Give and Take: on Jeff Koons mastering contractual and statutory relationships with other artists

By Madeleine Conlin*

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Photo by Jeff Ferzoco

Contemporary blue-chip artist and controversial figure Jeff Koons has long been known for developing concepts, then leaving the implementation of his designs to studio assistants to execute the vision. Historically studio assistants are young or mid-career artists who specialize in drawing, painting, photography, sculpture, and other mediums necessary to making their employer’s ideas a reality. Drawing inspiration from a number of predecessors and contemporaries, including French-American artist Duchamp and his readymades, Ukrainian A. Rogers, and many of the old European masters, Koons describes his art in terms of its potential to help him and others achieve “a higher level of consciousness.” However, despite his unconventional creative process, Koons does not consider the contributions of his studio workers to go beyond those of hire help, and affirms that all of his work is entirely his own since they merely follow instructions, and are not allowed creative liberties. Koons sees himself comparable to a fashion designer, who creates an idea, then employs other individuals to make the product.

Screen Shot 2017-07-07 at 2.08.52 PMThe method of producing art with help of others, perhaps better skilled, is not new and many, from Andy Warhol to Gerhard Richter, have relied on studio assistants to make art. The subject of employment and labor law in the arts is, however, less well known. In 2015, efforts were initiated by several Koons workers to form a union; however, these attempts were thwarted by a series of layoffs which continued over the course of the next few years. In July of 2016, an article in Art F City announced that many of Koons’ workers were laid off in the preceding week (the same workers had begun to form a workers union in the months just before this occurred). Based on what the anonymous source told Art F City, Delaware-incorporated company Jeff Koons LLC fired everyone who had started working for the corporation after June 1st, 2015. Another downsizing occurred recently, and the company fired half of its painting staff on June 13, 2017. This cut the number of painters down to 30 from its previous 60 person team. Some of the assistants that Jeff Koons LLC laid off in June were employed by the artist for over a decade. In all, there have been 3 reported rounds of layoffs since 2015, each around the same time of year. While the reasons for laying off all of these artist-workers were not publicly given, the first one seems to have coincided with the workers’ unionizing processes. This timing has led to speculation by some that perhaps the two actions are related.

Unions are formed to maintain a balance of power between employers and employees, and to ensure that employers uphold certain practices, some of which include fair wages, benefits, and reasonable working conditions. Union formation, however, is a complicated process. First, an individual must petition their coworkers to form an organizing committee. Then, the committee must meet with legal counsel, or with a chosen union representative. Based on this meeting, the group can decide if the union would be effective and useful in their own workplace, and if so, each must fill out a union authorization card. Union representatives and individuals from the organizing committee are responsible for garnering interest and support from roughly 75-80% of their coworkers in order to formalize the union. Once the target percentage has been reached, each interested party member must fill out and file union authorization cards with the National Labor Relations Board and petition for an election. This election request is then processed by the board, which will subsequently conduct a secret ballot election at the workplace to ensure that the majority of members actually wish to be represented by the union. If so, then the board will certify the union, which means that by law, the employer must bargain in good faith with the workers’ union. Moving forward, the union and employer can work together to address issues or concerns in the workplace, and eventually create new contracts regarding the working conditions (that again, must be voted on by every worker later on). Unionizing, while incredibly useful for balancing the power between authority figures and workers, is not an easy process — to say the least.

While it is unknown whether or not Jeff Koons LLC did indeed fire its workers for unionizing, if they did, it could mean trouble for the company. According to the National Labor Relations Act (NLRA), it is illegal for employers to:

  • Prohibit [employees] from soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms;
  • Question [employees] about your union support or activities in a manner that discourages [them] from engaging in that activity;
  • Fire, demote, or transfer [employees], or reduce [their] hours or change [their] shift, or otherwise take adverse action against [them], or threaten to take any of these actions, because [they] join or support a union, or because [they] engage in concerted activity for mutual aid and protection, or because [they] choose not to engage in any such activity;
  • Threaten to close [their] workplace if workers choose a union to represent them;
  • Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support;
  • Prohibit [them] from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances;
  • Spy on or videotape peaceful union activities and gatherings or pretend to do so.

The NLRA is explicit in that union members cannot be fired for joining, starting, or partaking in the union in any way. The state of New York provides additional protection for employees through the New York State Employee Relations Act, which states that union members also have the right to organize, bargain collectively, and to strike. If Jeff Koons LLC fired its workers for their unionization efforts, the company could face legal consequences. In the earlier 2000s, Koons had as many as 120 assistants in his studio, but after cutting the staff in half more than once in the last few years, sources claim that there are only about 30 people still working for the company. There has been no account of any successful union formation. Reportedly, some of the laid off studio assistants threatened to bring legal action against Koons in 2015, but none have been reported yet. As of now, no new action has been taken, and it is unclear whether or not the union workers or any of the ex employees will be filing against Jeff Koons LLC for interfering with the unionizing process. A savvy businessman, Koons probably has his contractors sign Non Disclosure Agreements (NDAs), as none of the reporters for these cases have not been able to gather much information from the studio assistants and individuals who were fired. Jeff Koons LLC was filed with the New York State Department of Corporation in 2005 as a foreign limited liability company, and it is likely that the workers’ compensation is handled through the company, as well as other financial matters.

These labor law concerns are only the newest emerging conversations relating to Koons’ non traditional style of creation. His employment of assistants has been a topic of discussion for many years. In an interview in March 2016, in which Koons opened up about his creative process and the concepts behind his art, the interviewer asserted that he seemed not to “suffer in solitude” like some renowned artists do, and called his work “communal art.” Koons responded to this insinuation emphatically: “My work is generated from myself and it comes from a process of following my intuition and through letting things resonate over a period of time. I’ve had people around me who … I’ve been able to use to help me realize some of these different works. But at the end of the day, I’m responsible for everything. So the creative process is not communal. I’m in front of it, because it’s the gesture.” Koons takes an approach to his work that mimics the style of esteemed clothing designers, architects, or a company’s “idea man.” While he leans on other artists to assist him in creating the physical manifestation of those ideas, the art would not exist without his conceiving of it and directing his team in its implementation.

As a widely known and too-big-to-fail artist, Koons frequently stands in the public eye, and each of his pieces faces immense scrutiny, making his attention to detail and desire for perfection extremely important to the success of his work. According to Koons, one key part of grasping one of his pieces is to understand what he is trying to accomplish on a conceptual level. Koons does not place as much emphasis on the process, as on the discovery of higher states of beauty, or the bringing together of polarities through his work. It is the outcome and presentation of each piece or series that Koons finds most salient; it likely does not hurt that the financial rewards are ever-expanding. He often states that he wants his work to express broader ideas — where some artists, such as Jackson Pollock, are very focused on the motions and methods of the production of art, Koons focuses on delivering a message through design concepts: “I believe in communication. That’s how I think about the viewer. It’s not to get any response from them, other than what I put into it… the excitement, the energy. You know, I make something because I’m in awe and wonder of what that idea is and what that will be like. I’m excited by it. I just want them to feel that.” Since the outcome of the piece matters most, it needs to achieve the degree of perfection Koons envisions to succeed in his mind.

In 2012, a few years before the first round of layoffs, John Powers, a 21 year old art student who worked for Koons at an hourly rate of  $14, described his experience with Koons in the New York Times. Powers spent most of his time painting in a color-by-numbers-esque fashion. He worked three nights a week and on Saturdays for around five months, spending his time in the studio working tediously on a highly detailed piece titled, “Cracked Egg.” (The painting was accidentally destroyed in the studio and a second edition of the same piece was begun and later sold in 2003 at a London Christie’s auction for $501,933). Illustrating Koons’ perfectionism in the studio and in his creative process, Powers stated that Koons would frequently fire individuals who failed to meet his standards. Powers managed to please Koons during his painting endeavors, but he only stayed with the studio for about six months total, quitting soon after the destruction of the first version of the piece. While some, like Powers, only work for a very brief time in the studio, Koons has had a loyal following of several assistants who, until recent layoffs, had been with the studio for over 10 years.

