Warhol's Prince Series at Second Circuit Again

that Warhol had infringed her photo of Prince. Now the Foundation wants another chance to argue its case, joining me as intellectual property litigator Terence Ross a partner Captain uten Rosenman, So Terry tell us about the litigation history here. The District Court found that ferry us did apply to this case and ruled in favor of the Warhol Foundation and dismissed the case of Miss Goldsmith that there had been

a copyright infringement. She then appealed it and the Second Circuit reversed the District Court, and frankly was a little bit critical of the way the District Court had reached its fair use conclusion, stating that the District Court had in fact played art critic, and by analyzing the contestant work from sort of art criticism point of view, had been able to reach a decision that the work was transformative.

And the Second Circuit thought that that was the wrong approach and therefore overturned earned The decision of the District Court held that there was no fair use here and rendered a decision in favor of the plaint of this Goldspence, finding that there was copyright in Frenchman. I don't want to play art critics, but when you compare the photograph to Warhol silk screens, it's hard for me to understand

how the court didn't find this to be transformative. He's known for doing these kind of pieces, transforming ordinary things into extraordinary things, and the orange Prints is considered an important work of his. How is this not transformative? Well, your comment is particularly true one one reflects upon the previous Second Circuit decision in the Prince versus Crew case.

In that case, photographs of Rastafarians in Jamaica were taken and guitars were added drawn in, and various other almost doodles were added to the photograph, and in that case the Second Circuit found that that was transformative. In light of that case, it's hard to see an intellectually principled rationale for finding in the Goldsmith case that there was

no transformative element. I think the issue here is really a split within the Second Circuit itself amongst the judges of the Second Circuit as to how expansive the fair use principle should be. And the broader the view you have of the fair use doctrine, the more one is likely to find transformative use. And conversely, the less expanse of one beliefs fair you should be, the less likely

one is likely to find transformative use. And I think that's really what's going on behind the scene in this case and is playing out in this Second Circuit decision. So a week after the Second Circuit decision, the Supreme Court it comes out with the Google Oracle decision. Tell us what happened after that? The Second Circuit said, Oops, let us rethink this. So the Foundation very quickly filed a motion for reconsideration or in the alternative or an

on bonk review of the decision. So the Second Circuit decision you're finding that there was no fair use was rendered by a three judge panel. The defendants are essentially saying that in light of the Google versus Worlek, a significant change in the law has occurred, and that therefore the Second Circuit as a whole, all the judges the Second Circuit, not just the three judges Fanel, should reconsider this case and determine how the Google versus Oracles re

court decision impacts this specific appeal. Explain just basically the Google versus Oracle decision. Google versus Oracle was a very long running and complicated copyright infringement dispute involving the copying of certain code by Google in order to allow the development of Android devices. The types of code copies were

whatever known as APIs. It allows developers to develop and implement functionality around the Java system that Oracle developed in them and the Supreme Court decided that the use by Google of these portions of the Java cub the API was fair use and therefore did not constitute copyright infringement. It was widely regarded as the most important decision in copyright law in the context of computer programming that has ever been rendered. So how would that affect the Warhol case. Well,

that's a great question, Jim. On its face, hard pressed to see how it would impact the war Haul case the Court. Justice Brier, writing on behalf of six of the eight justices who participated, was very careful to distinguish relatively early in his decision that this case was focused

on computer software. Justice Bryer notes that there are sweet generous elements for this decision that really apply only to computer program and in that sense, I am hard pressed to see what the Second Circuit finds of interest in Google Verson ll call visa the Goldsmith versus the war Hal Foundation, Terry. The Second Circuit rarely grants on bank hearings, so why do you think they were even considering it

in this case? So June to put this in context, Second Circuit grants on bank review in a typical year and fewer than five percent of its cases, and there are years in which it has granted only one or two on bank reviews, and typically an on bank reviews

granted where there has been a significant one. We call it almost to see change in the law that has taken place that the Second Circuits field has to weigh in on, or an issue of first impression that is of such important that the Court as a whole has to weigh in on it. In that sense, it's hard for me to understand how this particular case fits that criteria. I don't view Google versus Oracle as changing the law

of fair use. The four factors that are applied were not changed by the Supreme Court, and indeed, a manner in which they articulated the four factors that courts are to consider in fair use cases was relatively typical a past decision by Supreme Court and the circuit courts, including the Second. What one has to believe is going on here is that this internal split within the judges Second Circuit is being played out in this Cold Smith versus

