The Velvet Underground and the Warhol Foundation for the Visual Arts have settled their lawsuit over the right to control iconic “banana” image from the cover of the 1967 legendary The Velvet Underground and Nico album.  An earlier September 7, 2012 ruling for the Warhol Foundation finding that that the Velvet Underground had agreed not to sue on any copyright theories left unanswered questions of whether the band had claim to a superseding trademark in the image that would allow it, and not the Warhol Foundation, to control the image’s reproduction.  The dispute is now over, and those questions will not be judicially resolved.

Andy Warhol designed the 1967 album cover with the banana image, accompanied by his stylized signature, but unaccompanied by any copyright notice in the name of Warhol himself (a formality which mattered more before more recent amendments to the Copyright Act).  The image became an iconic one, and the record is now recognized as one of rock history’s greats.  The Velvet Underground used the banana image to publicize a 1993 reunion tour and other publicity materials in the 1990s.  The Velvet Underground also licensed the image for a vodka commercial in 2001.

In 2009, the Foundation accused the band of infringing the Foundation’s copyright in the banana image.  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 as a trademark to the Velvet Underground, not the Foundation, by virtue of the album’s reputation.  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?

The Velvet Underground sued under several copyright and trademark theories, arguing that the meaning acquired by the image as it relates to the band (because of its association with the famous album) gave the band the right to control the image.  For reasons not explained in the 2012 order, and which will likely now never be known, 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 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.

The decision seemed to point to the possibility of interesting findings on that score.  In a single image that well-known, which was made by an already-famous artist for an initially-unsuccessful album, how do we account for the effect of the intervening 45 years?  It is unlikely that the manner in which the parties resolved the dispute will be made public.

If the outcome inspires nothing else, it’s worth another listen to a great record.