This blog has looked at a number of cases related to the transformative factor in the context of fair use of artwork. Most recently, in Prince v Cariou.
This week, the issue has once more been addressed in a case filed by artist Derek Seltzer against American rock band Green Day.
Fortunately for us, the IPKat has posted a really helpful explanation of the background to the case, the main issues and the recent opinion of the US Court of Appeals for the Ninth Circuit. It can be found here.