Fair Use at the U.S. Supreme Court? The Andy Warhol Case

By: Lauren Liu

In our modern society where information is exchanged at lightspeed and entertainment choices are abundant, copyright infringement has become a more widespread issue than ever. The 1976 Copyright Act harmonized copyright law with free-expression principles, and for the first time, incorporated the concept of “fair use.” If the use of a copyrighted work is “fair use,” then it does not infringe on the original author’s copyright. However, the Fair Use Doctrine, and even copyright as a whole, can seem very conflicting in terms of its purposes. On one hand, copyright offers exclusive rights to copyright owners to protect their work and profitability. On the other hand, the exception of fair use allows others to use and alter the original work without permission from the copyright owner. In 2022, the case alleging the Andy Warhol Foundation of copyright infringement was the center of copyright law. The case raises questions surrounding copyright law and the Fair Use Doctrine. How are we supposed to define the line between fair use and copyright infringement? How can we protect copyright without jeopardizing freedom of expression?

The Copyright Act of 1976 provides that “the fair use of a copyrighted work is not an infringement of copyright.” 17 U.S.C.A. § 107. To determine whether an allegedly infringing use is “fair use,” courts need to consider four factors: (1) the purpose and character of the use, including whether such use is of a commercial or for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used; and (4) the effect of the use upon the potential market for or value of the copyrighted work. The case of Andy Warhol Foundation for the Visual Arts, INC., v. Lynn Goldsmith involves the commercial licensing of a silkscreen image that Andy Warhol had created based on respondent Lynn Goldsmith’s copyrighted photograph. The Supreme Court of the United States recently granted this case certiorari. The question mainly focuses on the first element of fair use, and examines whether or not the petitioner, Andy Warhol Foundation (the Foundation), has established that its licensing of the silkscreen image was a “transformative” use, and that this factor should weigh in its favor. The Court will likely look closely at whether or not the transformative use can be established simply by showing that the image conveys a meaning or message different from that of respondent’s original photograph.

The Appellate Court’s decision focused on the first and most important statutory factor: the purpose and character of the use. The purpose of this factor is to distinguish the original creator’s use and the second author’s use of the original work. Although some copying of the original will often be necessary or at least useful in making the second author’s expression clearer and more effective, the second author has to demonstrate that the second work is unlikely to supersede the original. In this case, the Supreme Court will possibly find that the Foundation’s allegedly infringing use served the same purpose—depicting Prince in an article published by a popular magazine—for which Goldsmith’s photographs have frequently been used. Furthermore, although the Foundation argued that the Prince Series was intended for communicating a message about celebrity, the Foundation has not attempted to establish that it needed to reproduce the creative elements of the Goldsmith Photograph in order to communicate that message. The Supreme Court might find that when examining this factor and all other factors, the Foundation’s use of the original work does not meet the requirements for “fair use”, and will likely rule in favor of Goldsmith.

As the legal and artistic worlds wait for a final judgment from the Supreme Court, it is worth noting that the Appellate Court’s ruling and many other “fair use” cases have already created a balance between protecting copyrighted works and allowing other creative expressions. As one of the most popular and well-regarded modern artists, Andy Warhol’s works not only bring aesthetic values to the art world, but also inspire so much creativity. However, it is obvious that many of his works contain elements drawn from public figures and other existing works. Thus, his works can become quite controversial in terms of copyright law. More broadly speaking, in the artistic world, permitting secondary users to copy protected works to a certain degree will facilitate new and creative artistic expressions. However, when such copying becomes unnecessary for the secondary user’s work, the use risks jeopardizing the original author’s rights over the original art. Such unnecessary copying also risks diminishing artists’ incentive to create future original works. Although the fair use of copyrighted works has to be determined on a case-by-case basis, the doctrine helps avoid extreme exclusions or permissions in copyright infringement cases. Creative endeavors should not be deterred by a system that categorically precludes all unauthorized uses of copyrighted works, nor should they be protected by allowing indiscriminate copying.

No One Should Own Exclusively AI Generated Art

By: Jacob Alhadeff

On February 14, 2022, the Copyright Review Board (CRB) rejected Physicist Stephen Thaler’s claim for a copyright of his algorithm’s “authorship” because a “human being did not create the work.” On September 15, 2022, Kris Kashtanova received a copyright for their comic book Zarya of the Dawn, in which all of the art was AI generated, but Kris created the other aspects of the book. The difference in treatment is likely down to questions of originality, authorship, and simply that one work required human creativity while the other was effectively the work of a computer. Though these legal arguments are compelling in themselves, a necessary and implicit policy rationale seldom explicitly recognized by the law deserves highlighting — the relationship between work and incentives. Here, copyright incentivizes Kashtanova’s creative human work while reasonably denying that incentive to Thaler’s exclusively AI generated art. 

