Patrick Cariou published Yes, Rasta, a book of his black and white photographs of the Rastafarian community in Jamaica, in 2000.

[3] Eight years later Richard Prince created Canal Zone, a series of art works incorporating Cariou's photographs.

These included printing them, increasing them in size, blurring or sharpening, adding content (sometimes in color), and sometimes compositing multiple photographs together or with other works.

[citation needed] In April 2013, the Second Circuit reversed the lower court, finding that most of Prince's works were indeed "transformative" to a "reasonable observer" and therefore fair use.

"A secondary work may constitute a fair use even if it serves some purpose other than those (criticism, comment, news reporting, teaching, scholarship, and research) identified in the preamble to the statute", wrote Judge Barrington Daniels Parker for the three-judge panel.

Judge Frank Easterbrook said the court was "skeptical", since they feared it could be read as displacing the other factors in the fair-use inquiry, to the point that almost any transformative use would be sufficient.

"[8] The Second Circuit acknowledged Kienitz as well as similar criticism in Nimmer on Copyright when it decided TCA Television Corp. v. McCollum in 2016, even as it called Cariou "[the] high-water mark of our court's recognition of transformative works".

Federal judge John Koeltl, who heard the case in the Southern District of New York, relied on Cariou to hold that the Warhol works were transformative, "add[ing] something new to the world of art and the public would be deprived of this contribution if the works could not be distributed", and so finding for the foundation on three of the four fair-use factors.

Acknowledging the same criticism it had in McCollum, this time Judge Gerard Lynch wrote:[12] While we remain bound by Cariou, and have no occasion or desire to question its correctness on its own facts, our review of the decision below persuades us that some clarification is in order ... [B]oth the Supreme Court and this Court have emphasized that fair use is a context-sensitive inquiry that does not lend itself to simple bright-line rules.

Rather, the secondary work itself must reasonably be perceived as embodying a distinct artistic purpose, one that conveys a new meaning or message separate from its source material.