The Supreme Court is Set to Hear a Copyright Case with Big Implications for U.S. Tech Innovation

The U.S. Supreme Court (SCOTUS) is set to hear Andy Warhol v. Lynn Goldsmith in October. It will be the latest in a series of cases the Court has taken on over the last decade-plus that promise to change U.S. innovation as we know it.

The case will be heard on the heels of other controversial SCOTUS decisions that have drastically changed the legal landscape, with rulings that transfer power from the federal government to the individual states (Dobbs v. Jackson Women’s Health Organization) or that reduce federal oversight altogether (West Virginia v. EPA). It has also put limits on specific executive powers and plans to rule soon on affirmative action. Not getting as much attention, but arguably equally important, are some recent and not-so-recent decisions that have changed the landscape of the rights of authors and inventors, and the upcoming Warhol case, which may effectively remove them altogether. Unfortunately, many people, including politicians and academics, don’t understand—or refuse to recognize the importance of—intellectual property rights for the advancement of civilization.

The Founding Fathers Got It

The founding fathers believed that IP rights were among the most important rights in a free society. So important that they passed the Patent Act of 1790 even before passing the Bill of Rights a year later. In European countries at the time, wealthy individuals and large companies were able to infringe, misappropriate, and outright steal IP from authors and inventors. Not so in the new United States. Even before African Americans had freedom, they could obtain patents and profit from their inventions and writings—people like Thomas L. Jennings, who invented a dry-cleaning process in 1821, or Sarah E. Goode, who invented a folding cabinet bed in 1885. These people succeeded in business in a racist world and used the proceeds to educate their children, buy others out of slavery, and support abolition movements.

Before women could vote, they could write articles, pamphlets, and books to influence society and retain the rights to those writings. Elizabeth Cady Stanton, who led the Women’s Suffrage movement, wrote countless articles and speeches to promote women’s suffrage and eventually published the six-volume History of Woman Suffrage.

A Step Back

Yet, in 2014, the Supreme Court ruled in Alice v. CLS Bank that software is patentable, but then proceeded to say that any process that did not include hardware was not patentable unless it is “innovative” and “improves the technology.” For over 200 years, processes were patentable, like Jennings’ dry-cleaning process, but suddenly software processes became unpatentable unless they “improved the technology.” What that means, exactly, has been debated since then by lawyers, but not by engineers, because the Supreme Court said the patentability issue (Section 101 of the U.S. Patent Act) is a matter of law to be decided by lawyers and judges, not a matter of fact to be decided by subject matter experts (computer scientists) and juries.

Academics, who generally supported this Supreme Court ruling, said not to worry. Software can always be protected by copyright. That was the essence of arguments by renowned law school professors Pamela Samuelson at Berkeley and Mark Lemley at Stanford.

Then came the case of Oracle v. Google in which Oracle proved that Google copied 11,500 lines of software code for its application program interfaces (APIs) that allow programs to connect to Java, a programming language built by Sun Microsystems, a company that was later purchased by Oracle. At its release, Java was the fastest growing programming language in computer history, used to control most Internet-based computer servers. When Google released its Android operating system, it didn’t want to train programmers in new APIs, so it decided to use the ones that most programmers already knew, the Java APIs. Google acknowledged this misappropriation in internal emails and admitted that it was supposed to pay a license fee to Sun Microsystems, but one of the most highly valued companies in world history decided not to pay the fee and just copy the APIs. Android became a huge success without Google having to train new engineers. In court, Google argued that software wasn’t copyrightable, but the courts disagreed. Then Google argued that copying the APIs was “fair use.”

To determine whether a copy is a fair use, the courts have said it needs to consider the following criteria:

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, specifically whether the copying at issue was “transformative” by adding something new, with a further purpose or different character.
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.

The lower courts all ruled that Google’s copying was not fair use. However, the Supreme Court ruled differently, declaring that Google’s copying was fair use. With respect to criterion 1, Google gave away the Android operating system for free, and it was utilized by many programmers around the world, so it wasn’t copied for commercial reasons according to the court. Really? One of the world’s most profitable companies created one of its most widely used tech products using 11,500 lines of copied code, but it wasn’t a commercial use?

