. The effect of the use on the potential market or value of the copyrighted work.

Implications of the recent ruling on IP Licensing

This decision reinforces the importance of obtaining proper licenses and permissions to use copyrighted material. The ruling underscores the need for licensors and licensees to define and negotiate the scope of IP licenses carefully. It emphasizes that licenses should explicitly outline the permitted uses of the licensed material, including any limitations on creating derivative works or using the material in different contexts. The scope of the license should align with the intentions and permissions granted by the copyright owner.

Moving forward, this ruling may lead to increased scrutiny and caution regarding creating and using derivative works based on copyrighted material. Licensors may seek more specific and comprehensive agreements to ensure the protection of their IP rights and that unauthorized use or infringement does not occur.

On the other hand, licensees will need to be diligent in obtaining appropriate licenses for the use of copyrighted material and ensuring that their actions fall within the permitted scope. They may also need to consider seeking additional permissions or licenses if intending to create derivative works or use the material in new or different ways.

Overall, the ruling highlights the significance of IP licensing in maintaining a balance between the rights of copyright owners and the interests of those who wish to use copyrighted material. It serves as a reminder that careful consideration and negotiation of the scope of IP licenses are crucial to avoid future infringements and legal disputes.