Appropriation artist Richard Prince used an image taken by photographer Eric McNatt to create a work as part of his New Portrait series displayed and sold at Blum & Poe in Tokyo. 

McNatt's Kim Gordon I was initially published alongside an interview of Kim Gordon in Paper (including the magazine's Instagram account and online), before being featured on Vogue.com as well as on McNatt's website and social media. Prince captured a screenshot of Kim Gordon I on Instagram, posted it to his Instagram, and commented three times before taking another screenshot to create Portrait of Kim Gordon. Prince's Portrait of Kim Gordon was featured in Blum & Poe's exhibition of New Portrait and in a gallery book of the exhibition. McNatt sued Prince and Blum & Poe for copyright infringement.

Prince and Blum & Poe filed a joint motion for summary judgment which McNatt opposed. McNatt filed a motion for summary judgment on the fair use issue. In light of the "parallel" facts and argument of both cases, the Southern District of New York analyzed Prince's fair use defense in this case and in Graham v. Prince simultaneously and found that the balance of factors strongly favors against fair use and denied defendants’ motions for summary judgment. On the first factor, the district court found that Prince's use of both images was not transformative as a matter of law and such use was "undisputedly commercial." In deciding whether the works were transformative based on their "aesthetics and character," the district court found that the Prince's changes to the images, namely enlarging, cropping, and adding an Instagram border and comments, are not sufficiently transformative because "the images remain unobstructed, unaltered but for being cropped, and unquestionably dominant." Rejecting defendants' contention that the reasonable observer has both a "general interest in, and appreciation of" art as without merit, the district court found "a reasonable observer would likely identify Prince's alterations as (1) adding the Instagram frame and (2) showcasing his own comments." 

The district court found the works' artistic purpose similarly deficient to support a finding of transformative use. Notwithstanding Prince's “inconsistent” description of his artistic purposes in his deposition testimony compared to his declaration, even if the district court accepted that Prince’s works differed from the original images because his portraits are a critique of social media culture, such artistic intentions do not rise to the level of a satire or a parody of the original image.

The district court found the second and third factors also weighed against a finding of fair use. For the second factor, the district court was not persuaded by Prince’s assertion that the original photographs were factual and thus not sufficiently creative. The district court found that the third factor was reliant on a finding of transformative use and as such, use of almost all of the original photographs in his portraits weighs against him. 

The district court found that the fourth factor moderately favors the defendants. The district court agreed with defendants that the original photographs and Prince’s works attract different primary markets based on testimony from purchasers of Prince’s portraits, Prince’s “name recognition,” and evidence that McNatt and Graham continued to enjoy a market for their works after the exhibitions. However, the district court was concerned that even though the works are for different markets, “permitting Prince’s secondary use . . . without sufficiently transforming them or paying for them would allow other artists like Prince to do the same, which would disincentivize artists . . . from producing new works” in contradiction of copyright law’s purpose.

The district court further found that the Blum & Poe gallery book was an “ancillary work[]” and a finding that Prince’s portraits are not fair use precludes the ancillary works from the fair use defense. The defendants also did not meet their burden to show the Instagram post was fair use.

The parties came to a settlement agreement memorialized in final judgments of the district court. The final judgments find in favor of the Graham and McNatt, enjoin all defendants from selling, reproducing, or otherwise distributing the portraits and ancillary works (though do not require destruction), and order damages in the amount of five times the portraits’ prices.

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