Authors Alliance thanks our research assistant, Derek Chipman, for his contributions to this blog post.

Last Monday, the Supreme Court granted certiorari in Warhol Foundation v. Goldsmith, a fair use case involving screen printed images, referred to as the Prince Series, created by the late artist Andy Warhol depicting the late musician Prince. The series is based on a photograph by Lynn Goldsmith, a famed celebrity photographer. Authors Alliance has previously written about the case and its central issue of “transformativeness” last year as part of our update on fair use decisions from 2021. The Supreme Court’s eventual decision could have a large impact on how courts across the country interpret the doctrine of fair use, and consequently, on authors’ ability to rely on this important doctrine. This post is intended to both recap the case and provide context about Supreme Court precedent on fair use and transformativeness to keep our readers informed as the case progresses.

The screen-printed images at issue in the case were created after a first image was commissioned by Vanity Fair based on the photograph by Goldsmith, authorized pursuant to separate agreements between Vanity Fair and Goldsmith and Vanity Fair and Warhol. The authorized Warhol image appeared in the magazine in 1984 and included credit for both Goldsmith and Warhol. However, Warhol went on to create fourteen additional works of the image in the same style, which are the subject of the litigation.

After learning of the additional images after Prince’s death, Goldsmith sued the Warhol Foundation for infringement in New York district court, alleging that the Prince Series infringed her copyright in the photograph of Prince. In its decision, the district court found for the Warhol Foundation on fair use grounds, focusing on the transformative nature of Warhol’s silkscreen prints which the court stated “transformed Prince from a vulnerable, uncomfortable person” as seen in Goldsmith’s photograph “to an iconic larger-than-life-figure” as depicted in Warhol’s series by changing the original image from a black and white, three-dimensional representation into two dimensional, colorful representations. 

Goldsmith appealed the district court’s ruling to the Second Circuit, which overturned the district court’s finding of fair use, disagreeing that Warhol’s work was transformative. The Second Circuit believed that the district court improperly took the role of “art critic,” making an artistic determination that Warhol’s works were transformative, rather than comparing the elements of the images and their purposes and characters. Under this approach, the Second Circuit concluded that the work retained “essential elements” of Goldsmith’s photograph and was functionally the same work with a new aesthetic. The Second Circuit’s ruling bore factual similarities to its decision in Rogers v. Koons, where the court decided that a celebrated artist’s colorful image based on a black and white photograph was not fair use. 

After the decision was handed down, the Warhol Foundation requested a re-hearing in the Second Circuit, asking the court to consider the impact of Google v. Oracle, a Supreme Court fair use case which was handed down shortly after the original Second Circuit opinion (and which Authors Alliance also covered as part of our fair use in the courts in 2021 update). The Second Circuit granted re-hearing and issued an amended opinion. Unfortunately for the Warhol Foundation, this amended opinion dismissed Google v. Oracle as not applicable to the case at hand, and did not change the essential holding that Warhol’s use of Goldsmith’s photograph was not a fair one.

Then, the Warhol Foundation sought certiorari to the Supreme Court, arguing that the Second Circuit’s ruling had “hollowed out” fair use defenses and would have a chilling effect on artists transforming existing works as well as art galleries displaying works. It further argued that the Second’s Circuit ruling conflicted with a Ninth Circuit standard of transformativeness set forth in Seltzer v. Greenday, which stated that a work can be transformative even if that work “makes few physical changes to the original.” In that case, the Ninth Circuit stated that a work like Warhol’s can be transformative if “new expressive content or [a new message] is apparent.” The Warhol Foundation asked the Supreme Court to hear the issue as it created a different standard of fair use between the two circuits where over half of copyright cases are filed, and hoped the Court would clarify the proper approach and resolve the split. The Warhol Foundation further argued that the Second Circuit’s standard conflicted with the Supreme Court’s own precedent on fair use and transformativeness, particularly Campbell v. Acuff-Rose Music and Google v. Oracle.

The Supreme Court’s precedent under the transformativeness doctrine can be traced to its 1994 decision Campbell v. Acuff-Rose Music, which found that the transformative use of a copyrighted work in sampling a small portion of a song was an important factor in its fair-use analysis. The Court reasoned that if under the first factor, purpose and character, the more transformative the work the less significant the other three factors, thus the less likely it would be found to be infringing. The more recent Google v. Oracle took a broader approach to fair-use than the one recently used by the Second Circuit, where the court found that Google copying a portion of a software code was transformative as it created a new platform offering a “new collection of tasks operating in a distinct and different computing environment.” However, it remains unclear whether this approach would apply to works beyond software interfaces.

