The U.S. District Court in Manhattan has dismissed the copyright claim filed by the Velvet Underground against the Warhol Foundation for the Visual Arts over the iconic “banana” image from the cover of the legendary The Velvet Underground and Nico album. Without reaching the merits of the claim, the court ruled that the Velvet Underground had agreed previously not to sue on any copyright theories. Reporting of the decision has been spotty at best, however, ranging from declaring a “win” for the Foundation, to suggestions that the copyright question was decided. In fact, the Court did not reach the copyright issue, and the Velvet Underground still has other trademark-based claims that remain very much alive and unaffected by the decision.
The image in question stems from Andy Warhol’s collaboration with the band in the late 1960s. He designed the album cover with the banana image, accompanied by his stylized signature, but unaccompanied by any copyright notice in the name of Warhol himself. The album was not an immediate success, but the image became an iconic one, and the record is now recognized as one of rock history’s greats.
Although the Velvet Underground had disbanded by 1972, it used the banana image to publicize a 1993 reunion tour and other publicity materials in the 90s. The Velvet Underground also licensed the image for a vodka commercial in 2001.
For its part, the Warhol Foundation licenses copyrights in a great number of Warhol works. Among those it has licensed is the banana image. The Foundation fired the first shot in 2009, accusing the band of infringing the Foundation’s copyright. The band countered that the Foundation had no copyright in the work, and that the secondary meaning acquired by the image over the years belonged to the Velvet Underground, not the Foundation. The acquisition of such secondary meaning can give rise to trademark, rather than copyright, protection, depending on to whom the meaning is attributable. Put another way, is the image iconic because it’s a Warhol, or because it is on a famous album? That is the trademark question.
The Velvet Underground sued under several theories. The first was a request for a declaration that the Foundation holds no copyright in the image. The others are trademark claims related to the meaning acquired by the image as it relates to the band. For reasons not explained in the order, after filing the complaint but before amending it, the Velvet Underground gave the Foundation what is known as a “covenant not to sue,” which is actually just what it sounds like. Specifically, it was an agreement not to pursue any claim “for infringement of any statutory or common law copyright in the Banana Design. . . .”
The Court held that the covenant not to sue eliminated any dispute about whether the Foundation has a copyright. This is an extremely narrow holding; the Court did not find that no disagreement exists about who has the copyright, but rather no party with standing to bring that disagreement is before the court. In other words, since the band promised it wouldn’t sue, the only relief it could seek is what is known as an “advisory opinion”—which the federal courts are forbidden under the Constitution from issuing. The covenant extinguished the controversy between the parties, even if the question remains unanswered. As the Court stated, the Velvet Underground “has simply expressed an ‘intangible worry, unanchored in time,’ that is ‘insufficient to support an “actual or imminent” injury’ and fails to present a justiciable controversy.”
The Court rejected the Velvet Underground’s argument that even without a claim over the copyright itself, the Foundation might assert the copyright as a defense to the trademark claim. Very much open, therefore, are the questions about the fame of the image as it relates to the band versus Warhol himself, questions that may provide interesting answers as the case goes forward. Any suggestions that the case is over are premature, indeed, a letter was just submitted to the Court asking for additonal time to engage in the fact discovery process.