Andy Warhol Foundation case. There is a group of judges and Second Circuits which, by the way, pioneers the notion of a transformative factor in fair use. But there is this faction with in the Court that believes that fair use should be expansively interpreted, and I believe that they view the Google versus Oracle case as similarly expressing an

expansive view of fair youth. I don't think that that is fair view of the Google versus Oracle case, and therefore that is why I believe that the Court has asked for this additional briefing with respect to the Oracle versus Google case, and I would not be surprised if,

even after the briefing, second Circuit denied on bonk review. Remember, it takes a majority of the judges of the Second Circuit to order it on bonk review, and I'm not sure that there is a majority of judges who are willing to um grant granted here did the art world or the intellectual property world find the Second Circuit's decisions surprising? So you know, we've talked in the past about fair use and copyright as being like a pendulum that swings

back and forth based on perceptions of public opinion. From the Prince versus Crew case of the Second Circuit from a few years ago sort of represented a swing dramatically in favor of a liberal interpretation of fair use, and since that time we've seen the pendulum swinging back the other way toward a more traditional and slightly more challenging

view of the fair use doctrine. One of the things that has happened and is not been noted by the media with respect to the passing of Justice Ginsburg is the dramatic change that meant for the Supreme Court and copyright law. Justice Brier and Justice Ginsburg represented the to anypodes of copyright and fair use doctorate in American jurisprudence.

And while the media is focused on Siskinsburg's passing might impact called political cases in which there is a conservative or a liberal block at issue, then failed the note the changes had on copyright law. And as soon as you saw that Justice Brier wrote this decision in Oracle versus Google, you knew that it was going to be a victory for Google and a finding that fair use

was justified. Because he has always, since he was a professor at Harvard Law Scholl, supported an expansive view of fair youth, whereas Justice Ginsburg has always in her decision supported a much more limited view of fair use and

has been a strong supporter of copyright law. And her absence from the Court not just as a vote, but as the intellectual bedrock for that view of copyright law is sorely miss and it's really reflected in this Google versus Oracle cake where we see the expansive youth fair use now predominating and Justice Fire being to obtain five other votes for his position. Several which I don't think

would have been there. Justice Ginsburg had been on the court to articulate and advocate for a cover review of copyright infringement, and we now see that being played out in the Second Circuit as well, with the judges in their favorite or expanse of view of fair use doctrine contempting to seize upon the sea shift at the Supreme Court to argue for a comparable shift in the Second Circuit law in real life? What does this decision mean to the photographer here? So it depends on what the

Second Circuit decides if it grants on bonk review. If it decides to overrule the panel decision, then the any Warhouth foundation is off. The Hall doesn't have to negotiate anything with the photographer. If they decide not to take the case on bonk or to take it on bonk and then continue to affirm the finding and no fair use, then it would move to a damages stage, and she's asked for very significant damages and don't really have a

view on whether that valid or not. But we would have to go back to the District Court for a fury trial on what the proper damages for the furnitument are in this case, you ask about what the practical impact of these decisions uh in the art world or the answer is real simple, it's complete confusion, um it is. It is really hard to understand when stair use applies

and when it does not. Given these decisions, which often seem to be based on the whim of whoever the judge or judges reviewing the competing works have, you just as a practicing where find it very challenging to counsel artists or someone who wishes to make use of another artist's work. It's just very hard to tell them where

the line is drawn for fair use anymore. That said, again, I repeat the Google versus Loracle case I believe does not impact artworks specifically because Justice Brier says at the beginning of the decision that computer programs really have to be treated differently than literary work such as movies, books, films, and artwork. Thanks Terry. That's Terence Ross, a partner at Captain Uten Rosenman. West Virginia has been called ground zero

of the opioid epidemic. At a hearing on Capitol Hill two years ago, lawmakers grilled drug distributors about the millions of opioids sent to small towns in West Virginia. Here's former Republican Congressman Greg Harper of Mississippi. Number of opioids ship to pharmacies and small towns in West Virginia has

been astonishing. Nearly eight hundred million opioids in total distributor to West Virginia in just a five year period, twenty point eight million opioids to Williamson, and nearly seventy million opioids to a single pharmacy in Mount gay Shamrock over a decade. A landmark trial over the opioid crisis kicked off this week in West Virginia, as the three largest US drug distributors are facing claims they fuel the opioid crisis by dumping nearly one hundred million pills into the

region over a decade. Joining me is Richard Ausness, a professor at the University of Kentucky Law School. So the plaintiffs are using a public nuisance theory. Tell us a little bit about that. This has been served the favorite theory of most of the litigants in these opioid cases.