Now that the Supreme Court has granted certiorari in Warhol Foundation v. Goldsmith, its ruling could have a large impact on the state of fair use and the transformativeness doctrine. The Court could agree with the broader standard used by the Ninth Circuit or the more restrictive standard of the Second Circuit, it could clarify that its approach in Google applies beyond software, or it could even articulate a different standard that could reshape transformativeness as we know it. Authors Alliance will keep our readers apprised of any updates as this important case moves forward.

Yesterday, Authors Alliance joined 31 other organizations and individuals in alerting members of Congress about serious problems with the new proposed Strengthening Measures to Advance Rights Technologies (SMART) Copyright Act of 2022. Authors Alliance previously voiced our disapproval of the proposal for the simple reason that it would not serve the interests of all authors, including many of our members. In a letter addressed to Senators Patrick Leahy and Thom Tillis, the bills’ sponsors, the signatories explained why the SMART Act is problematic and would not serve the creators that copyright is designed to protect. You can find the full text of the letter here.

First, the letter explains that the changes the bill would make to the Digital Millennium Copyright Act (“DMCA”) would narrow the scope of “safe harbors,” which limit an online service provider’s copyright liability for the infringing activity of users. This is because standard technical measures could be required under the SMART Copyright Act in order for online service providers to maintain this limitation on liability. DMCA safe harbors are considered by many to be essential for fostering innovation and creativity online, and eroding these safe harbors threatens to “inject uncertainty into a law that has . . . supported creators, rightsholders, consumers, and online service providers of all kinds.”

Second, the letter points out that mandating designated technical protection measures for online service providers, as the bill contemplates, is beyond the Copyright Office’s expertise, as it would “transform[] [the Office] into an Internet regulator with responsibility for overseeing an elaborate, multi-agency bureaucratic process.” The Copyright Office as reimagined by the SMART Act would have very broad authority over online speech, an area that is also not within its traditional sphere of expertise. While the SMART Copyright Act would also add a new “Chief Technology Advisor” to the Copyright Office, this is not enough to overcome the Office’s limited expertise in this area.

Lastly, the letter argued that mandating designated technical protection measures is not needed to combat copyright infringement online. Digital service providers are already “fine tuning their voluntary efforts to combat infringement online . . . and they have done so with tremendous success.” The SMART Copyright Act would have the effect of “freez[ing] these efforts” for years at a time because it envisions a triennial process, similar to the triennial rulemaking for exemptions to the DMCA’s prohibition on breaking digital locks. Malicious infringers could quickly find workarounds for the mandated designated technical protection measures, and service providers would be unable to alter their technical protection measures to prevent such infringement if these were government mandated, as the SMART Act proposes.

Authors Alliance will be monitoring the progress of the SMART Copyright Act of 2022 and will keep our readers appraised of any new developments.

Last week, Senators Thom Tillis and Patrick Leahy introduced new legislation regarding technical protection measures used to protect copyrighted works online, entitled the Strengthening Measures to Advance Rights Technologies (SMART) Copyright Act of 2022. This new legislative proposal represents the latest in a multi-pronged effort to fortify protections for copyrighted works online (coming on the heels of the Copyright Office’s recent notice of inquiry about the development of technical protection measures, about which Authors Alliance submitted a comment). If passed, the SMART Copyright Act of 2022 would establish a procedure for the Librarian of Congress to designate standardized protection measures (“STMs”) to be adopted by online service providers. 

Authors Alliance strongly opposes the SMART Copyright Act of 2022. By requiring that digital platforms and service providers implement technical protection measures which could monitor content uploaded by users, the SMART Copyright Act of 2022 could lead to content “filtering mandate[s]” interfering with authors’ and other creators’ abilities to speak freely online. Authors and creators are the parties that copyright law is designed to protect, making the proposal one that is inconsistent with the very purposes of copyright. 

The SMART Copyright Act of 2022 would enable the Librarian of Congress to designate STMs to be implemented across industries, supposedly based on input from a diverse group of stakeholders. While the bill’s sponsors claim that the legislation “ensures that any designation of existing measures requires input from all stakeholders and assessment of public interest considerations,” it is telling that groups representing the content industry have praised the proposed legislation, while proponents of fair use and the free exchange of knowledge have opposed it. Even if the Copyright Office were to develop STMs that reflect a broad consensus across a diverse group of stakeholders, this would leave out the stakeholders who do not favor the widespread implementation of STMs in the first place (like Authors Alliance). Mandating that service providers use content moderating technology would impede the free flow of information and would not serve the interests of authors and creators who prioritize seeing their works reach wide audiences. 

