Velvet Underground Settles Warhol Suit Over Banana Design

Photographer: Michael Ochs Archives/Getty Images

The album cover designed by Andy Warhol for The Velvet Underground record "The Velvet Underground & Nico" released on March 12, 1967. Close

The album cover designed by Andy Warhol for The Velvet Underground record "The Velvet... Read More

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Photographer: Michael Ochs Archives/Getty Images

The album cover designed by Andy Warhol for The Velvet Underground record "The Velvet Underground & Nico" released on March 12, 1967.

The Velvet Underground settled a lawsuit claiming that the Andy Warhol Foundation for the Visual Arts infringed a trademark for the banana design that appeared on the cover of one of the band’s albums.

U.S. District Judge Alison Nathan said in an order today in Manhattan that the case has been discontinued.

“The parties have reached a confidential agreement to settle the case,” Joshua Paul, a lawyer for the Warhol Foundation, said in a letter yesterday to the judge. Paul declined to comment further on the settlement. Christopher Whent, a lawyer for the band, didn’t respond to messages seeking comment on the settlement.

The foundation, which licenses merchandise based on Warhol’s designs, said that it owned the rights to the banana design he created for the band’s first commercial album. The Velvet Underground and its founders, Lou Reed and John Cale, sued the foundation in January 2012, claiming trademark rights to the banana design, which they said had become a “symbol, truly an icon” of the group.

The album, which was a commercial failure at the time of its release, has since been lauded by critics as one of the most influential rock recordings. It was released by MGM’s Verve Records, whose catalog was acquired by Vivendi SA (VIV)’s Universal Music Group.

Warhol Collaboration

The band, which formed in 1965 and remained active until about 1972, forged an artistic collaboration with Warhol. He designed the cover of the 1967 album “The Velvet Underground and Nico” using an illustration of a banana taken from an advertisement, according to court papers. Warhol died in 1987.

A copyright for the banana design was also at issue in the suit. The Warhol Foundation said it had agreed under a covenant with the band to not file any legal action against it over the copyright for the design.

The band nevertheless asked the court for a declaratory judgment that the foundation had no copyright interest in the design. The band said no copyright filing was made for the design and the ad from which it derived was in the public domain and ineligible for copyright protection.

Nathan denied the motion for the declaratory judgment in September, saying that the covenant between the band and the foundation eliminated any controversy over the copyright.

Warhol’s copyrighted works have a market value estimated at more than $120 million and the foundation has earned more than $2.5 million a year from licensing the designs, according to court papers.

The case is Velvet Underground v. Andy Warhol Foundation for the Visual Arts, 12-0201, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net; Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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