Perhaps Koons demands a lot from his workers, but that is not necessarily unusual — many work providers have high expectations for their hirees, especially if they wish to make a profit. Based on numbers and name recognition Koons seems to succeed. Some of his works have made record prices at auction, and he is broadly recognized as one of the most financially successful living artists. One especially lucrative piece, Balloon Dog (Orange) (1994-2000), sold for $58.4 million dollars in 2013 at a Christie’s auction, setting the reported record at the time for the most expensive piece of fine art by a living artist sold at auction. Koons made five unique Balloon Dogs (Magenta, Yellow, Red, Blue, and Orange) from stainless steel with different color coatings as part of his Celebration Series, with the help of the roughly 120 assistants who worked for him at the time. Other pieces have reached similar lofty prices at various auctions, including Jim Beam – J.B. Turner Train (1986), which sold for $33.7 million, Tulips (1995-2004), which sold for $33.6 million, and many more, all of which have been purchased for upwards of one million dollars, and all created by the workers in his studio. Koons works, regularly produced as multiples, draw upon a variety of techniques and skills that are not mastered by the mastermind behind them. While his artwork is often pricey to create, since he often works with materials such as stainless steel or porcelain, the sale revenues from each piece or series can be tremendous. He does not confine himself to working with any particular gallery, but rather shows his work in various museums, galleries, and auctions houses, and even works as a contract artist for interested — and affluent — buyers.

For workers like Powers, an art student at the time of his employment, it is likely difficult to reconcile the amount of pay received and the high-pressure work environment of the Koons studio with these sale prices and the fame of the pieces, much of which is not credited to the literal makers. Current minimum wage laws in New York City (as of December 31, 2016) require companies with less than ten employees to pay at least $10.50 per hour and companies with eleven or more employees to pay at least $11.00 per hour. Koons seems to have been clearing the pay standards, at least according to the sources that spoke with Artnet News and Art F City. Many of the artists fired this year were earning about $21 per hour, a higher rate than the one Powers received for his work in 2012 ($14 per hour). The difference in the hourly rate reported in 2012 and in 2017 may be reflective of terms negotiated by Koons in 2015 with his employees to discourage them from forming a union at that time, or due to increased profit since then. Artnet News reported that according to their source, some of the individuals fired this time had also not received severance beyond the last day’s pay (which, if promised upon their initial hiring, would be another breach of the NY State Employee Relations Act). New York State laws do not mandate that employers offer benefits or wage supplements, but if they are offered verbally or in writing upon the employment of new workers, failure to comply to those agreements is considered a misdemeanor. The original reasons behind the studio assistants’ desire to form a union in 2015, and current possible explanations for firing these workers, both remain obscure.

In statements, Jeff Koons LLC has publicly attributed each round of cuts to substandard sales and downsizing, or to a lower need for labor due to smaller or fewer projects. This would be reasonable, except that Koons’ other financial actions and ongoing projects do not seem to match those claims. In 2015, the year in which the first round of cuts were made, and the same year that some of the workers began to unionize, Jeff Koons LLC spent $23.7 million on purchasing three new adjacent studio spaces in Hudson Yards, with plans to move into the larger site from their current Chelsea location. Even earlier, in 2014, Koons spent an estimated $4.85 million constructing a 21,726 square-foot mega-mansion out of two neighboring houses on the Upper East Side. Perhaps then, the cuts are not financially incentivized, but rather due to a basic lack of need for assistance in his studio. Koons stated that he was not working on any major shows in 2015, hence the layoffs, although the Gazing Ball series of paintings with sculptures went on view that year in November. Since 2015, Koons has worked on collaborative projects with Burton (2014-2016), Google (2016), and Louis Vuitton (2017-ongoing) on snowboard designs, iPhone cases, and a designer handbag collection. Other “solo” (non-collaborative) works that he has completed since 2014 include his piece Bouquet of Tulips (2016), Gazing Ball (Bottlerack) (2016), Seated Ballerina (2017), eleven new editions of previous paintings and sculptures, and various contract-based pieces. He has also reportedly become involved in the development of virtual reality-based art in the past few months. And yet, each year for the past three years, during the summer months, Jeff Koons LLC has made substantial cutbacks to his studio staff, which leads to the question, why?

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Given his impressive legal and financial footprint, it is worth remembering that Koons had to work his way up to his international stardom. He too worked various jobs similar to the positions of the studio assistants he employs now, including a position selling memberships at the Museum of Modern Art in NY, where he worked as a young man scraping to get by. He even worked as a studio assistant for Ed Paschke, where he worked so hard that he would sometimes go home with bloody fingers from stretching canvases. Koons’ baggage and meteoric rise from a MoMA public services employee to a world famous artist, as popular as he and his works have become, is constantly subjected to public scrutiny, including his record sheet as an employer.

Select Sources:

*About the Author: Madeleine Conlin is a rising Junior undergraduate at Yale University studying Psychology and English. She is spending the summer as an intern at the Center for Art Law. She can be contacted at madeleine.conlin@yale.edu.

Disclaimer: This article is intended for educational purposes only and is not meant to provide legal advice. Any views or opinions made in the linked article are the authors alone. Readers are not meant to act or rely upon the information in this article and should consult a licensed attorney.

 

Post Co-Authorship and Past Congeniality: Creative Relationship Spoils

By Colby A. Meagle*

Screen Shot 2017-06-28 at 10.51.01 AMSynergy is the sharing of talent and ideas, the combining of two or more minds in order to produce a product superior to anything one is capable of creating alone. Partnerships may look like a constructive arrangement, one where everyone benefits, and maybe that is the case at the beginning, but what happens when the relationship falls apart? What is the consequence of that fleeting love affair, or late night bar fight? In the context of art law and partnerships dissolving, who gets custody of the “kids”, a.k.a. the artwork? Artists are romanticized for their passionate relationships that include both personal and work related matters. But all too often these fiery affairs go up in flames and the issues of authorship and ownership are brought front and center. The following is a review of three recent legal battles that have highlighted these difficulties, as well as a brief discussion on the prominent applicable laws that underlie the arguments.

Cases & Controversies

In a pending case Chan v Schatz, authorship is in dispute.  Generally, to determine if work has been co-authored courts look at the intention of the parties to create a joint work. If the intent is lacking, it is likely not a joint work, but they also consider if there were substantial contributions made to the work, and the extent of control exerted over the work (Aalmuhammed v. Lee). Artist Eric Chan, well known for his abstract paintings and sculptures, is in the midst of a divorce from Heather Schatz. The split has prompted him to take precautionary actions by filing suit for a declaratory judgment naming him the sole creator of his works, therefore excluding Schatz from a co-authorship claim. He, represented by Lindsay Elizabeth Hogan of Grossman LLP, and she, now represented by Andrew Berger of Tannenbaum Helpern Syracuse & Hirschtritt LLP, were married in 1992. The suit encompasses 1139 works created during the span of their quarter century marriage.

While Chan and Schatz lived and worked together Schatz appears to have provided assistance in managing the studio. While Chan admits Schatz occasionally provided advice, and suggested concepts for pieces, he maintains in his complaint that, “her contributions were not themselves fixed independent creative expressions.” Furthermore, Chan “never intended that [his wife] would be his co-author,” rather, throughout the entirety of the relationship his understanding was that he was unequivocally the sole author of his works. This is despite the fact that the work was and is displayed under the joint name “ChanSchatz,” which he claims was merely a homage to his relationship and love for his wife.

However, Schatz feels differently. She asserts that her contributions were significant, as proven by the use of the joint name and their long history of working together publicly. As such, Schatz feels entitled to be credited as a co-creator of the work. So, while Chan maintains there was no intent for co-authorship, Schatz claims that her contributions were material.  