To make matters worse, it is unclear that the Copyright Office possesses the technical expertise to evaluate and implement STMs. While the bill contemplates a new Chief Technology Officer within the Copyright Office to help develop such expertise, historically, the Copyright Office has not demonstrated that it has the technical expertise to wade into and settle questions about technical, complicated matters such as STMs. 

In the words of Public Knowledge policy counsel, Nicholas Garcia, “this proposal ​​would be disastrous for a free, creative, and culturally rich internet. Unfortunately, the SMART Act is anything but.” Because 2022 is an election year, it has been speculated that the SMART Act of 2022 is unlikely to pass during this legislative session. And Senator Leahy is planning to retire at the end of his term, meaning that Senator Tillis would need to find a new co-sponsor for the bill in future legislative sessions were to be reintroduced. Authors Alliance will be monitoring the bill’s progress, and will keep our readers informed about any further updates.

On February 24, the Supreme Court issued a decision in Unicolors v. H&M, a case concerning copyright registration and legal errors made in applications for copyright registration. In the case, Unicolors, a fabric design firm, sued H&M, a popular clothing retailer, for infringing its copyright in certain fabric designs. In response, H&M asserted that Unicolors did not hold a valid copyright in the designs since there were legal errors in its copyright registration application. Specifically, Unicolors had registered multiple works in a single application under a regulation requiring that those works be used “in the same unit of publication,” but then made the different fabric designs from the group application available separately. While registering a copyright is not necessary in order to obtain copyright protection, it is required that a copyright holder register her copyright in order to bring a civil action for infringement, as Unicolors had done here. An appeals court had found that the legal error made in Unicolors’s application invalidated its copyright registration, making it unable to sue for infringement, but the Supreme Court overturned this finding, paving the way for Unicolors to pursue its infringement action.

U.S. copyright law already permitted registration applications to be treated as valid when there are inadvertent factual errors in the application, but the question of whether inadvertent legal errors could invalidate a registration was one of first impression for the Court. In a majority opinion by Justice Breyer, it held that inadvertent legal errors on copyright registration applications are excusable and do not invalidate the registration. Instead, the Court found that “actual knowledge” of the legal error(s) on copyright registration applications was needed in order to invalidate the registration. Therefore, Unicolors’s legal errors on its application for copyright registration, which were not made with actual knowledge, did not invalidate its registration, making its copyright valid. While all of this may seem to fall squarely into the realm of arcane technicalities, it is worth noting that the Supreme Court does not tackle many copyright issues. This new decision by the country’s highest court reminds us that copyright law is subject to judicial interpretation at all levels rather than being fixed and inflexible. 

While some commenters have argued that the case will have little relevance going forward, since it concerned a very narrow question, Unicolors’s attorney called the decision “a big win for artists and poets,” as these creators “can now enforce their copyrights without fear that blatant infringers will skate on a technicality[.]” Indeed, by finding legal errors in registration application to be excusable when they are not made knowingly, the Supreme Court may make it harder for parties to challenge copyright ownership based on errors made in registration in order to escape liability for infringement. Less sophisticated parties—like individual creators—are perhaps more likely to make innocent errors in copyright registration applications. Whether this case will prove to be a “win” for creators is unknown, but Authors Alliance will keep our members and readers apprised about further developments as lower courts apply and react to this new principle.

We are grateful to Authors Alliance’s research assistant, Derek Chipman, for authoring this post.

The legal battle about Maryland’s e-book lending law continued January 28^th as the Association of American Publishers (AAP) replied to the state of Maryland’s motion to dismiss its suit. Authors Alliance has covered Maryland’s e-book lending law and the ensuing litigation previously, but to recap: the law would require publishers who license e-books to consumers in Maryland to also offer a license on “reasonable terms” to public libraries in the state. This law and other proposed state laws like it were motivated in part by the fact that libraries are often charged much higher prices than consumers for digital literary products. Before the Maryland law took effect on January 1^st of this year, the AAP promptly filed suit to block it. In today’ blog post, we will summarize the latest filings in this lawsuit, which Authors Alliance has been following closely.