There's one, as you know, going on in California, and I believe it's also based on public nuisance, and of course the Oklahoma case was what public nuisance involves is some kind of activity that interferes with a public right, that is, a right held in common by the general public. Is this an unusual use of the nuisance theory? Has it mainly been used in cases involving property or pollution

disputes things like that? I believe it is. The number of governmental entities have used public nuisance in lead paint, handguns, as best this and other products can. They've used them

in other drug cases to not involving opioids. Now, it hasn't been overly successful, in part because, as you point out, traditionally, at least public nuisance has involved either a violation of statute or interference with either the plaintiffs use of his or her land, or some activity on the land of the defendant, and neither of those really apply in this case. Seems to me the plaintiffs are going to call all kinds of witnesses, expert witnesses, local leaders, people who have

been personally affected by substance abuse. What do the plaintiffs have to prove to make out their case? Well, I think a lot of that is just theater political theater. The real issue, at least initially, is there a public nuisance, and that means it interferes, at least in most states, whether right held in common by the public. So the fact that certain individuals have been injured is neither here

nor there in my opinion. But of course it makes for good theater, so they're kind of drop them all out and get as much leverage as they can. Now that doesn't work quite as well when it's a bench trial than if it were a jury trial, but it's not only aimed at the judge, it's aimed at the news media and the general public the defendant. Drug distributors are pointing in other directions for their defense illegal drugs, doctors, hospitals,

drug companies. Well, I think being distributors, they're gonna say, hey, we didn't sell drugs, at least not to the general public, and we didn't particularly advertise them in the way that the manufacturers did. And it's kind of a causation argument. They're going to try to say we didn't cause the problem, or or our contribution was minimal, that these other groups are far more culpable than we are, And I think

that's a decent argument. Certainly. One of the problems with the way these cases are going is they say, go out one group when they're a whole host of potential wrongdoers doing different things. You know, you've got the manufacturers, you've got the distributors, and you've got the retail sellers, and then obviously you've got criminal black market people too.

There's a lot of blame to go around, and so by focusing on just one group, you give them the chance to say, hey, you're going after the wrong people, go after these other people. So far has worked. It certainly didn't work in the Johnson and Johnson case, and I don't know if it will work very well in this case either. Why didn't the plaintiffs here sue the distributors and the drug companies in the same case. Well,

I think they did originally. But the thing about these bell Weather trials is they're trying to sort of um focus on on a fairly narrow issues and get a decision that isn't cluttered up by a lot of other things. So it makes a certain amount. I think they could go back and see these other uh parties if they

wanted to. But the at least in theory. The purpose of these bell Weather trials is to try to get some sense of how strong or weak the cases are, which gives of course both the plaintest them the defendants some information, um, not only about whether they're liable or not, but how much the case is worth. You know, what the size of the awards should be in other cases.

But you know, one thing about having said that, you know this is a significant case, which it is, uh in it's typical to have many bell Weather cases, especially in an area that's important. Um. I believe it was the Box case where they had by sixteen or seventeen bell Weather trials. Um. You know that gives you a lot more information than just a single decision, regardless of

which way it go. So that would you say the plaintiffs have the advantage in this case, Well, I would say just because of the optics, that the defendants are in bad shape. Now, this, of course as a federal court, so maybe it won't be quite as bad. But West Virginia was notorious for being playing if oriented the state courts, and that's probably a good reason for not having a

jury that might be influenced. But you know, the consequences have been so terrible in West Virginia that I mean, just everywhere you go, you've got evidence of a serious addiction problem, and they're going to put on witness after witness saying how terrible everything is. That's a tough argument to overcome, which is why they have been settling these

cases on an individual basis. And I think the fact that the Oklahoma court awarded so much money, I mean, you know, that's a lot of money, four hundred and seventy million dollars. The stakes are pretty high, So the defendants are I think, up against it, and I think their chances of winning are better on appeal than they probably are at trial, which is not to say they're that good on the field. The distributors and Johnson and

Johnson the drugmaker, have proposed a global settlement. What are the chances of that, you know, Unlike the tobacco litigation, where you had six defendants, I believe it was you know, you could work with six defendants and they all did the same thing. Whereas here you have the distributors making one argument, the manufacturers making another, and the retail sellers making yet another. So you've got a lot of parties

and their interests or not parallel. So it's tough to get everybody in the room and come up with something like the tobacco Settlement. Thanks Richard. That's Richard Austin's of the University of Kentucky Law School. And that's it for this edition of the Bloomberg Law Show. I'm June Grosso and you're listening to Bloomberg