Here is an excerpt of the transcript from a recent Mind Matters podcast episode, which you can listen to in full here. Lawyer and Walter Bradley Center Fellow Richard W. Stevens sat down with Robert J. Marks to discuss a Supreme Court Case regarding AI and copyright issues. Stevens helps us understand more of what the case is about and what’s at stake. For more on this, read about the court case’s conclusion here, as well as Marks’s commentary from Newsmax.

Richard Stevens: So to boil this down, the situation was this. A woman by the name of Lynn Goldsmith, a professional photographer, took a photo of the musician named Prince. Later, Andy Warhol was paid to produce an orange silkscreen portrait of Prince. And Andy Warhol made 16 different versions of this portrait using the original Goldsmith photo as the source. So you can kind of see what happened. You had a photo and then Warhol did his specialized work with it. Now, Goldsmith had given Vanity Fair magazine a license to use her original photo as an artist reference for illustration. That’s actual terminology.

So here’s a picture of the person, now draw what you want from it, that kind of thing. And you can do things like that. So that’s what they did here, is she gave the magazine that. And it was a one-time-only license. She did not give a license to make a bunch of copies of this thing. And so that’s kind of how it left. Well, down the road, years later, what happened was Goldsmith found out that the Andy Warhol Foundation had actually 16 of these Warhol prints made that were specialized, by Mr. Warhol himself. And she sued everybody involved. Andy Warhol, we’ll just say for simplicity. And sued them for making unauthorized copies with slight changes. And then publishing them and using them.

Fair Use?

And she alleged that these were derivative works. We’ll talk about what that term means as it has a special meaning. Now, the Andy Warhol people said, “No. What they did was fair use.” They had the photograph, but they were engaged in fair use. And fair use allows a person to use an otherwise copyright-protected thing for special kinds of uses. And it’s not considered an infringement of the copyright. So that was a situation, she said, “You made 16 copies of my work, and sold them and used them.” And the other side says, “Well, we are allowed to because we have fair use.” So the question that the court addressed was very narrow, if you read the decision, they expressly say, “We’re addressing one issue only.” So for example, in the fair use situation, in order to figure out whether someone has fair use, there are a number of different factors that you can consider.

But there’s kind of like the main one, well, I’ll tell you what they are. The first one is, you look at what the purpose and the character of the use of the copy is going to be. Is it going to be commercial, or nonprofit, or educational? Second one is, what kind of product it is. For example, is it a photograph? Is it music? That kind of thing. It can have an effect on the decision. How much of the original is used in the copy? If you use a tiny little fragment versus the whole thing. An example of that would be, for example, if you use two seconds from a song, have you in infringed on the copyright just two seconds? Probably not, because it’s too small. But that’s the arguable sort of thing. And also an important part of infringement, or fair use problem, is whether your use of the copy damages the market for the original. Or for the rights to the original.

So for example, if you were to create a portrait that was really terrific and you wanted to sell it. And you wanted to have autographed copies and someone else makes thousands of them, and then they sell them for 15 cents. And you were going to sell them for $1,000, well, you’ve just lost your market. And, so it wouldn’t be fair use for somebody to use your product in some way and destroy your market, or damage your market for it. So those are the four big things. But the only one really concerned here, in this case, was the purpose and character of the use. That’s the first fair use factor. And this is kind of a complicated thing. And it’s actually really interesting what we talk about when we talk about AI, and we talk about mind matters and the nature of thought and all the rest.

Derivative vs. Transformative: A Key Difference

Because what we get down to is distinguishing between two things, a “derivative work” or a “transformative work”. And these are terms that only a lawyer could love. Truly, it’s really mind-bending. So a derivative work, and this is going to make a difference in the case. But if it’s a derivative work, that means it’s basically this. In this situation, we’ll just talk about photographs. It’s Goldsmith’s photograph exactly the same, or approximately the same. Just, it’s real similar to the original. A transformative work is where you’ve taken the photograph and really modified it so much, used it in a totally or very different way. Instead of as a photograph, you’re using it in some other sort of context. And if it’s far enough away from just being a simple copy, then it’s called a transformative work. Well, it turns out the copyright law protects the owner against people infringing through derivative works. Because it allows the owner to retain their rights to derivative works. That’s basically copies and close copies, close reproductions. But they don’t necessarily have rights over transformative uses.

So, that’s kind of what the Supreme Court looked at was, well, is Andy Warhol’s very stylized use of the photograph of Prince from 1981? And if you go to the decision itself, you can actually see the photographs. It’s fun to look at. It’s one of the very few cases that actually has pictures in it. And you can see what Warhol did. And if you know Warhol’s work, you’re not surprised by what he did. But it’s Prince in a stylized way using the original photograph. And the question is, well, was that derivative? Or did Warhol transform it enough so that it’s no longer something that’s protected by the original copyright? Or it’s considered fair use because you changed it so much, you’re not using it anymore, just exactly the way the person who created it did. You’re using it in a very, very different way. And in this case, the court held, “Nope, they made copies.”