In its lawsuit, the AAP seeks a declaratory judgement that Maryland’s e-book lending law is preempted by federal copyright law as well as a temporary and permanent injunction to stop its enforcement. See our recent blog post for a thorough explanation and analysis of the AAP’s preemption argument. AAP’s most recent filing is a reply is to a motion filed by the State of Maryland on January 14^th that sought to have the lawsuit dismissed.

Maryland’s motion to dismiss mainly focuses on framing the bill as a “modest” consumer protection law that does not conflict with federal copyright law. The motion to dismiss focuses on Maryland’s legitimate power to regulate market practices within the state and disagrees with the AAP’s argument that the law functions as a “compulsory license” that runs afoul of the right granted by the federal government to copyright holders. It argues that the bill only requires publishers to “offer to license” e-books to Maryland libraries and does not give libraries any right to dictate terms. Maryland seeks to establish that there is no conflict or inconsistency between copyright law and its e-book lending bill, stating that the bill only seeks to prevent some publishers from “capitalizing on the digital revolution at libraries’ expense.” Maryland further states the bill is consistent with the Copyright Act, working to ensure “that publishers and libraries work together toward mutually acceptable license [terms].” If the judge in the case grants Maryland’s motion, the case and its bid for an injunction would be dismissed, though the AAP could appeal such a ruling.

The AAP’s reply on the other hand, doubles down on its preemption argument and argues that the court should not grant the motion to dismiss and should instead temporarily block the bill from taking effect. The AAP argues that the e-book marketplace is working fine and what Maryland characterizes as “exploitative practices” are standard practices developed over decades by those exercising their exclusive rights under copyright law. The AAP argues that Maryland is attempting to “get more for less” and that the law functions as a compulsory license that infringes on a rightsholder’s right to refrain from entering into commercial transactions (the decision not to grant a license). The AAP further argues that the issue of equitable access is irrelevant and only used by Maryland to “justify an unrelated, preempted, and unconstitutional legislative effort.” The AAP argues that its arguments are strong enough to warrant the extraordinary measure of a preliminary injunction, which would block the law from taking effect while the lawsuit proceeds.

Since the motion and reply were filed, the parties participated in a virtual hearing last week, and Judge Deborah L. Boardman is expected to reach a decision on the AAP’s motion for a preliminary injunction soon. In the hearing, the parties reiterated the arguments made in their briefs. Maryland’s assistant attorney general argued that the statute sought to seek a balance between the interest of rightsholders and the need for equitable access to digital literary products. AAP’s counsel, on the other hand, persisted in arguing that this state legislation intruded into the role of the Congress in establishing U.S. copyright law.

Public-minded authors may find these proceedings and their outcome important, as the lawsuit showcases the tension between libraries and publishers over e-book licensing and equitable access. Authors who want to see their works reach the broadest possible audiences may be surprised to learn how difficult it can be for libraries to acquire digital versions of works compared to physical copies. The legislative efforts by some states are also motivated by the difficulties arising from access to libraries and the increased recognition of the importance of digital mediums since the onset of COVID-19. The outcome of this case could either embolden or weaken equitable access efforts nationwide, as it will inevitably influence how legislators perceive whether such bills are preempted, like the Governor of New York’s veto of a similar bill. While the equitable access argument was dismissed in the AAP’s reply, it was a driving force behind Maryland’s bill and an important issue for authors who want to be read as widely as possible. Authors Alliance will continue to monitor the litigation and provide further updates as the case moves forward.

This week, Authors Alliance submitted a comment to the Copyright Office in response to its recent notice of inquiry (“NOI”) regarding the development of technical measures used to identify or protect copyrighted works available online. Analogous to digital watermarks, these measures can be used by rightsholders to block or limit access to a work or onward uses of that work. In its NOI, the Copyright Office asked stakeholders to comment on their experience with and views on these technical measures.

Authors Alliance’s comment focused on the interests of authors who are not served by the widespread deployment of technical measures to protect works online. Many authors make their own works available on an open access basis without the use of technical measures to block access or onward uses, and the choice to not employ technical measures helps these authors reach their dissemination goals. Moreover, existing technical measures already hamper many authors’ ability to make fair uses of works available online. Authors Alliance emphasized this in our comment in order to show that additional technical measures, or more burdensome measures, would make this situation even worse.

