In the span of two weeks, decisions from the Supreme Court and the Court of Appeals for the Second Circuit manifest the complex nature of the copyright doctrine of fair use and how its contextual application can lead to opposite results. In Google v. Oracle, the Supreme Court held that Google’s copying, verbatim, of Oracle’s Java Application Programming Interfacing (“API”) was fair use because Google took “only what was needed to allow [programmers] to put their accrued talents to work in a new and transformative program.”1 In contrast, just several days beforehand, the Second Circuit determined that a series of Andy Warhol illustrations of the musician Prince were not a fair use of a photograph on which the series was based.2 The Second Circuit’s opinion followed a trend of certain circuit courts in highlighting economic factors in the analysis of the fair use defense.3 The Supreme Court balanced all the elements and notwithstanding the economics found fair use in favor of Google.
The Constitution grants Congress the power to make copyright laws “[t]o promote the Progress of Science and useful Arts.”4 The first Congress exercised this power by enacting the Copyright Act of 1790, which was subsequently amended by the Copyright Act of 1976.5
Since, “every book in literature, science and art, borrows, and must necessarily borrow, and use much which was well known and used before,”6 courts, and later Congress, have long recognized the need to carve out certain uses from copyright protection. The fair use doctrine aims to effectuate the Constitution’s goal of artistic progress by balancing the intellectual property rights to the fruits of one’s labor and the free expression of society to reference the works of others.7
Originally born of common law, the 1976 Act codifies the fair use doctrine and provides four non-exclusive factors for courts to consider:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for 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; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.8
All four factors are “to be explored, and the results weighed together, in light of the purposes of copyright.”9 The Supreme Court has stated that, “undoubtedly the single most important element of fair use” is the effect of the copying “upon the potential market for or value of the copyrighted work.”10 However, since the Supreme Court’s decision in Campbell, the dominant focus of lower courts in determining whether the fair use doctrine applies is whether the work is “transformative."11 Because the Supreme Court prescribes a fact-specific, context-sensitive inquiry instead of a bright-line rule, courts, and judges within courts, often reach opposite conclusions on similar or identical questions.12 The recent decisions from the Supreme Court and the Second Circuit manifest this conundrum.
Google v. Oracle
Google v. Oracle arose back in 2005 when Google acquired Android and began to create a software platform for new mobile devices. In order to make the platform readily accessible to the millions of programmers already familiar with Java programming language, Google sought to include Java code in its Android operating system. However, Oracle owns a copyright in the Java code that Google sought, and after licensing negotiations broke down, Google simply copied verbatim the 11,500 lines of Java code it required.
The Court did not decide the first question presented, namely, whether Oracle’s Java code was copyrightable at all, but rather assumed arguendo that the code was a valid copyrightable work and moved on to the second question: whether Google’s use was fair. Writing for the Court, however, Justice Breyer seemed skeptical of the code’s copyrightability. Analyzing the nature of the work (i.e., factor 2) first, the Court stated that the Java code at issue was “inextricably bound together” with uncopyrightable ideas.13 As a result, the Court reasoned that the code at issue was “further . . . from the core of copyright,” and decided the “nature of the copyrighted work” weighed in favor of fair use.14
The Court then deemed that the remaining three factors favored Google as well. It decided the “purpose and character” of Google’s use was transformative, despite being commercial, because Google expanded the code’s use to new products: Android smartphones.15 Next, the Court found the “amount and substantiality” of the use to be small because the copied code amounted to 0.4% of the total Java platform computer code.16 Lastly, the Court considered the market effects of the use. This too, according to the Court, weighed in favor of fair use because Oracle “was poorly positioned to succeed in the mobile phone market” and “Google’s Android platform was part of a distinct (and more advanced) market than Java software.”17
Justice Thomas, in dissent, criticized the majority for “skipping over the copyrightability question” and “distort[ing] the fair-use analysis.”18 Justice Thomas would have found Oracle’s Java code to be copyrightable and Google’s use to be not fair. To reach this conclusion, Justice Thomas weighed most heavily the market effects factor, which he said pointed firmly in Oracle’s direction because,[Google] erased 97.5% of the value of Oracle's partnership with Amazon, made tens of billions of dollars, and established its position as the owner of the largest mobile operating system in the world.19
The majority did not specifically address Oracle’s partnership with Amazon but rebutted the dissent by noting “the source of [Google’s] profitability has much to do with third parties’ investment” and “correspondingly less to do with [Oracle’s] investment in creating the Java API.”20
Andy Warhol Foundation v. Goldsmith
Although following precedent and the four fair use factors set out in the Copyright Act, the Second Circuit’s fair use analysis in Warhol nonetheless results in a different conclusion perhaps in view of the very different context of the works at issue than the Supreme Court in Google. Specifically, Warhol involved allegations that the artist Andy Warhol copied a photograph taken by Lynn Goldsmith of the musician Prince to create a series of illustrations known as Warhol’s “Prince Series.”21 While Justice Breyer began with, and prioritized, the “nature” of the work in his analysis, Judge Lynch of the Second Circuit devoted only a single paragraph in the middle of his opinion to this factor.22 Part of this discrepancy perhaps can be attributed to Goldsmith’s photograph being primarily “expressive or creative” whereas the Java code is primarily “factual or informational.”23
Second, the two decisions diverge on what makes a work “transformative.” The court in Warhol held that the “purpose and character” of Warhol’s Prince Series was not transformative because it “retains the essential elements of its source material” and simply “recast the [source] photographs in a new medium.”24 At first glance, Google’s actions could arguably fit that description. Google retained, by copying verbatim the essential Java code it needed, and repurposed it for use in connection with smart phones. However, the Supreme Court determined that Google’s use was transformative.