Chan is seeking to resolve this controversy by approaching the court for a declaratory judgment “that he is the sole author of all of the Chan Works” (Chan Complaint). A ruling in his favor would grant him status as the only author, and to full intellectual property rights over the art. Conversely, if the court side with Schatz, then the rights and credits will be shared between the two now-estranged lovers. The case is to be tried to a jury, with amended complaints due in July, 2017.

Another couple that frequently appears in the public eye, Marina Abromović and Frank Uwe Ulay, have also faced their fair share of legal issues. Following their tear-jerking reunion at Marina’s retrospective, Ulay filed suit as a citizen of Holland in Dutch courts in retribution for a breach of contract relating to joint works created before the duo’s split in 1988. Ulay was eventually awarded twenty percent of the net sales of their work by Amsterdam courts, in accordance with the contract they signed in 1999, along with legal fees and backdated royalties (theguardian.com). Abramovich v Ulay highlights how important it is for artist couples to document their arrangements. Without the contract, Ulay would have faced a more difficult legal battle in the pursuance of receiving fair compensation for his contributions.

Payment was not the only issue addressed in the Dutch filings:  attribution for future displays and documentations was also resolved. The question of whose name comes first may seem insignificant, but to many artists it is of the utmost importance, marking one as superior or more influential if named first. The courts decided that works from 1976 to 1980 be listed as by “Ulay/Abramović” and those from 1981 to 1988 as “Abramović/Ulay.” It is possible that the courts considered, based on the evidence presented, whose artistic vision was dominant in creating the work during those times to determine this order, although their reasoning for this specific division was not explicitly stated. Regardless, the suit is evidence that even the seemingly minute details, such as the name order, can cause conflict, and should be considered when drafting a partnership contract.

Artists involved in romantic relationships are not the only ones at risk of authorship and credit-related legal issues: friends and acquaintances can face similar  difficulties. Moi v Chihuly Studio, inc., is instructive. In his complaint, Michael Moi alleges that renowned glass artist Dale Chihuly not only took credit for work they created together but refused to pay him at all over a period of fifteen years. Plaintiff Michael Moi worked as studio assistant to Chihuly from 1999-2014. His contributions included helping in the creation of paintings, which he claims to have co-authored, as well as forging Chihuly’s signature– under the direction of the artist — on numerous pieces. The visual works he helped produced were consequently sold to the benefit of and attributed only to Chihuly. During his time working for Chihuly, Moi was “repeatedly and consistently” promised future compensation, and Moi relied on their friendship as assurance that this was true, and that he would eventually be paid. However, the complaint puts forth that, at no point did Moi receive the promised payment. Chihuly denies the claims, stating that he has long employed studio assistants, and that the suit is merely an attempt to extort him. Moi is seeking the recovery of damages for the missing payments and proceeds of his work under the Copyright Act and the Visual Artists Rights Act (VARA).

The lack of an employee contract is important here, because without it Moi may not have any claims to the intellectual property. Under the typical contract for work or contributions to work, the creator remains the author, and the owner/contractor of the work retains all the economic rights to the work, including its copyrights. Thus, a pivotal point in the case for his claims under the Copyright Act, may be whether he was a partner and co-author of the work, or an employee of the studio.    

Conflict Foresight/Preparation

How might disputes over authorship between collaborators (spouses or business partners) have been avoided? One possibility was to have a private agreement detailing the nature of their working relationship, including exactly who would be credited as the author of the works. The agreements could also have covered various other issues of copyright ownership for the works, along with ownership of the physical pieces if a split were ever to occur. The value of the initial challenges forming these contracts would far outweigh the difficulties the pairs now face in resolving their disputes.

Artists Jack Beal and Sondra Freckelton provide an example of this forward-thinking precautionary action. Sondra was a successful sculptor in the 1970’s before she transferred into watercolor painting. Her husband Jack Beal was an American realist painter until his death in 2013. The two included a written agreement in their marriage certificate to provide that they would have an equal partnership in both marital and artistic endeavors. Sondra felt that this agreement was extremely important to maintaining her valued independence as artist, as well as to ensuring that her husband and his career would not overshadow her own.

However, the reality is that most artists, and people in general for that matter, are not anticipating the demise of a relationship upon its commencement. For this reason, contracts are rarely drafted, and often one partner could even feel insulted by the other for asking for official documents to be created – seeing it as a testimonial to the relationship’s inevitable demise. So while the creation of a contract in every working relationship is ideal, the frequency of their actual existence is much smaller. Even if one does manage to make a contractual agreement, there may still be issues of enforcement depending on the contract’s nature and terms, as evident by the Abromović – Ulay suit.

That is not say that one can’t go overboard with preparation. One couple made Internet news, when their specific contract request went viral. The couple was getting married and in need of a wedding photographer. The odd part is, they wished to include a clause in their contract stipulating that if they ever got divorced they would receive a full refund for their photographs, as they would no longer need them. Needless to say, they had quite a difficult time finding someone willing to accept such an agreement (PetaPixel.com). So, while planning is encouraged, it is possible to go too far. One should find a happy medium, somewhere between a fully stocked fallout bunker and never getting a flu shot, perhaps the contract equivalent of a first aid kit.       

Distribution of Assets: Tangible and Intangible

When relationships end, many artists may be surprised to learn that in most states, artwork is considered marital property unless provided otherwise in a prenuptial agreement. This means that during a divorce, artwork is part of the property that is divided 50/50.

In relation to works created by one or both partners, the first step is to make an accounting of all the works made and sold during the marriage and their location. It is worth remembering that works in progress should be included. This step should be taken seriously since in the case of an accidental omission, one could face charges for fraud, and the other spouse could either keep the omitted work or all the profits from its sale. The work must also be assigned a value, perhaps a touchy subject. But if both sides can agree, it can be much simpler and faster to have a single appraisal completed than arguing over whose is correct.

Copyright should also be kept in mind during the distribution of assists. Although the work may be going to both parties, the copyright remains with the original creator and must be transferred separately to the new owner. This becomes important if the spouse who holds the work but did not create it wishes to sell the work or license it, as they will need the corresponding rights. The transfer of which must be explicitly detailed in the allocation of the artworks during the proceedings. It is also important to note here, that in the case of co-authors, each author has equal copyright rights.   

Lastly, there are issues that may arise under VARA (the Visual Artist Rights Act of 1990). VARA provides some protection to the artist’s work regardless of ownership. It allows, among other rights, “the right to prevent distortion, mutilation, or modification that would prejudice the author’s honor or reputation”. This means that in the case of a rather heated divorce you shouldn’t plan on keeping your spouse’s work only to burn it in a fit of rage or revenge, to do so would be a violation of their rights and you could face charges (not equal in value to the fun of your bonfire).

Conclusion

In summary, matters of heart and business are complicated, throw art into the mix and you have a recipe for calamity. Whether it is determining who receives credit for the work, or who ultimately gets to keep the work, small steps along the way in contractile prep paired with a little legal advice can lead to less headache, if not less heartache in the long run.