AI art, AKA generative art, uses machine learning (ML) algorithms that have been trained on billions of images frequently from licensed training sets and images publicly available on the internet. The images these algorithms use are frequently copyrighted or copyrightable. Users then type in a phrase, “carrot parrot,” for example, and a unique image is generated in seconds. Creating novel art can now be as simple as an image search on Google. This technology has been in the works for many years, but recently, platforms like DALL-E, Midjourney, and Stable Diffusion increased the volume of training data from millions to billions of parameters and the emergent result was an exponentially better output. In response, on October 17, 2022, Stable Diffusion announced the completion of a $101M seed round at a $1B valuation. Sequoia Capital then posted a blog suggesting that generative AI could create “trillions of dollars of economic value.” The future of Generative AI looms large, and at the very least promises to expose unexplored ambiguities in copyright. 

Functionally, in generative art there are two primary entities that may be incentivized through copyright — the programmer or the user. The programmer may have spent many hours writing and training the algorithm so that the algorithm may quickly create novel works of art. The user of the algorithm, on the other hand, is “the person who provides the necessary arrangements,” basically the person who prompts the program with a phrase. Providing either of these entities a copyright to exclusively generated art ineffectively balances incentives and ignores the purpose of copyright. 

Incentives and the Purpose of Copyright 

Copyright’s purpose is to “promote the progress of Science and useful Arts.” The Constitutional basis for copyright is therefore explicitly utilitarian. The Supreme Court has expanded on this language, suggesting that copyright’s purpose is to (1) “motivate the creative activity of authors and inventors by the provision of special reward” and (2) “to stimulate artistic creativity for the general public good.” Justice Ginsburg found that copyright’s dual purposes are mutually reinforcing because the public is served through copyright’s individual incentive. This mirrors James Madison’s claim regarding copyright, that “the public good fully coincides in both cases [copyright and patent] with the claims of individuals.” At its core, copyright is a monopoly-based incentive to create art to further public welfare. This incentive is at least implicitly predicated on the notion that creating valuable creative works is not easy, and therefore requires or deserves incentivizing. If improper law and policy are adopted, then Generative AI has the possibility to throw a wrench in this balancing of incentives.

The now rightfully defunct “sweat of the brow” copyright standard awarded a copyright partially because of the amount of work that went into the effort. One reason “sweat of the brow” was flawed was because it meant that facts themselves could be copyrighted if it took substantial work to attain those facts. The ability to copyright a fact “did not lend itself to support[ing] [] the public interest” and the standard was discarded. Though improper, the underlying concept was not entirely baseless. If the Constitutional purpose of copyright is to provide incentives to artists for public benefit, then copyright law must balance incentives, which implicitly balances work versus reward. 

Incentives are not absolute but are contextual and must at least tacitly recognize the difficulty of the act the incentive intends to induce. ‘Energy in’ must be somewhat commensurate with ‘value out’ — otherwise, the incentive structure is misaligned. This balancing of incentives is one of the reasons why a perpetual copyright is unconstitutional. If a copyright holder holds this monopoly right too long after its initial creation, they are rent-seeking, and the incentive that copyright provides far overshadows the public benefit. Rent-seeking is growing one’s wealth without “creating new wealth,” which has pernicious societal effects. For this reason, courts have determined that no amount of creativity, originality, or work merits an infinite monopoly on a creative work. 

Exclusively Generated Art Should Enter The Public Domain

Neither the user nor the programmer should receive a copyright for exclusively generated art, in part because doing so would misalign incentives. To be overly reductive, incentivizing someone to dedicate their life to an artistic craft requires a substantial incentive — a copyright for example. By contrast, if the effort required to create the art is effectively null (typing a prompt into generative AI), then the incentive required to promote the useful art is effectively null. As such, the law should not be reticent to reduce or eliminate the incentive for someone to type five words into a generative AI and provide a public benefit by creating exclusively generated art. Importantly, this reasoning excludes an artist’s creations that use generative AI as a tool or a component of their work – these artist’s works deserve copyright’s protection. Given that without any guarantee of copyright protection, over 1.5 million users are creating 2 million images a day using Dall-E, current evidence suggests that generative art users are not concerned about a monopoly on the economic returns for their creations. Lawmakers should not be concerned either. 

The owners of the generative AI algorithm should not receive a copyright for every work generated by their algorithm. Some in intellectual property suggest that AI generated art should be copyrightable because without protection, there will be a “chilling effect on investment in automated systems.” The argument is basically that if the owner of a generative art algorithm cannot hold a monopoly on the generated art, then there will be insufficient incentive to continue investing in automated systems. This ignores the concept of Software as a Service and the present reality that machine learning algorithms are currently effectively contributing to lucrative business models without guarantees of copyright protection. Relevantly, Stable Diffusion is valued at $1B.  

Further, a world where the algorithm’s owners automatically have a valid copyright claim could completely undermine the market for art. Similar to how no amount of work can justify a perpetual copyright, no amount of work could justify a handful of entities with machine learning algorithms copyrighting a substantial proportion of modern artistic creation. While generative art may simply become another tool for artistry, it is conceivable that someday the world’s human artists would not compare to the volume of work accomplished by ML algorithms. Lawmakers should not reduce artistic markets to whoever can create or purchase the most effective machine-learning algorithms.