Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio. Oh. Prince,
Speaker 1: the music icon was captured on canvas by Andy Warhol
Speaker 1: the artist icon in a series of twelve silk screen portraits.
Speaker 1: Warhol used a photo of Prince by photographer Lynn Goldsmith
Speaker 1: as the source material. The legal battle over the Prince
Speaker 1: series didn't begin for some thirty years. Goldsmith sued the
Speaker 1: Warhol Foundation and just last month convinced the Second Circuit
Speaker 1: that Warhol had infringed her photo of Prince. Now the
Speaker 1: Foundation wants another chance to argue its case, joining me
Speaker 1: as intellectual property litigator Terence Ross a partner Captain uten Rosenman,
Speaker 1: So Terry tell us about the litigation history here. The
Speaker 1: District Court found that ferry us did apply to this
Speaker 1: case and ruled in favor of the Warhol Foundation and
Speaker 1: dismissed the case of Miss Goldsmith that there had been
Speaker 1: a copyright infringement. She then appealed it and the Second
Speaker 1: Circuit reversed the District Court, and frankly was a little
Speaker 1: bit critical of the way the District Court had reached
Speaker 1: its fair use conclusion, stating that the District Court had
Speaker 1: in fact played art critic, and by analyzing the contestant
Speaker 1: work from sort of art criticism point of view, had
Speaker 1: been able to reach a decision that the work was transformative.
Speaker 1: And the Second Circuit thought that that was the wrong
Speaker 1: approach and therefore overturned earned The decision of the District
Speaker 1: Court held that there was no fair use here and
Speaker 1: rendered a decision in favor of the plaint of this Goldspence,
Speaker 1: finding that there was copyright in Frenchman. I don't want
Speaker 1: to play art critics, but when you compare the photograph
Speaker 1: to Warhol silk screens, it's hard for me to understand
Speaker 1: how the court didn't find this to be transformative. He's
Speaker 1: known for doing these kind of pieces, transforming ordinary things
Speaker 1: into extraordinary things, and the orange Prints is considered an
Speaker 1: important work of his. How is this not transformative? Well,
Speaker 1: your comment is particularly true one one reflects upon the
Speaker 1: previous Second Circuit decision in the Prince versus Crew case.
Speaker 1: In that case, photographs of Rastafarians in Jamaica were taken
Speaker 1: and guitars were added drawn in, and various other almost
Speaker 1: doodles were added to the photograph, and in that case
Speaker 1: the Second Circuit found that that was transformative. In light
Speaker 1: of that case, it's hard to see an intellectually principled
Speaker 1: rationale for finding in the Goldsmith case that there was
Speaker 1: no transformative element. I think the issue here is really
Speaker 1: a split within the Second Circuit itself amongst the judges
Speaker 1: of the Second Circuit as to how expansive the fair
Speaker 1: use principle should be. And the broader the view you
Speaker 1: have of the fair use doctrine, the more one is
Speaker 1: likely to find transformative use. And conversely, the less expanse
Speaker 1: of one beliefs fair you should be, the less likely
Speaker 1: one is likely to find transformative use. And I think
Speaker 1: that's really what's going on behind the scene in this
Speaker 1: case and is playing out in this Second Circuit decision.
Speaker 1: So a week after the Second Circuit decision, the Supreme
Speaker 1: Court it comes out with the Google Oracle decision. Tell
Speaker 1: us what happened after that? The Second Circuit said, Oops,
Speaker 1: let us rethink this. So the Foundation very quickly filed
Speaker 1: a motion for reconsideration or in the alternative or an
Speaker 1: on bonk review of the decision. So the Second Circuit
Speaker 1: decision you're finding that there was no fair use was
Speaker 1: rendered by a three judge panel. The defendants are essentially
Speaker 1: saying that in light of the Google versus Worlek, a
Speaker 1: significant change in the law has occurred, and that therefore
Speaker 1: the Second Circuit as a whole, all the judges the
Speaker 1: Second Circuit, not just the three judges Fanel, should reconsider
Speaker 1: this case and determine how the Google versus Oracles re
Speaker 1: court decision impacts this specific appeal. Explain just basically the
Speaker 1: Google versus Oracle decision. Google versus Oracle was a very
Speaker 1: long running and complicated copyright infringement dispute involving the copying
Speaker 1: of certain code by Google in order to allow the
Speaker 1: development of Android devices. The types of code copies were
Speaker 1: whatever known as APIs. It allows developers to develop and
Speaker 1: implement functionality around the Java system that Oracle developed in
Speaker 1: them and the Supreme Court decided that the use by
Speaker 1: Google of these portions of the Java cub the API
Speaker 1: was fair use and therefore did not constitute copyright infringement.