Select Sources:

  1. Complaint, Moi v. Chihuly Studio, inc., (Wash. Super. 2017).
  2. Complaint, Chan v. Schatz, 1:17-cv-03042 (S.D.N.Y. Apr. 26 2017)
  3. THE VISUAL ARTISTS RIGHTS ACT OF 1990, 136 Cong Rec E 3716
  4. 17 U.S.C.S. § 101 (LexisNexis, Lexis Advance through PL 115-37, approved 6/2/17)
  5. Ben Quinn and Noah Charney, Marina Abramović ex-partner Ulay claims victory in case about joint works, Sep. 21, 2016, available at https://www.theguardian.com/artanddesign/2016/sep/21/ulay-claims-legal-victory-in-case-against-ex-partner-marina-abramovic
  6. Nichole Martinez, What Happened to Art in a Divorce? [Hint: Get an Art Appraiser], Nov. 8, 2016, available at https://artlawjournal.com/art-appraiser-divorce/
  7. Daniel Grant, Love and Marriage, Artist Style, Dec. 17, 2010, available at http://www.huffingtonpost.com/daniel-grant/love-and-marriage-artist-_b_784179.html
  8. Christies, How deep is your love?, last visited Jun. 12, 2017, available at http://www.christies.com/features/10-most-famous-art-couples-of-20th-century-7062-1.aspx
  9. Noah Charney, Ulay v Marina: how art’s power couple went to war, Nov. 17, 2015, available at, https://www.theguardian.com/artanddesign/2015/nov/11/marina-abramovic-ulay-performance-art-sued-lawsuit
  10. Columbia Law School, Keep Your Copyrights, available at, http://www.law.columbia.edu/keep-your-copyrights/copyrights/know-your-rights/joint-works
  11. PetaPixel, Wedding Photographer Asked for Refund Guarantee in Case of Divorce, (2017), available at https://petapixel.com/2017/06/07/wedding-photographer-asked-refund-guarantee-case-divorce/
  12. Aalmuhammed v. Lee, 202 F.3d 1227 (9th Cir. 2000)

*About the Author: Colby Meagle is a 2019 J.D. candidate at Pepperdine University School of Law. Prior to law school, she received her B.A. in Arts Administration and B.F.A from Elon University in 2016. She can be reached at colby.meagle@pepperdine.edu

Disclaimer: This article is intended for educational purposes only and is not meant to provide legal advice. Any views or opinions made in the linked article are the authors alone. Readers are not meant to act or rely upon the information in this article and should consult a licensed attorney.

 

WYWH: Introduction to Estate Planning for Artists in “Your Art Will Outlive You”

 

By Heather DeSerio

The subject of what life keeps in store for artists’ legacy when they are no longer around to protect their works is of increasing interest to auction houses, galleries, heirs and artists themselves. On January 11, 2017, the New York Foundation for the Arts (NYFA) in conjunction with the New York State Bar Association’s (NYSBA) Entertainment, Arts, and Sports Law Section (EASL) Committee on Fine Art and NYSBA’s Pro Bono Committees hosted an event, entitled “Your Art will Outlive You- How to Protect It Now,” which took place in Dumbo Brooklyn, New York. The panel of lawyers and art professionals presented a two-hour overview to artists and art professionals about what an artist can do to protect their work now, rather than wait until after they pass away.

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Source: Heather DeSerio

 

There were six key speakers: Judith B. Prowda of Sotheby’s Institute of Art, Carol J. Steinberg of Law offices of Carol J. Steinberg, Elisabeth Conroy of Edward W. Hayes, P.C., Declan Redfern who is a Partner at Kayser & Redfern, LLP, Peter Arcese, practicing T&E attorney and an Adjunct Professor at the NYU School of Continuing and Professional Studies, and Alicia Ehni, an artist and Program Associate at NYFA Learning. The majority of those in attendance were artists, with at least one conservator and a recorder for estate processing. NYFA, a nonprofit organization with a mission to “empower emerging artists and arts organizations across all disciplines at critical stages in their creative lives and professional/organizational development” created its own “Take Aways” for the event that can be found here.

While artists tend to shy away from legal topics, this sold-out event was clearly of interest and tackled such fascinating and complex topics as will drafting, estate planning for artists, establishing artist foundations, gifting artwork while living, copyrights, and forming artist cooperatives. The following is a summary of the discussion that took place.

  1. Wills

Elisabeth Conroy, an Associate at Edward W. Hayes, P.C., started the stimulating presentation on estate planning for artists by giving an introduction to what a will is and followed up by providing the requirements for a valid and enforceable will. The five requirements are that (1) the will must be in writing; (2) must be signed by the person whose will it is, which is called a testator and they must be 18 years old; (3) signed at the end of the will; (4) published, meaning that there is an acknowledgement that this is your last will and testament; and (5) at least two witnesses must sign in the presence of the testator within 30 days of one another. Additionally, she spoke about choosing an executor of the will, types of bequests, joint wills, how to store and update a will when major life changes occur such as marriage, divorce, and children. Conroy mentioned that while an attorney is not required to create a will, it may be a good idea because using an attorney to draft and execute a will creates a presumption of the will’s validity. She also highlighted the commonly overlooked importance of having a living will and a health proxy, because designating someone to make health decisions if a person becomes incapacitated is a good idea. She ended her remarks by recommending that people should execute a Health Insurance Portability and Accountability Act of 1996 (HIPAA) authorization so the person that serves as the health proxy will also have access to a person’s medical records to make important life decisions.

  1. Estate Planning for Artist- Trusts, Foundations, Fiduciaries, and Valuing Art

Peter Arcese is a trusts and estates practitioner who also serves as an Adjunct Professor at NYU School of Continuing and Professional Studies. He delivered quite an impassioned and intriguing presentation about estate planning for artists and why it is unique for artists. He highlighted various types of trusts that exist. Arcese repeatedly stressed the importance of appointing a qualified fiduciary. A qualified fiduciary means the fiduciary should understand what the artist’s intentions are and be competent enough to deal with auction houses, the artist’s family, lawyers, and accountants. Arcese also noted that a fiduciary should be savvy and knowledgeable enough to make decisions that are in the best interest of the artist and can deal with complex issues that may arise pertaining to funding the foundation and overseeing the administration of the estate. In addition, it is important that the fiduciary does not engage in self-dealing. This is so that the artist would avoid many problems that other artist foundations have faced such as was illustrated by the infamous Rothko case.

Art valuation is a complex topic that was briefly discussed on several occasions. Arcese told the audience about the important benefits of achieving discounts for the benefit of taxation of the estate when an artwork is sold. He pointed to the David Smith case and the DeKooning case.

One of the questions asked during the event was about the availability and reliability of art appraisals for lesser known artists. He responded that a person should try to find a highly qualified individual with a good reputation to appraise the artworks and give an estimate. This can usually be done by an auction house or qualified appraiser. There was no definitive clear answer to a follow-up question about whether the appraisals are correct, but, Arsece told the audience, “It should be based on the fair market value or what one would get at auction.”

Funding the Foundation:

Artist foundations have got their initial funding in ways such as:

  1. Borrowing money: The Adolph and Ester Gottlieb Foundation borrowed the first $10,000 to make grants and started with nothing else.

(*The Adolph and Ester Gottlieb Foundation was the first foundation to give money to artists.)

  1. Funded by select gifts of art to the estate to sell off, and the proceeds are used to help get the initial funding started.
  2. Facilitate exhibits of works in estate’s collection.
  3. Publish a catalogue raisonné of the artist’s works.
  4. Licensing of the copyrights in accordance with the artist’s wishes.
  5. Life Insurance Policy: The funds received can be directed to help fund the establishment of the foundation to help pay for the initial cost of the foundation.

During Arsece’s abridged discussion about artist foundations, he emphasized key points. First, how important it is for all artist to leave clear directions about what to do and directions that layout the vision for the foundation. Next, he pointed out that foundations can be created during the artist’s lifetime or created upon death. In conclusion, Arsece reviewed the types of foundations: there are public foundations, which are based on the corporation structure, and there are also private foundations that are run by family members or named individuals by the artist.

Many questions from the audience concerned matters of funding the artist foundation and tax issues. One question specifically asked if it is a good idea to create a trust to minimize taxation in comparison to having a will. The answer was a resounding yes from several the panelist that confirmed that a trust can save on taxes. There is a one-time credit that the IRS Code allows of up to $5,500,00.00 of the value of artwork that is not subject to taxation. This exempt amount of artwork can be set aside in a trust and will not be taxed again. The monetary value of artwork is determined from the date when the artist passes and the appreciation in value of the work is free of taxation. It is advised to consult an attorney that is experienced in setting up trusts so that they tailor the plan to accomplish whatever tax savings are best depending on the individual’s goals.