Next, in evaluating the “amount and substantiality” factor, the Supreme Court and Second Circuit reached different conclusions apparently because of nature and context of works at issue. In Warhol, the Second Circuit decided the factor weighed against fair use because Warhol created the Prince Series from a “specific photograph of Prince” shot by Goldsmith.25 Notwithstanding Goldsmith taking many photographs of Prince, Warhol used just one for his works, and the Second Circuit viewed that work alone in assessing the amount and substantially of the plaintiff’s work used. In Google, however, the Court evaluated the amount of the Java code used by Google as a proportion of Oracle’s entire Java platform code as the overall singular copyrighted work. This suggests that the context and nature of the copyrighted work can play a critical role in framing the bounds of the work in the fair use analysis.
Finally, the two opinions differ in their treatment of the fourth factor, market effects. Judge Lynch, in Warhol, continued the trend in certain circuit courts of elevating economic factors above the transformative nature of the work, and the concurrences would have had Judge Lynch go even further.26 Specifically, Judge Lynch stated that the factor did not favor fair use, despite the “two works occupy[ing] distinct markets,” because the Prince Series substantially harmed the potential licensing and derivative market of Goldsmith’s photograph.27 Google’s use of Oracle’s Java code was deemed fair despite the impact on Oracle’s licensing market outlined by Justice Thomas in dissent.
The Courts in Google and Warhol analyze fair use in distinct contexts and as a result reach different outcomes for each of the four factors. Like Campbell before it, Google confirms that all four factors must be considered in the fair use analysis, but how those factors are weighed are best left to the unique facts, circumstances, and contexts of each case.
1 Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183, 1209 (2021).
2 Andy Warhol Found. Visual Arts, Inc. v. Goldsmith, No. 19-2420-CV, 2021 WL 1148826, at *15 (2d Cir. Mar. 26, 2021).
3 See, e.g., Kienitz v. Sconnie Nation LLC, 766 F.3d 756 (7th Cir. 2014); Dr. Seuss Enterprises, L.P. v. ComicMix LLC, 983 F.3d 443 (9th Cir. 2020).
4 U.S. Const. art. I, § 8, cl. 8.
5 17 U.S.C. § 101 et. seq.
6 Emerson v. Davies, 8 F. Cas. 615, 619 (No. 4,436) (C.C.D. Mass. 1845).
7 Blanch v. Koons, 467 F.3d 244, 250 (2d Cir. 2006).
8 17 U.S.C. § 107.
9 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 578 (1994).
10 Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 566 (1985). But see Campbell, 510 U.S. at 594 (reversing the lower court for concluding that the commercial nature of the alleged infringing work rendered it presumptively unfair).
11 See 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.05[A][b] (noting that many courts appear to label a use “not transformative” as a shorthand for “not fair,” and correlatively “transformative” for “fair”); see also Jiarui Liu, An Empirical Study of Transformative Use in Copyright Law, 22 Stan. Tech. L. Rev. 163, 180 (2019) (finding in 238 district and circuit court decisions that the fair use outcome and transformative determination correlated 94% of the time).
12 See Campbell, 510 U.S. at 577-78.
13 Google, 141 S. Ct. at 1201.
14 Id. at 1202.
15 Id. at 1204.
16 Id. at 1205-06.
17 Id. at 1206-07.
18 Id. at 1211 (Thomas, J., dissenting).
19 Id. at 1210-11 (Thomas, J., dissenting).
20 Id. at 1208.
21 Andy Warhol Found. Visual Arts, 2021 WL 1148826, at *1.
22 Id. at *11.
23 See Blanch, 467 F.3d at 256.
24 Andy Warhol Found. Visual Arts, 2021 WL 1148826, at *9.
25 Id. at *12.
26 See id. at *19 (Sullivan, J., concurring) (“I write simply to stress that this renewed attention to the fourth fair use factor will ultimately better serve the purposes of copyright . . . .”).
27 Id. at *13.
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