Speaker 1: It was widely regarded as the most important decision in
Speaker 1: copyright law in the context of computer programming that has
Speaker 1: ever been rendered. So how would that affect the Warhol case. Well,
Speaker 1: that's a great question, Jim. On its face, hard pressed
Speaker 1: to see how it would impact the war Haul case
Speaker 1: the Court. Justice Brier, writing on behalf of six of
Speaker 1: the eight justices who participated, was very careful to distinguish
Speaker 1: relatively early in his decision that this case was focused
Speaker 1: on computer software. Justice Bryer notes that there are sweet
Speaker 1: generous elements for this decision that really apply only to
Speaker 1: computer program and in that sense, I am hard pressed
Speaker 1: to see what the Second Circuit finds of interest in
Speaker 1: Google Verson ll call visa the Goldsmith versus the war
Speaker 1: Hal Foundation, Terry. The Second Circuit rarely grants on bank hearings,
Speaker 1: so why do you think they were even considering it
Speaker 1: in this case? So June to put this in context,
Speaker 1: Second Circuit grants on bank review in a typical year
Speaker 1: and fewer than five percent of its cases, and there
Speaker 1: are years in which it has granted only one or
Speaker 1: two on bank reviews, and typically an on bank reviews
Speaker 1: granted where there has been a significant one. We call
Speaker 1: it almost to see change in the law that has
Speaker 1: taken place that the Second Circuits field has to weigh
Speaker 1: in on, or an issue of first impression that is
Speaker 1: of such important that the Court as a whole has
Speaker 1: to weigh in on it. In that sense, it's hard
Speaker 1: for me to understand how this particular case fits that criteria.
Speaker 1: I don't view Google versus Oracle as changing the law
Speaker 1: of fair use. The four factors that are applied were
Speaker 1: not changed by the Supreme Court, and indeed, a manner
Speaker 1: in which they articulated the four factors that courts are
Speaker 1: to consider in fair use cases was relatively typical a
Speaker 1: past decision by Supreme Court and the circuit courts, including
Speaker 1: the Second. What one has to believe is going on
Speaker 1: here is that this internal split within the judges Second
Speaker 1: Circuit is being played out in this Cold Smith versus
Speaker 1: Andy Warhol Foundation case. There is a group of judges
Speaker 1: and Second Circuits which, by the way, pioneers the notion
Speaker 1: of a transformative factor in fair use. But there is
Speaker 1: this faction with in the Court that believes that fair
Speaker 1: use should be expansively interpreted, and I believe that they
Speaker 1: view the Google versus Oracle case as similarly expressing an
Speaker 1: expansive view of fair youth. I don't think that that
Speaker 1: is fair view of the Google versus Oracle case, and
Speaker 1: therefore that is why I believe that the Court has
Speaker 1: asked for this additional briefing with respect to the Oracle
Speaker 1: versus Google case, and I would not be surprised if,
Speaker 1: even after the briefing, second Circuit denied on bonk review. Remember,
Speaker 1: it takes a majority of the judges of the Second
Speaker 1: Circuit to order it on bonk review, and I'm not
Speaker 1: sure that there is a majority of judges who are
Speaker 1: willing to um grant granted here did the art world
Speaker 1: or the intellectual property world find the Second Circuit's decisions surprising?