  1. Artist that Gift Artwork During Artist’s Lifetime

Declan Redfern, a partner with Kayser & Redfern, LLP, with more than three decades of Trust & Estates experience including litigation both in the U.K. and the U.S. Redfern drew upon his experience to illuminate another important aspect of artist devising their property during their lifetime by elaborating on the differences between gifting an artwork during the artist’s lifetime (inter vivos gift) and how the copyright exists separately from giving of the physical work itself. An artwork’s copyright does not automatically transfer just because the physical object is gifted to someone.

When a living artist gifts artwork to someone, there are three general requirements that must be established to prove that it was an inter vivos gift: First, there has to be an intent to divest the title by the donor, second the acceptance of artwork by the donee, and third, delivery of work from the donee to the donor. Once all three requirements have been established, then an inter vivos gift has been perfected and it is no longer part of the artist’s collection.

Redfern highlighted several issues with gifting. Each example indicated problems with trying to figure out what happened with the gift during the deceased artist’s lifetime when there was conflicting circumstances, conflicting documents, or the artist’s intent was not clear. These examples illustrate that it is imperative for artists to make their intentions clear in written document that clearly describes their intentions at the time when they gift is given and indicates what rights are intended to be gifted.

He concluded his presentation by talking about the Deadman Statute. It is an evidentiary rule that applies in court when trying to establishing if a gift was actually gifted because one cannot rely upon what a Deadman told a person. There must be documentation that is notarized by a disinterested party to defeat a Deadman Statute. This also helped reinforce the idea about getting things in writing and even notarized by disinterested parties so that a person can establish that an inter vivos gift was intended to be given by the artists and if any copyrights were granted with the inter vivos gift besides possession of the artwork.

  1. Copyright Law

Carol J. Steinberg, one of the organizers of the program as well as a speaker, discussed copyright law because these rights are important for artists to consider when a person is creating an estate plan for the artist’s artwork. She stressed the importance of understanding that the law grants artists six set of copyrights, which exists separately from the physical artwork itself. Under the Copyright Act of 1976 Section 106 the six different rights are:

  1. the reproduction right;
  2. the right to prepare derivative works based upon the copyrighted work;
  3. the distribution right of copies or phonorecords;
  4. the right to perform the copyrighted work publicly;
  5. the right to display the copyrighted work publicly; and
  6. for sound recordings, the right to perform the work publicly by means of a digital audio transmission.

Steinberg also informed the audience that artists can choose to retain or assign the six different copyrights independently from one another. The assignment can be done while the artist is still living or upon the artist’s death in a testamentary document that indicates the artist’s intentions for the artwork’s copyrights.

She tied it all together by mentioning that the copyrights are commonly administered after the artist death by the artist’s foundation or estate in accordance with the artist’s wishes as indicated in the artist’s testamentary documents. This is an important remark because with the rise of the internet there has been an increase in litigation involving issues such as the unlicensed reproduction, distribution, and creation of derivative works involving items such as a catalogue where the artwork is reproduced in a picture or a reproduction of the artwork is displayed on a picture on a website that features the artwork. Sometimes this occurs when owners of the physical artwork fail to realize that they need a license from the artist’s foundation or artist’s estate which are in charge of administering the artist’s copyright in a work of art after the artist is deceased. This licensing of an artwork’s copyright is necessary to ensure that another is not infringing on the artist copyrights that are still retained by the artist’s foundation or estate.  

  1. Artist Cooperatives

Alicia Ehni, the Program Associate at New York Foundation for the Arts, suggested to the audience of the program that artists should form cooperatives consisting of artists, curators, collectors, and other key players in the art world. This would benefit artists because it would  get their work seen by other professionals in the art world, which in turn gives them the exposure they need to potentially get placed in shows and museums. An increase in an artist’s visibility and prominence in the art world helps artists to increase their collectability and raises their value in the art market. A trickle effect results in more work being produced by an artist as they sell more work. Once an artist increases their work output, then there is a greater need for the artist to keep proper documentation about the work they produce and track the work’s provenance. This is because documentation is helpful in the art resale market and for authenticity. Unfortunately, artists and their foundations or estates are plagued with problems such as authentication of artwork, lack of documentation by the artist while they are living, and the need to generate income from the artist artwork to fund the artist’s foundation.

Authentication of artwork is a problem when there is a lack of record keeping performed by the artist during their lifetime. This is a highly controversial topic because artist estates and authenticators have faced several lawsuits about artworks that were improperly attributed to an artist that turned out to be forgeries. Thus, authenticators and artist’s estates tend to shy away from authenticating artworks since they do not want to be held liable for wrongly authenticating an artwork. One thing that could help with this authentication problem is for living artists to be proactive in creating a method of systematically documenting their artwork. This protective step is commonly overlooked by artists, which could create problems down the line because no one else is better qualified to determine which works should be attributed to the artist then the artist themselves.

An artist should regularly document their work by taking photos, creating a numbering system, record when an artwork is sold and to whom it was sold. Also, an artist may want to keep a list of where the artwork is stored or consigned, and provide information about the artworks materials and dimensions. Thorough records created during the artist’s lifetime would facilitate the artist’s estate management of the collection and distribution of the inventory if and when the foundation in charge of the works needs to sell authenticated works. Therefore, artists should be prudent and begin this practice at the beginning of their career to ensure their legacy is protected.

Conclusion:

“Establishing the Artist Foundation” is a vital topic in the art industry as demonstrated by the challenges encountered by high-profile foundations such as the Rothko and Warhol Foundations. Many artists, galleries, and auction houses are transforming their business strategies by incorporating artist management to help meet the needs of aging artists. Crassly put, dead artists are big business for sales, exhibits, and catalogue raisonnés. As mentioned by Robin Pogrebin in her New York Times article, “Decision Time For Aging Artist,” aging artists such as Chuck Close are beginning to think about planning for their families now rather than simply leave it to a gallery to manage their estate as artists commonly have done in the past. Artists are taking an active role in establishing a plan for their work to curtail many of the problems other artist’s estates and foundations have faced. In deciding how to develop a plan for the artist’s artworks the legacy, preservation, copyright, licensing, establishing an artist foundation, establishing a trust, and the selection of a qualified fiduciary are all important elements that merit additional education and planning to ensure the will of the artist is honored posthumously. The artist should consult a qualified and experienced attorney to establish a plan and guide them through the process of estate planning for artists.  

Select Sources:

  1. In re Rothko, 84 Misc. 2d 830, 379 N.Y.S.2d 923 (Sur. Ct. 1975), modified, 56 A.D.2d 499, 392 N.Y.S.2d 870 (1st Dep’t), aff’d, 43 N.Y.2d 305,372 N.E.2d 291, 401 N.Y.S.2d 449 (1977); on remand, 95 Misc. 2d 492, 407 N.Y.S. 2d 955 (NY Sur. Ct. 1978).
  2. Simon-Whelan v. Andy Warhol Found. for the Visual Arts, Inc., No. 07 CIV. 6423 (LTS), 2009 WL 1457177 (S.D.N.Y. May 26, 2009).
  3. Jennifer Maloney, The Deep Freeze in Art Authentication, April 24, 2014 available at https://www.wsj.com/articles/SB10001424052702304279904579518093886991908

About the Author: Heather DeSerio (NYLS, JD candidate, Class 2017) is a Spring 2017 Legal Intern with the Center for Art Law. In her studies, she is concentrating in Intellectual Property Law. Prior to law school, she worked as a fine artist and received a Bachelor of Fine Arts in Painting from Ringling College of Art and Design. She can be reached at heather.deserio@law.nyls.edu.

