The late artist's estate lost its court battle against the famous photographer Lynn Goldsmith for his 'Orange Prince' series.
The trial judges ruled that Warhol's works based on Goldsmith's 1981 photo were not immune from the photographer's copyright infringement lawsuit.
The case has been closely watched in the art world and entertainment industry for its implications on the legal doctrine called 'fair use', which promotes freedom of expression by allowing the use of copyrighted works in certain circumstances without the owner's permission.
The Vanity Fair magazine had originally commissioned Warhol to produce an image of Prince to accompany an article on the celebrity, giving credit to Goldsmith for the source photograph. Warhol created 14 silkscreens and two pencil illustrations based on the photo Goldsmith had taken of Prince for Newsweek magazine in 1981, most of which had not been authorised by the photographer.