Speaker 1: So you know, we've talked in the past about fair
Speaker 1: use and copyright as being like a pendulum that swings
Speaker 1: back and forth based on perceptions of public opinion. From
Speaker 1: the Prince versus Crew case of the Second Circuit from
Speaker 1: a few years ago sort of represented a swing dramatically
Speaker 1: in favor of a liberal interpretation of fair use, and
Speaker 1: since that time we've seen the pendulum swinging back the
Speaker 1: other way toward a more traditional and slightly more challenging
Speaker 1: view of the fair use doctrine. One of the things
Speaker 1: that has happened and is not been noted by the
Speaker 1: media with respect to the passing of Justice Ginsburg is
Speaker 1: the dramatic change that meant for the Supreme Court and
Speaker 1: copyright law. Justice Brier and Justice Ginsburg represented the to
Speaker 1: anypodes of copyright and fair use doctorate in American jurisprudence.
Speaker 1: And while the media is focused on Siskinsburg's passing might
Speaker 1: impact called political cases in which there is a conservative
Speaker 1: or a liberal block at issue, then failed the note
Speaker 1: the changes had on copyright law. And as soon as
Speaker 1: you saw that Justice Brier wrote this decision in Oracle
Speaker 1: versus Google, you knew that it was going to be
Speaker 1: a victory for Google and a finding that fair use
Speaker 1: was justified. Because he has always, since he was a
Speaker 1: professor at Harvard Law Scholl, supported an expansive view of
Speaker 1: fair youth, whereas Justice Ginsburg has always in her decision
Speaker 1: supported a much more limited view of fair use and
Speaker 1: has been a strong supporter of copyright law. And her
Speaker 1: absence from the Court not just as a vote, but
Speaker 1: as the intellectual bedrock for that view of copyright law
Speaker 1: is sorely miss and it's really reflected in this Google
Speaker 1: versus Oracle cake where we see the expansive youth fair
Speaker 1: use now predominating and Justice Fire being to obtain five
Speaker 1: other votes for his position. Several which I don't think
Speaker 1: would have been there. Justice Ginsburg had been on the
Speaker 1: court to articulate and advocate for a cover review of
Speaker 1: copyright infringement, and we now see that being played out
Speaker 1: in the Second Circuit as well, with the judges in
Speaker 1: their favorite or expanse of view of fair use doctrine
Speaker 1: contempting to seize upon the sea shift at the Supreme
Speaker 1: Court to argue for a comparable shift in the Second
Speaker 1: Circuit law in real life? What does this decision mean
Speaker 1: to the photographer here? So it depends on what the
Speaker 1: Second Circuit decides if it grants on bonk review. If
Speaker 1: it decides to overrule the panel decision, then the any
Speaker 1: Warhouth foundation is off. The Hall doesn't have to negotiate
Speaker 1: anything with the photographer. If they decide not to take
Speaker 1: the case on bonk or to take it on bonk
Speaker 1: and then continue to affirm the finding and no fair use,
Speaker 1: then it would move to a damages stage, and she's
Speaker 1: asked for very significant damages and don't really have a
Speaker 1: view on whether that valid or not. But we would
Speaker 1: have to go back to the District Court for a
Speaker 1: fury trial on what the proper damages for the furnitument
Speaker 1: are in this case, you ask about what the practical
Speaker 1: impact of these decisions uh in the art world or
Speaker 1: the answer is real simple, it's complete confusion, um it is.