Realities of Fan Fiction: Paramout To Boldly Drop Lawsuit

By David Honig, Esq.*

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In 1966 the world was introduced to the crew of the USS Enterprise NCC-1701! On September 8, 2016, 50 years will have passed since we joined that intrepid crew on its five year mission. Over the course of
a half century
Star Trek has amassed a following unlike any other. The original series, which only made it to the air because of Lucille Ball, lasted only three seasons before it was canceled. Gene Roddenberry’s tale of a future where humanity put its petty differences aside to unite and explore the stars did not end, however, when the last episode aired on June 3, 1969.

tumblr_o2awj8Rh0Z1rwjpnyo1_500After being canceled Star Trek spawned a franchise that consists of an animated television series, major motion pictures, comic books, novels, numerous spin-off shows and a Las Vegas attraction. But most importantly, Star Trek took firm root in the hearts of its fans. As a testament to their devotion, fans have learned Star Trek’s alien language Klingon, going as far as translating Hamlet, and a few other works, into their beloved alien tongue.

Like all good works of fiction, Star Trek developed a life of its own and inspired a parade of  unauthorized fan fiction. While a phenomenon like Star Trek lives and dies with the fans, it  exists as property owned not by the fans but by a major corporation. As such, Paramount and CBS have a vested interest in protecting the rights associated with their copyrights under 17 U.S.C. 106. Specifically, the copyright holder has exclusive rights to reproduce, create derivative works, distribute copies, and perform and display the work publicly.

Fan fiction regularly infringes a copyright because copyright often covers more than just the work itself. Instead, copyright has been extended to cover characters and settings as well as other literary elements, see Walt Disney Productions v. Air Pirates, 581 F.2d 751, 754-5 (2d Cir. 1978).

Fan fiction violates the exclusive rights of a copyright holder in two ways, expressly or through derivative works. A piece of fan fiction that incorporates a character or setting from the original work infringes – since, as just discussed, the character is subject to copyright protection and using the character violates the exclusive right to reproduce. Similarly, fan fiction violates the exclusive right to create derivative works even as  the fan-author creates her own story, because of familiar settings or characters derived from the original work. It is also worth noting that selling or distributing fan fiction does not change the fact that it infringes the original copyright. Commercializing a work, or more precisely the effect on the market for the original copyright, only comes in when determining whether the fair use exception applies not whether something infringes.

When deciding to prosecute copyright infringement the holder is faced with a Kobayashi Maru scenario – in the Star Trek universe, the Kobayashi Maru refers to a training exercise designed to place starfleet cadets in a no-win scenario. The copyright holder must decide whether it should allow the copyright to be infringed or enforce its rights and risk the ire of fans. The amount of money involved in fan fiction infringement is usually nominal compared to the risk of alienating fans. Additionally, because of the  uncertainty of fair use protection under 17 U.S.C. 107, fan fiction is often left alone even when the potential infringer is making money. This is a simple cost benefit analysis. However, there are instances where the holder does assert its copyright and recently some Star Trek fan fiction has fallen into that category.

Anyone who has ever been to a comic convention knows that there are people dressed up as starfleet officers, members of the United Federation of Planets or other Star Trek Characters. These fans are often wearing uniforms that they made themselves which include elements that are subject to copyright protection – such as the starfleet insignia. For various reasons Paramount and CBS will not go after these fans, the damages are de minimis

In addition to wearing costumes, many of these fans will also create their own movies, comics or other form of art – even the Internal Revenue Service is not above creating such a video. These videos are usually viewed as harmless since they have no impact on the market for the genuine article and if anything they endear fans to the source even more by allowing them to continue to engage in ways that traditional content does not allow. There is a limit, however, to what the Star Trek copyright holders will accept before they begin enforcing their rights. It seems that a fan project that raised over a million dollars and was set to be released the same year as Paramount’s next installment in the Star Trek motion picture franchise was too much.

Star Trek: Axanar, a fan film set before the original 1966 television series, raised over a million dollars on Indiegogo and Kickstarter. The film, which follows a successful short that raised over $100,000 on Kickstarter in 2014, raised its funds with some encouragement from Star Trek alum George Takei. With a mounting economic incentive, on December 29, 2015 Paramount and CBS filed a lawsuit against the producer of the film, Axanar Productions (“Axanar”), alleging copyright infringement.

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George Takei as Sulu on the set of Star Trek

Among other aspects of Star Trek such as history and characters, the complaint claimed a copyright over languages. What might have seemed to be one more violation to the copyright holder and its attorneys ended up developing a life of its own.

First Axanar, responded by filing a motion to dismiss claiming that Klingon, a language invented for Star Trek, could not be protected by copyright law under Baker v. Seldon, 101 U.S. 99 (1879), because it is an idea or system. In response, Paramount claimed that the Klingon language isn’t useful, wholly fictitious and “there are no Klingons with whom to communicate.” After Paramount responded to Axanar’s motion the Language Creation Society submitted an amicus brief in support of Axanar.

The brief begins with a curious footnote quoting Marc Okrand, author of The Klingon Dictionary and creator of the language, claiming  Okrand “has asserted that the Klingon language, tlhlngan Hol, was received by him from a captured Klingon named Maltz.” The brief thus concludes that Plaintiffs cannot claim otherwise in this litigation, citing to Arica Inst., Inc. v. Palmer, 970 F.2d 1067, 1075 (2d Cir. 1992), to support its position. The Language Creation Society does not pull any punches stating, “Feeling ownership and having ownership are not the same thing.”

The Language Creation Society’s brief is quite an enjoyable read. The brief quotes Star Trek: The Next Generation, recognizes there is a child who was raised as a native speaker of Klingon and intersperses Klingon phrases written in the Klingon alphabet throughout. What might appear as gimmicks actually make the Language Creation Society’s point stronger – Klingon is a real language spoken by real people so much so that it can be used coherently in a brief amicus curaie. If the point of filing this brief was to argue that Klingon has taken on a life of its own as a communication system then there truly is no more powerful tool to prove this postulate than by showing Klingon can indeed act as a communication system instead of just reporting on its wide use.

Alas, the issue will not be adjudicated, at least not in this case. On Friday May 20, 2016 J.J. Abrams, the director of the first two Star Trek reboot films, announced that the lawsuit against Axanar would be dropped. The announcement was made during a fan event to promote the third installment of the rebooted Star Trek franchise, which Abrams serves as a producer, Star Trek Beyond. Unfortunately, this voyage is not yet over.

Abrams merely announced that Paramount WOULD drop the lawsuit not that the lawsuit WAS dropped. In fact, four days after the announcement Axanar an answered amended complaint and filed a counterclaim to ensure it met court ordered filing deadlines. Additionally, CBS and Paramount are working on fan film guidelines and if Star Trek: Axanar, or some other fan film, does not follow those guideline then the Star Trek copyrights will most likely be enforced again. Clearly there is still work to be done before Axanar, its fans, and producers and fans of other Star Trek fan fiction can proclaim Qapla’.

About the Author: David Honig is a post graduate fellows at the Center for Art Law. He is a member of the Brooklyn Law School class of 2015. While attending law school he focused his studies on intellectual property and was a member of the Brooklyn Law Incubator & Policy (BLIP) Clinic. He is admitted to New York and New Jersey state bars. In the Fall of 2016 he will be pursuing an LL.M. in taxation from NYU Law.

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Readers should not construe or rely on any comment or statement in this article as legal advise. Instead, readers should seek an attorney.

Copyrights: To Register or Not to Register, That is the Question

By Elizabeth Weber, Esq.*

Copyright protection is a cornerstone of intellectual property law for those who create expressive works. However, a startling number of artists do not register their copyrights with the U.S. Copyright Office for one reason or another, ranging from a lack of knowledge on how to go about registering a copyright or the unwillingness to register because a work is, technically, protected under copyright law the moment it is created. Whatever the underlying reason, those who do not register their copyrights are at a stark disadvantage for one main reason: an unregistered copyright holder, meaning the individual who owns the unregistered copyright, is precluded from suing an individual who infringes upon the work’s copyright in court. In short, only registered copyright holders may bring actions of copyright infringement against alleged infringers.

With this in mind, Center for Art Law believes that providing some basic information on copyrights and copyright law to our readers would prove beneficial. Please note that this article does not, in any way, shape, or form, constitute legal advice. If our readers have any questions about copyright law, we strongly urge them to consult an attorney.

