On January 11, 2012, The Velvet Underground brought a claim against the Andy Warhol Foundation for the Visual Arts, the recipient of Warhol’s copyrights and trademarks upon his death. The complaint sought declaratory relief based on an alleged copyright infringement and a separate claim of trademark infringement.
The copyright issue has recently ripened to resolution as Judge Alison Nathan dismissed the Partnership’s claim without prejudice on September 7, 2012.
Andy Warhol, a mainstay of the pop art movement and creator of the Marilyn Diptych (1962) and the Campbell’s Soup Cans (1962), managed a band in the mid-1960s called The Velvet Underground. The Velvet Underground broke up only a few years after it produced its first album in 1967, but, despite its short life, in 2003 Rolling Stone declared their album to be one of the “greatest of all times”, not far behind the Beatles, the Beach Boys, and Bob Dylan. Arguably, of more significance today, is the album cover. Warhol himself created the cover which is now a distinguished image of a mundane object: a banana.
The banana logo was originally published without a copyright, and no evidence of a subsequent registered copyright has emerged. Initially, the Velvet Underground, now a partnership, claimed that the banana logo was in the public domain, since no copyright exists under federal law when an item is thrust into circulation before January 1, 1978. Then a month after filing, the Partnership amended the complaint and discretely backed away from this assertion while still asserting the need for declaratory relief.
Declaratory relief requires a “case of actual controversy,” meaning the party seeking relief is facing an adverse legal interest during the entirety of the case. So when the Foundation entered a “Covenant Not to Sue for Copyright Infringement” with the Partnership not long after the suit began, it effectively nullified the claim. Based on the Covenant, the Judge determined that the Partnership no longer faced an adverse interest from the Foundation.
Even after signing the Covenant, the Partnership opposed the dismissal. It argued, one, the Foundation’s use of the banana logo practically eliminated the Partnership’s claim to copyright; and two, economically speaking, any licensing agreement the Foundation entered decreases the Partnership’s chances of licensing the banana logo. If you eat half the banana, you are left fighting over half the banana.
The Judge rejected both these arguments. One, the Foundation’s claim to a copyright does not eliminate the Partnership’s interest because the Partnership may not have an interest. That is the very question in dispute. Two, an economic interest is irrelevant because the law requires a legal interest when seeking declaratory relief.
Still there is room for speculation. Why did the Foundation sign the Covenant? In the past the Foundation has not shied away from law suits, licensing in general brings in over $2.5 million annually, and it recently negotiated a deal for iPad covers with the banana logo. Perhaps, the Foundation has come to see the negatives of litigation. It is costly, and there is the risk of losing. Or, maybe it views the Partnership as a non-threat. It is like promising not to tell on your little brother for taking a cookie when you plan on eating them all first.
More likely, it is a move to shelter its interest in the banana logo. Back in 1967 Andy Warhol and the band shared an advance payment of $3,000 from MGM Records for the album cover, and, according to copyright law, this is considered “work made for hire.” The entity or person that paid for the item is designated the author with exclusive rights of reproduction and derivative works, among others benefits. MGM Records paid, so presumably MGM Records was the author with all the additional benefits. Curiously, MGM Records, now Universal Music Group, remains uninvolved in the proceedings. Why wake a sleeping giant?
As indeterminate as the copyright claim may seem due to the dismissal, it was enough. Copyright law can be complex and at times vague, but it reflects the environment. At a more fundamental level, law is meant to resolve conflicts, and for the time being, the Partnership and the Foundation have come to an agreement in the Covenant.
As for the future, “peel slowly and see.”
* Lindsey Chessum is a second year law student at Wake Forest University School of Law. She has a Bachelor’s in Economics & Business and Philosophy from Westmont College and spent nearly two years in the stock market industry prior to law school. Upon graduation in 2014, Ms. Chessum plans to return to California to practice business law.