Speaker 1: It is really hard to understand when stair use applies
Speaker 1: and when it does not. Given these decisions, which often
Speaker 1: seem to be based on the whim of whoever the
Speaker 1: judge or judges reviewing the competing works have, you just
Speaker 1: as a practicing where find it very challenging to counsel
Speaker 1: artists or someone who wishes to make use of another
Speaker 1: artist's work. It's just very hard to tell them where
Speaker 1: the line is drawn for fair use anymore. That said, again,
Speaker 1: I repeat the Google versus Loracle case I believe does
Speaker 1: not impact artworks specifically because Justice Brier says at the
Speaker 1: beginning of the decision that computer programs really have to
Speaker 1: be treated differently than literary work such as movies, books, films,
Speaker 1: and artwork. Thanks Terry. That's Terence Ross, a partner at
Speaker 1: Captain Uten Rosenman. West Virginia has been called ground zero
Speaker 1: of the opioid epidemic. At a hearing on Capitol Hill
Speaker 1: two years ago, lawmakers grilled drug distributors about the millions
Speaker 1: of opioids sent to small towns in West Virginia. Here's
Speaker 1: former Republican Congressman Greg Harper of Mississippi. Number of opioids
Speaker 1: ship to pharmacies and small towns in West Virginia has
Speaker 1: been astonishing. Nearly eight hundred million opioids in total distributor
Speaker 1: to West Virginia in just a five year period, twenty
Speaker 1: point eight million opioids to Williamson, and nearly seventy million
Speaker 1: opioids to a single pharmacy in Mount gay Shamrock over
Speaker 1: a decade. A landmark trial over the opioid crisis kicked
Speaker 1: off this week in West Virginia, as the three largest
Speaker 1: US drug distributors are facing claims they fuel the opioid
Speaker 1: crisis by dumping nearly one hundred million pills into the
Speaker 1: region over a decade. Joining me is Richard Ausness, a
Speaker 1: professor at the University of Kentucky Law School. So the
Speaker 1: plaintiffs are using a public nuisance theory. Tell us a
Speaker 1: little bit about that. This has been served the favorite
Speaker 1: theory of most of the litigants in these opioid cases.
Speaker 1: There's one, as you know, going on in California, and
Speaker 1: I believe it's also based on public nuisance, and of
Speaker 1: course the Oklahoma case was what public nuisance involves is
Speaker 1: some kind of activity that interferes with a public right,
Speaker 1: that is, a right held in common by the general public.
Speaker 1: Is this an unusual use of the nuisance theory? Has
Speaker 1: it mainly been used in cases involving property or pollution
Speaker 1: disputes things like that? I believe it is. The number
Speaker 1: of governmental entities have used public nuisance in lead paint, handguns,
Speaker 1: as best this and other products can. They've used them
Speaker 1: in other drug cases to not involving opioids. Now, it
Speaker 1: hasn't been overly successful, in part because, as you point out, traditionally,
Speaker 1: at least public nuisance has involved either a violation of
Speaker 1: statute or interference with either the plaintiffs use of his
Speaker 1: or her land, or some activity on the land of
Speaker 1: the defendant, and neither of those really apply in this case.
Speaker 1: Seems to me the plaintiffs are going to call all
Speaker 1: kinds of witnesses, expert witnesses, local leaders, people who have
Speaker 1: been personally affected by substance abuse. What do the plaintiffs
Speaker 1: have to prove to make out their case? Well, I
Speaker 1: think a lot of that is just theater political theater.
Speaker 1: The real issue, at least initially, is there a public nuisance,
Speaker 1: and that means it interferes, at least in most states,
Speaker 1: whether right held in common by the public. So the
Speaker 1: fact that certain individuals have been injured is neither here
Speaker 1: nor there in my opinion. But of course it makes
Speaker 1: for good theater, so they're kind of drop them all
Speaker 1: out and get as much leverage as they can. Now
Speaker 1: that doesn't work quite as well when it's a bench
Speaker 1: trial than if it were a jury trial, but it's
Speaker 1: not only aimed at the judge, it's aimed at the
Speaker 1: news media and the general public the defendant. Drug distributors
Speaker 1: are pointing in other directions for their defense illegal drugs, doctors, hospitals,
Speaker 1: drug companies. Well, I think being distributors, they're gonna say, hey,
Speaker 1: we didn't sell drugs, at least not to the general public,
Speaker 1: and we didn't particularly advertise them in the way that
Speaker 1: the manufacturers did. And it's kind of a causation argument.
Speaker 1: They're going to try to say we didn't cause the problem,
Speaker 1: or or our contribution was minimal, that these other groups
Speaker 1: are far more culpable than we are, And I think
Speaker 1: that's a decent argument. Certainly. One of the problems with
Speaker 1: the way these cases are going is they say, go
Speaker 1: out one group when they're a whole host of potential
Speaker 1: wrongdoers doing different things. You know, you've got the manufacturers,
Speaker 1: you've got the distributors, and you've got the retail sellers,
Speaker 1: and then obviously you've got criminal black market people too.