A Bit of Background Information on U.S. Copyright Law

Modern copyright law stems from the United States Constitution. The Constitution granted Congress the power to issue both patent and copyright protection “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” U.S. Const. art. I § 8, cl. 8.

Copyright law aims to achieve two distinct goals: first, to provide authors the exclusive right to benefit from their creative works for a limited duration and, second, to stimulate the creative atmosphere by protecting works from unfettered widespread use. Thus, Congress incentivized the creation of artistic works by imbuing authors with the exclusive right to use and benefit from such works for a set period of time.

What is Copyrightable Subject Matter?

Modern copyright law is codified in Title 17 of the United States Code. 17 U.S.C. § 102 (a) states that “[c]opyright protection subsists . . . in original works of authorship fixed in any tangible medium of expression” and includes categories like literary, pictorial, and audiovisual works. Both published and unpublished works may qualify for copyright protection. Thus, so long as an artistic work is original and fixed in a tangible medium of expression, it may garner federal copyright protection.

The Code specifically precludes ideas, procedures, processes, systems, methods of operation, concepts, principles, or discoveries from garnering copyright protection. 17 U.S.C. § 102 (b). However, the expression of these precluded subject matters may be protected in some limited circumstances.

Why Register A Copyright?

Once a copyright is infringed, the copyright holder may act to stop the infringer from exploiting the infringed copyright. The damages for infringement depend on whether the work was registered with the Copyright Office before any of the exclusive rights were violated. The amount of possible recovery ranges from $0.00, as actual damages may be nominal, to $150,000.00 per willful infringement if the copyright holder elects to seek statutory damages.  More detail about actual and statutory damages will be provided in the Remedies for Infringement: Actual Damages and Profits versus Statutory Damages section below.

A Copyright Basics Circular provided by the U. S. Copyright Office indicates that copyright registration provides the copyright holder with a number of advantages, including establishing a public record of the claimed copyright, which may dissuade potential infringers from unlawfully using the work; allowing the copyright holder to file a copyright infringement claim in court; establishing prima facie evidence of the copyright’s validity and of the facts set forth in the copyright certificate; and, “[i]f registration is made within three months after publication of the work or prior to an infringement of the work, statutory damages and attorney’s fees will be available to the copyright owner in court actions. Otherwise, only an award of actual damages and profits is available to the copyright owner.”

Accordingly, registering a copyrighted work not only allows a copyright holder to sue an alleged infringer, but it also allows the copyright holder to seek statutory damages and attorney’s fees if the copyright holder registered the copyright within a certain time frame as discussed in 17 U.S.C. § 412. This may lead to a substantially higher damages award, which will be discussed in the Remedies for Infringement: Actual Damages and Profits versus Statutory Damages section below.

How to Register a Copyright

An application to register a copyright must contain three essential elements: 1) a completed application form; 2) a nonrefundable filing fee; and 3) a non-returnable deposit, which is a copy of the work being registered and deposited (hence the name) with the U.S. Copyright Office. These forms are available on the U.S. Copyright Office website. For reference, a step-by-step copyright registration guide is available on pages 7-12 of the Circular mentioned above.

Additionally, an applicant does not need a lawyer to register his or her copyright, so the applicant may fill out the requisite paperwork, send in the filing fee, and deposit a copy of the work with the U.S. Copyright Office at his or her own volition.

Copyright Infringement

A valid copyright issued by the U.S. Copyright Office provides the copyright holder with the exclusive right to use, reproduce, prepare derivative works, and perform the work publicly. If a third party infringes upon these rights and the copyright holder registered his or her copyright, the copyright holder may file a copyright infringement suit against the alleged infringer. The copyright holder may sue for injunctive relief, for the court to impound the infringing articles, and/or for damages stemming from the infringement.

Remedies for Infringement: Injunctive Relief and Impounding Infringing Works

If granted by the court, an injunction forces the infringing party to cease the infringing activities. Also, a copyright holder may move for or the court may order sua sponte the impounding of infringing works as the court deems reasonable. Finally, the copyright holder may seek either actual damages and any additional profits from the infringement or statutory damages.

Remedies for Infringement: Actual Damages and Profits versus Statutory Damages

A copyright infringer is liable for either 1) actual damages and profits stemming from the infringement or 2) statutory damages. A registered copyright holder is entitled to recover the actual damages suffered as a result of the infringement along with any additional profits gained from the infringement.

Alternatively, a registered copyright holder may elect, at any time before a final judgment is rendered, to recover statutory damages in lieu of actual damages and profits. Basically, statutory damages are set forth in the statute itself as opposed to being calculated based upon the harm suffered by the victim. In terms of copyright infringement, amounts vary for statutory damages from no less than $750.00 to no more than $30,000.00 per infringement as the court deems just.

Additionally, if the registered copyright owner proves (and the court finds) that the opposing party willfully infringed upon the copyright, the court may increase a statutory damages award to no more than $150,000.00 per infringement. Statutory damages awards are not always big money, though; if a registered copyright holder elects statutory damages and fails to prove willful infringement, the court may reduce the statutory damages award to no less than $200.00 per infringement.

Accordingly, the election of either actual damages and profits or statutory damages should be considered a strategic litigation decision. Registered copyright holders should consult with their attorneys and carefully consider the pros and cons of electing either set of damage awards.

Conclusion

There are certainly benefits derived from registering a copyrighted work. To summarize, in addition to allowing a copyright holder to file an infringement suit against an alleged infringer, registered copyright holders may also seek statutory damages and attorney’s fees depending upon when the holder registers the copyright – potentially leading to significantly higher damages awards.

However, artists should remember that simply because their works may be copied without permission, they need not take action. There is no requirement to enforce one’s copyright and there may be quantifiable benefits in seeing one’s work appear in another’s creative expression. While it is a good idea to consult an attorney with intellectual property questions and to protect one’s exclusive rights, the ultimate decision regarding these rights is open-ended and subject to the copyright holder’s interpretation.

Sources:

*About the Author: Elizabeth Weber is a lawyer living in Brooklyn, NY.  She graduated from the University of Florida Levin College of Law where she received her certificate in Intellectual Property Law and served as an active member of the Art Law Society and the Journal of Technology Law and Policy. She is the Spring 2016 Postgraduate Fellow with the Center for Art Law.

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Readers should not construe or rely on any comment or statement in this article as legal advice. Instead, readers should seek an attorney.

Smaller World

By Kodai Kimura*

During my stay in New York City, one of my favorite pastimes was visiting public works of art and fantastic museums. One day when I was walking along 55th street humming a Beatles song I came across a public piece of artwork, the “LOVE” sculpture by the American artist, Robert Indiana. I knew the work because it was really famous and was also installed as a public piece of artwork at Shinjuku in Tokyo, Japan. After a 40-minute walk, finally I arrived at the Guggenheim Museum. I then realized that I needed some gifts for my wife and was reminded that she likes miniature replicas, so I thought it would be great if there were smaller scaled versions of the LOVE sculpture and the Guggenheim Museum’s Frank Lloyd Wright Building.

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Robert Indiana, LOVE Source: Robert Indiana Website

Given the fact that I am a lawyer, I could not avoid considering the laws that affect works of art and architecture from the perspective of intellectual property law. In the U.S., the Copyright Act (17 U.S.C.) section 120(a) states that

the copyright in an architectural work that has been constructed does not include the right to prevent the making, distributing, or public display of pictures, paintings, photographs, or other pictorial representations of the work, if the building in which the work is embodied is located in or ordinarily visible from a public place.

Under this provision, I would be able to photograph the Guggenheim Museum but would not be allowed to produce it as a three-dimensional miniature replica since it does not come under “pictorial representations of the work.” On the other hand, there is no specific exception dealing with the reproduction of an artistic work located in a public place. Therefore, it would be difficult to justify that the sales of photographs or miniatures of the LOVE sculpture, without the artist’s permission, are within Fair Use under section 107 of the Copyright Act.

