The recent decision in Kienitz v. Sconnie Nation LLC, No. 13-3004, 2014 WL 4494835 (7th Cir. Sept. 15, 2014) suggests that the Seventh Circuit is at odds with the Second Circuit as to which factor is most important for determining when the fair use defense to copyright infringement should apply, and as to the appropriate analysis for certain fair use factors. That disagreement is mostly illusory, but important in application.  In Kienitz, the alleged infringement involved so-called “appropriation art,” meaning art using works created by others. The defendants argued that their use of plaintiff’s work fell within the fair use exception to copyright infringement because their use was, inter alia, “transformative.” The district court agreed and granted summary judgment. The district court’s opinion relied on the Second Circuit’s decision in Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013), which held that “transformative use” should be considered when analyzing a fair use defense.

On appeal, the Seventh Circuit affirmed. However Judge Easterbrook, writing for the Seventh Circuit, declined to inquire as to whether the defendants’ use was “transformative.” Judge Easterbrook expressed concern that such an inquiry not only replaces the fair use factors listed in the statute, 17 U.S.C. §107, but also could override the protection of derivative works. Instead, he found it best to stick with the list set forth in the statute and indicated that impact on market value should be given the most weight.

Like Kienitz, the work at issue in Cariou involved “appropriation art,” and the Second Circuit also found fair use. However, contrary to the characterization provided in Kienitz, the Second Circuit in Cariou did not advocate for the replacement of the fair use factors set forth in the Copyright Act with a “transformative” test. Rather, the Second Circuit couched its “transformative” analysis within the confines of the first factor set forth in the statute, namely “the purpose and character of the use” of the copyrighted work.

In contrast to the Seventh Circuit in Kienitz, the Second Circuit in Cariou found that “the purpose and character of the use” was “[t]he heart of the fair use inquiry.” The Cariou court also addressed any concerns regarding derivative works, commenting that a derivative work, unlike a transformative work, “merely presents the same material but in a new form, such as a book of synopses of televisions shows.”

In short, the Second and Seventh Circuits do not agree as to which fair use factor is most important. Moreover, it appears that arguing that a work is “transformative” may hold little sway before the Seventh Circuit. However, despite their differences, both the Second and Seventh Circuits appear to agree that “appropriation art” may be a fair use of a copyrighted work. While the opinions provide no guidance as to when “appropriation art” no longer constitutes fair use, they do suggest that an appropriation artist asserting the fair use defense present, at a minimum, strong arguments as to why the first and fourth factors set forth in the statute apply in their favor.