Speaker 1: There's a lot of blame to go around, and so
Speaker 1: by focusing on just one group, you give them the
Speaker 1: chance to say, hey, you're going after the wrong people,
Speaker 1: go after these other people. So far has worked. It
Speaker 1: certainly didn't work in the Johnson and Johnson case, and
Speaker 1: I don't know if it will work very well in
Speaker 1: this case either. Why didn't the plaintiffs here sue the
Speaker 1: distributors and the drug companies in the same case. Well,
Speaker 1: I think they did originally. But the thing about these
Speaker 1: bell Weather trials is they're trying to sort of um
Speaker 1: focus on on a fairly narrow issues and get a
Speaker 1: decision that isn't cluttered up by a lot of other things.
Speaker 1: So it makes a certain amount. I think they could
Speaker 1: go back and see these other uh parties if they
Speaker 1: wanted to. But the at least in theory. The purpose
Speaker 1: of these bell Weather trials is to try to get
Speaker 1: some sense of how strong or weak the cases are,
Speaker 1: which gives of course both the plaintest them the defendants
Speaker 1: some information, um, not only about whether they're liable or not,
Speaker 1: but how much the case is worth. You know, what
Speaker 1: the size of the awards should be in other cases.
Speaker 1: But you know, one thing about having said that, you
Speaker 1: know this is a significant case, which it is, uh
Speaker 1: in it's typical to have many bell Weather cases, especially
Speaker 1: in an area that's important. Um. I believe it was
Speaker 1: the Box case where they had by sixteen or seventeen
Speaker 1: bell Weather trials. Um. You know that gives you a
Speaker 1: lot more information than just a single decision, regardless of
Speaker 1: which way it go. So that would you say the
Speaker 1: plaintiffs have the advantage in this case, Well, I would
Speaker 1: say just because of the optics, that the defendants are
Speaker 1: in bad shape. Now, this, of course as a federal court,
Speaker 1: so maybe it won't be quite as bad. But West
Speaker 1: Virginia was notorious for being playing if oriented the state courts,
Speaker 1: and that's probably a good reason for not having a
Speaker 1: jury that might be influenced. But you know, the consequences
Speaker 1: have been so terrible in West Virginia that I mean,
Speaker 1: just everywhere you go, you've got evidence of a serious
Speaker 1: addiction problem, and they're going to put on witness after
Speaker 1: witness saying how terrible everything is. That's a tough argument
Speaker 1: to overcome, which is why they have been settling these
Speaker 1: cases on an individual basis. And I think the fact
Speaker 1: that the Oklahoma court awarded so much money, I mean,
Speaker 1: you know, that's a lot of money, four hundred and
Speaker 1: seventy million dollars. The stakes are pretty high, So the
Speaker 1: defendants are I think, up against it, and I think
Speaker 1: their chances of winning are better on appeal than they
Speaker 1: probably are at trial, which is not to say they're
Speaker 1: that good on the field. The distributors and Johnson and
Speaker 1: Johnson the drugmaker, have proposed a global settlement. What are
Speaker 1: the chances of that, you know, Unlike the tobacco litigation,
Speaker 1: where you had six defendants, I believe it was you know,
Speaker 1: you could work with six defendants and they all did
Speaker 1: the same thing. Whereas here you have the distributors making
Speaker 1: one argument, the manufacturers making another, and the retail sellers
Speaker 1: making yet another. So you've got a lot of parties
Speaker 1: and their interests or not parallel. So it's tough to
Speaker 1: get everybody in the room and come up with something
Speaker 1: like the tobacco Settlement. Thanks Richard. That's Richard Austin's of
Speaker 1: the University of Kentucky Law School. And that's it for
Speaker 1: this edition of the Bloomberg Law Show. I'm June Grosso
Speaker 1: and you're listening to Bloomberg