Copyright and freedom of use – the Warhol case

In May 2023, the US Supreme Court surprisingly restricted artistic creativity in favor of broad copyright protection.

This article first explains how the Supreme Court limited the scope of permissible re-use. It then outlines current approaches in German case law regarding the adaptation and transformation of copyrighted works.

The doctrine of fair use in US law

The decision of the US Supreme Court was based on a portrait of the musician Prince that Andy Warhol produced as a silkscreen from a photograph taken by the plaintiff, Lynn Goldsmith. By licensing “Orange Prince” to the media company Condé Nast, the Andy Warhol Foundation had infringed the photographer’s copyrights.

The legal issue was the doctrine of fair use. This is set out in Section 107 of the US Copyright Act. The fair use doctrine is a four-factor test of whether a copyrighted work has been fairly used: (1) the purpose and character of the use; (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; and (4) the effect of the use on the potential market for or value of the copyrighted work.

The Supreme Court looked at the first factor. This factor considers whether the new work is being used for commercial or nonprofit educational purposes, and whether the transformation has added something new, such as an additional purpose or a change in character. Based on these criteria, the court rejected fair use and thus upheld Goldsmith’s claim. The key factor was that Warhol’s work had been used commercially. Furthermore, the modified portrait did not represent something fundamentally different or new. Not every slightly modified copy could enjoy copyright protection, otherwise it would be circumvented and thus undermined.

The court of first instance had accepted fair use on the grounds that Warhol had changed the character of the photograph. This is because Prince appears vulnerable in the photograph, but iconic in the image. The work was therefore immediately identifiable as a “Warhol” work. Supreme Court Justice Kagan’s minority opinion also follows the classic utilitarian approach. She fears that the majority decision will stifle creative progress and undermine creative freedom.

Free use and copyright limitations in German law

In Germany, two approaches to such borderline cases – between exclusivity and freedom of access – are currently conceivable:

First, the approach of the Federal Court of Justice: For adaptations or other modifications of a work, Section 23(1) Act on Copyright and Related Rights (UrhG) provides that the author’s consent is not required only if the newly created work maintains a sufficient distance to the work used. According to the Porsche 911 decision of the Federal Court of Justice, this so-called free use requires that “in view of the uniqueness of the new work, the borrowed personal characteristics of the protected older work fade away”. Fading in this sense occurs when the new work is so distant that the personal characteristics of the old work recede. The use of the older work may only appear as an inspiration for a new, independent work (BGH, judgement of 7 April 2022 – I ZR 222/20, § 43). In some instances, this case law even permits the clear adoption of the older work, provided that this is necessary for the artistic creation.

The Higher Regional Court of Hamburg recently took a different approach: the reproduction of the song “Metall auf Metall” and its transformation into an independent new work by means of sampling falls under the term pastiche within the meaning of Section 51a UrhG and is therefore a legally permissible use (judgement of 28 April 2022 – 5 U 48/05). The Federal Court of Justice stayed the subsequent appeal proceedings (case I ZR 74/22) and referred the question to the European Court of Justice.

Whichever way you look at it, the BGH and OLG Hamburg seem to have internalized the mantra “Cultural creation must build on the earlier work of other authors” more than the US Supreme Court. Over here in Germany, the Warhol case might have ended differently.