With respect to criterion 2, the Java APIs were for a programming language and the Android APIs were for an operating system and these things are different uses according to the court. They’re as different as, I don’t know, an automobile and a truck.

For criterion 3, the Supreme Court admitted that the 11,500 lines of code comprised “virtually all the declaring code needed to call up hundreds of different tasks,” but “they amounted to “only 0.4%” of the “2.86 million lines” for all of the Java API computer code. This is an astounding change in copyright law, which has always considered the copied portion, not the entire work. It has never been allowed as fair use for one author to copy a paragraph or chapter from Harry Potter into his or her own novel. George Harrison would have been interested in this ruling, having paid a $1.5 million fine for “subconsciously” copying parts of a simple melody riff from someone else’s song.

For criterion 4, the Supreme Court said, sure, Oracle lost the license fees it was owed and the potential for developing its own Java-based operating system for mobile phones, which it had to abandon. But more importantly, the theft was for the public good because look at how many great Android phones are available. This is akin to the Supreme Court saying you can steal your neighbor’s television if you set it up in the public square for everyone to watch. When did this philosophy become law in America? For a scathing, brilliant, and legally comprehensive argument about the absurdity of this ruling, read Justice Thomas’ dissent. But this new understanding of fair use is now the law of the land.

You would expect that Professors Samuelson and Lemley, having argued for years that patents weren’t needed for software because we had copyrights, would be vehemently opposed to this ruling. But their actual positions were revealed when Samuelson wrote an amicus brief in favor of Google, and she and Lemley co-wrote a paper arguing against copyright protections for software.

Academics insisted that the ruling only applied to software and that copyright law was safe. At least safe for media other than software. The Supreme Court said its ruling only applies to computer code: “[c]omputer programs differ to some extent from many other copyrightable works because computer programs always serve a functional purpose.” This is interesting reasoning because the Supreme Court first weakened software patentability that protects the function and then weakened software copyrightability that protects the expression.

The Warhol Case

This brings us to the upcoming Warhol argument. In 1981, artist Andy Warhol created a series of artworks based on a photographs of the singer Prince taken by photographer Lynn Goldsmith without Goldsmith’s permission. The district court ruled that it was a fair use because Warhol’s work was transformative (criterion #2 of fair use). The Second Circuit overturned the district court because Warhol’s work was not “fundamentally different and new” and did not embody an “entirely different artistic purpose” so that it “stands apart from the raw material.” After all, Goldsmith’s photographs were recognizable in Warhol’s works, and both were artistic expressions.

Some say that artists and writers shouldn’t worry because the Supreme Court carved out an exception that broadened fair use just for software. The Court specifically said in Oracle v. Google: “Computer programs differ to some extent from many other copyrightable works because computer programs always serve a functional purpose. Because of these differences, fair use has an important role to play for computer programs by providing a context-based check that keeps the copyright monopoly afforded to computer programs within its lawful bounds.” However, there is nothing in the Court’s logic, as explained step-by-step in the ruling, that differentiates software from any other creative product. The same reasoning applies perfectly to Warhol’s copying of Goldsmith’s photos. Given the fact that Warhol was one of the most successful and recognized artists of the twentieth century, if the Supreme Court is to be consistent, it must say that a large section of the public was served by Warhol’s copying, and it was therefore fair use.

Will the Supreme Court rule that way? Well, first, there are new justices, so it’s not certain how the ruling will go. Second, Supreme Court justices have a history of misunderstanding technology and applying contradictory and confusing rules to its protection or lack thereof. If the justices are consistent in their thinking, and they obey the legal doctrine of stare decisis, then they will rule in favor of Warhol’s fair use. So maybe we should instead rely on the legislative branch to correct these judiciary mistakes, but that seems unlikely, given how they’ve also weakened intellectual property protection with the America Invents Act of 2013 and propose to weaken it with the recent Restoring the America Invents Act. Unfortunately, American authors, inventors, artists, computer programmers, and other creators are not receiving the protections guaranteed for them, possibly signaling the end of the long, great era of American innovation.