The Art Newspaper has more on the Richard Prince lawsuit, mentioned earlier here.
People keep mentioning Blanch v. Koons, but it's worth noting that Koons's use of the underlying image in that case seems quite different from the "purer" kind of appropriation that Prince is up to here (although admittedly I've only seen a couple of the relevant works). As the District Court decision in Blanch described it:
"[Blanch's] photograph shows the lower part of a woman’s bare legs (below the knee) crossed at the ankles, resting on the knee of a man apparently seated in an airplane cabin. She is wearing Gucci sandals with an ornately jeweled strap. One of the sandals dangles saucily from her toes. In Blanch’s original photograph, the airplane cabin setting included its floor, window, wall and part of a seat, a small portion of a fur garment, and a magazine on the floor by the man’s seat. .... Koons copied only the model’s legs, feet, and Gucci sandals as one component in his painting .... Koons omitted the background and all its details. There is no airplane cabin, lap, magazine or other detail from Blanch’s picture. The legs are not represented as level (resting on a lap) but as hanging vertically, with three other pails of women’s legs and feet (eight legs and feet in all, roughly parallel to each other)."
"[Koons] included in the painting only the legs and feet from the photograph, discarding the background of the airplane cabin and the man’s lap on which the legs rest. Koons inverted the orientation of the legs so that they dangle vertically downward above the other elements of [the painting] rather than slant upward at a 45-degree angle as they appear in the photograph. He added a heel to one of the feet and modified the photograph’s coloring. The legs from [Blanch's photograph] are second from the left among the four pairs of legs that form the focal images of [the painting]."
And from the Second Circuit's opinion:
"As Blanch testified in her deposition, her key creative decisions in the shoot were the choice of an airplane cabin as a setting and her placement of the female model's legs on the male model’s lap. But neither the airplane background nor the man’s lap appear in [the painting]. It depicts only the woman’s legs and sandal-clad feet."
I want to be clear that I'm not saying Prince's work here is not, or should not be seen as, transformative and therefore a fair use. Just pointing out that Blanch v. Koons is not the get-out-of-jail-free card that some seem to think it is.