via The Guardian:
Judge dismisses lawsuit by New York band over rights to banana image on their 1967 album sleeve
By Sean Michaels Tuesday 11 September 2012 07.13 EDT
A judge has dismissed part of a lawsuit by the Velvet Underground, over the rights to the iconic banana image that featured on their debut album. The band were told they do not have a valid copyright claim, though they may continue pursuing the Andy Warhol Foundation for the Visual Arts for trademark infringement.
In January, members of the Velvet Underground filed a lawsuit in New York, alleging that Warhol's banana print on the cover their 1967 album, has become "a symbol" of the defunct band. They demanded that Warhol's organisation stop licensing the image for use on goods such as iPod covers, and pay them for past licensing.
In response to this suit, the Warhol Foundation issued a binding legal covenant, promising to never sue the Velvet Underground, or related parties, for copyright infringement. They offered indemnity "under the current, former, or any future copyright law of the United States … [and] regardless of whether said claim arises from VU's or any other [related] party's past, current or future conduct".
On Friday, US district court judge Alison Nathan ruled that because of this covenant, there is no longer a copyright dispute. "Without a specific dispute over imminent activity, a declaratory judgment here would simply be 'an opinion advising what the law would be under a hypothetical state of facts,'" Nathan wrote (via the Hollywood Reporter). "The [US] Constitution gives this court no power to issue such an opinion."
It is still not clear who is the legal rights-holder for the banana design: Nathan has simply ruled that for the moment, it's irrelevant. The Velvet Underground can only proceed with the trademark aspect of their case, arguing that the Foundation's use of the banana causes "confusion as to … affiliation, approval or sponsorship" by the group.
The Warhol Foundation has responded by pointing to the fact that the Velvet Underground broke up in 1972. Trademarks are apparently only relevant if they are linked to an ongoing business, and the group is scarcely a going concern. According to court papers, it has been 11 years since the band last licensed the banana image, for an Absolut Vodka advert.
Last month, in what may have been a related move, the Velvet Underground announced plans to reissue The Velvet Underground and Nico on 1 October.