Finally, we argued in our comment that the development of technical measures to protect copyrighted works online should be a process that incorporates the different views of diverse stakeholders. Oftentimes, proponents of stronger technical measures are the loudest voices in this conversation, steering the outcome toward fortifying these measures and leaving out the community of organizations, institutions, and users who do not favor stronger technical measures. We explained that technical measures should be technically neutral and voluntarily adopted in order to be fair to all of these parties.

The Copyright Office has also signaled that this will not be the last investigation into technical measures: in the coming months, it will open a second call for comments about the standardization of these technical measures deployed by rightsholders. We will keep our readers appraised of further developments as the process moves forward.

Read our full comment here.

The following blog post was authored by Becca Lynch, a student clinician with the Samuelson-Glushko Technology Law & Policy Clinic at University of Colorado Boulder under the supervision of Professor Blake Reid, as part of an Authors Alliance student clinic project on library e-book licensing legislation.

Over the past year, various state bills have been proposed that would require publishers to license e-books to public libraries under “reasonable terms,” the most notable of which being the Maryland bill, which passed and was set to take effect on January 1, 2022.

As the pandemic has shown, the importance of public libraries cannot be understated. As a tax-funded institution created solely for public benefit, regulation of e-book licensing terms is important for the sustainability of libraries’ e-book lending. 

On December 9^, 2021, the Association of American Publishers (“AAP”) announced its filing of a lawsuit attempting to keep the Maryland bill from taking effect, and on January 14, the state of Maryland asked the court to dismiss the lawsuit. As this bill is the only bill of its type currently set to take effect, the outcome of this lawsuit could trigger similar lawsuits against other such proposed bills, such as the one currently pending in Rhode Island. While New York passed a similar bill last year, Governor Kathy Hochul recently vetoed the bill, citing the possibility of preemption as a reason for doing so.

The primary component of AAP’s complaint against the Maryland bill is its supposed preemption. “Preemption” is a legal doctrine which applies to block state laws when those state laws are not compatible with federal law. But, contrary to both AAP’s complaint and the United States Copyright Office’s initial letter on the matter, a conflict preemption analysis (which applies when state and federal laws actually conflict) does not provide a clear answer, nor is the handling of conflict preemption by courts a straightforward matter.

Courts have used a wide range of possible approaches to preemption analysis in the context of federal copyright law, the primary ones being (I) a balancing test from a case called In Re Jackson when the state law is alleged to conflict with U.S. copyright law, (II) deference to certain state market interests, and (III) examination of physical impossibility of compliance with both federal and state regulations. As a result, understanding and predicting the analytical approach a judge may take based on those available is a rather complicated process.

The test from In Re Jackson involves balancing a state’s interests (distinct from the interests of copyright law) against the potential for conflict between the relevant state law and federal copyright law. Under this test, the more substantial the state law interest undergirding the state law, the stronger the case is to allow that right to exist alongside federal copyright law. Moreover, there needs to be additional evidence to show that a claim arising from violation of the state law is more than a simple copyright infringement claim in order for the state law to not be preempted.

Under the second approach, deference to state market interests, courts consider whether there are significant state market interests animating the state law. Courts tend to allow state regulations that are designed to ensure a fair market, while finding that copyright law preempts state laws which force a copyright holder to distribute and license her work against her will.

The third approach is one where courts find that federal copyright law preempts state law in situations where compliance with both state law and federal law is impossible. In this situation, since the state e-book licensing laws do not deprive the publishers of their exclusive right to license e-books, complying with both state law and federal copyright law is not impossible. The publishers retain their exclusive rights and maintain control over the decision to license e-books to the general public. Only upon exercising this right must they abide by the reasonable terms within the state licensing law. 

Maryland’s interests motivating its e-book licensing bills is simple, yet compelling: ensuring its citizens have access to culturally and socially significant creative works in the form of e-books. In addition, the law seeks to remedy an inequitable market situation by preventing publishers from abusing their market power to overcharge tax-funded public libraries. These interests are both substantial and distinct from those undergirding copyright law (which include, for example, incentivizing the creation of new creative works). The Maryland state bill would be enforced under state deceptive and unfair trade practice law, and as a result, the elements for bringing a claim under state law would contain much different elements than one under copyright law.

Ultimately, regardless of the analysis used, there is strong evidence that supports a finding that the e-book licensing bills are not preempted by federal copyright law under an implied conflict preemption analysis. 

Although this lawsuit is still in its early stages, Authors Alliance will be monitoring its progress and keeping our members apprised of updates in the case.