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Frank Lloyd Wright, Guggenheim Museum Source: The Guggenheim Museums and Foundation Website

Let us assume that this is Japan though; of course, both “artistic work” (like the LOVE sculpture) and “architectural work” (like the Guggenheim Museum) are protected by the Japanese Copyright Law. In Japan however, there is also a difference between them, unlike the U.S.

For an artistic work, Copyright Law confers a reproduction right to the copyright holder like an artist. On the other hand, Article 46 of the Copyright Law states that “It is permissible to exploit an artistic work the original copy of which is permanently installed in an outdoor location…or an architectural work, in any way whatsoever…” Therefore, since the LOVE sculpture is permanently installed in an outside space, I can photograph it. The same provision applies to the Guggenheim Museum as an architectural work.

However, it is important to note that there are exceptions to this general rule. Article 46 of the Copyright Law additionally states that:

It is permissible to exploit an artistic work the original copy of which is permanently installed in an outdoor location… or an architectural work, in any way whatsoever except for the following:” and one of four exceptions says that “(iv) reproducing an artistic work solely for the purpose of selling copies of it, or selling such copies.

This means that like the U.S., if I want to create and sell miniature replicas of the LOVE sculpture, I must obtain permission from the artist.

In 2001 there was a Tokyo District Court case (July 25, 2001, Hei 13 (wa) No. 56, 1067 HANTA 297), where a publisher was sued for copyright infringement, by an artist who painted a painting on the surface of a bus, since the publisher used the artist’s work as a book cover illustrating various kinds of cars for children without the artist’s permission. The court found that the bus was “permanently installed in an outdoor location” since the bus runs on a public road which is open to the general public. The plaintiff argued that the bus is not “permanently” installed since the bus is located in a car park during the night. Also, the plaintiff asserted that the bus is not “installed” because the bus moves around. However, the court denied the plaintiff’s argument by reasoning that it would be usual to prohibit entry or viewing during night time for security reasons even for typical works of art. Furthermore, the court observed that “installed” is not limited to being fixed at any real property or a specific location, just as long as the location was outdoors.  

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Defendant’s book Source: Response Website

For the application of item (iv) of article 46, the court held that the use of the artwork by the publisher does not fall within “solely for the purpose of selling copies of it, or selling such copies” since readers would understand that the book cover indicates one example of cars which are introduced in the book etc. In conclusion, the court dismissed the artist’s claim. In this way, the application of this provision is not crystal clear.

What happened if the work was an architectural work? Item (ii) of article 46 of the Copyright Law states ”reproducing an architectural work by means of construction, or offering the copies of an architectural work so reproduced to the public by transferring them” as an exception. This means that you need a copyright holder’s permission if you would like to build another Guggenheim Museum. How about item (iv) of article 46? This provision does not include “architectural work.” Therefore, a miniature replica, and not an architectural reproduction of the Guggenheim Museum would not be within the scope of this provision.

Is it clear if a work falls within either “architectural work” or “artistic work”? My answer is unfortunately no. Let us take the “Tower of the Sun” by the deceased Japanese artist Taro Okamoto, which is located at the Expo Commemoration Park, in Suita, Osaka. This work is around 70 meters in length and has an open ceiling space inside (not currently open to the public due to earthquake resistant problems). Legal scholars point out that this work would fall within both “architectural work” and “artistic work.”

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Taro Okamoto, Tower of the Sun Source: Osaka Prefectural Government Website

After some legal analysis, I finally stopped looking for a smaller gift to avoid my wife’s misunderstanding that my love for her is in any way small or miniature. Anyhow, I would like to conclude this article saying that if you are intending to start a miniature replica business in Japan, all you need is a legal advisor.

About the Author: Kodai Kimura is an attorney admitted in Japan and New York, and currently works for a private law firm, Yuasa and Hara in Tokyo. During his stay in New York, he received an LL.M in IP from the Benjamin N. Cardozo School of Law, and a Certificate in Art Business from Christie’s Education. He also undertook work experience as a legal intern at Danziger, Danziger & Muro LLP.

Disclaimer: This article is intended as general information, not legal advice, and is no substitute for seeking representation.

Case Review: Christie’s v. Jombihis

By David Honig, Esq.*

TheFieldNexttotheOtherRoad

What happens when you place a multi-million dollar winning bid on a Jean-Michel Basquiat painting on behalf of a client, and your principle (a.k.a. the client) has a change of heart about purchasing the work? This is the situation in which famed New York art dealer Jose Mugrabi recently found himself. At a May 15, 2015 sale at Christie’s in New York, Mugrabi’s company Jombihis placed the winning bid of $37,125,000.00 on Basquiat’s “The Field Next to the Other Road” on behalf of a client. On November 9, 2015 Jombihis signed a promissory note to pay Christie’s the $37,125,000.00 plus interest in three instalments with $5 million to be  paid upon signing. Additionally, Mugrabi signed the promissory note as a personal guarantee.

Art dealers who operate as a middleman between sellers and buyers are taking significant personal risks when they purchase works in their own name on behalf of clients.  While the art market is notorious for controlling the narrative and keeping transactions confidential, when news break about record setting deals or transactions gone wrong in the art market, they tend to spread like the wild fire.  

According to the Baer Faxt newsletter, a paid service that scops art market news, the client who authorized Mugrabi to bid on his behalf decided to back out of the deal after sending the initial $5 million. As a result of the client backing out, Jombihis failed to send Christie’s the second installment due on January 4, 2016, in the amount of $13,562,500.00. Christie’s followed up with Mugrabi about the delinquent payment three times, the first follow-up was conducted in person at Mugrabi’s office. During the third exchange Christie’s told Mugrabi that he or anyone else acting on or behalf of Jombihis would be forbidden from participating at any of Christie’s upcoming auctions in London. The final payment of $18,562,500.00, due on February 15, 2016, also went unpaid.

As a result of the breach of contract, Christie’s filed a motion for summary judgment in lieu of complaint in New York Supreme Court, New York County on February 29, 2016. New York Civil Practice Law and Rules §3213 allows a plaintiff to file a notice of motion and motion for summary judgment in lieu of a complaint if the “action is based upon an instrument for the payment of money only or upon any judgment.”

Four days after Christie’s filed its motion for summary judgment a joint statement was released by Christie’s and Jombihis stating that an agreement had been made in “principle,” so far no details of the settlement have been disclosed except The Wall Street Journal reports that Mugrabi “will pay his bill in full.” It is not clear from this statement whether Christie’s will be paid interest and attorney’s fees or just the outstanding $32,125,000.00 owed for the painting.

Christie’s motion can be read in its entirety via Scribd. Public dispute resolution through litigation in cases involving major art market players is as rare as a complaint date-stamped “February 29.” The precipitous ‘amicable’ resolution that followed the filing also raise questions about the need to turn to the court system to enforce contractual obligations.

A walk down memory lane: While conducting research on the settlement I noticed something peculiar, all sources seemed to have the same information regarding Murgabi’s statements about the client who decided not to go through with the sale and settlement but when I looked for a press release or statement I couldn’t find one. . According to artnet news Mugrabi made these statements about the painting and settlement to Baer Faxt. No other article that I came across, including the Wall Street Journal, mentioned Baer Faxt yet they all had the same information. The reason for this appears to be that The Wall Street Journal’s source was Mugrabi’s son but this scenario leads one to wonder if The Wall Street Journal had used Bear Faxt as its source would it be in violation of the “hot news” doctrine from International News Service v. Associated Press, 248 U.S. 215 (1918). The hot news doctrine created a “quasi-property right” in news allowing an exclusive period of reporting on news collected by one agency. Meaning one news agency would not be able to read another’s paper or “bulletin” and report news it did not investigate and uncover the facts itself. Of course this is just a journey down the academic rabbit hole since in the almost century since International News Service v. Associated Press was decided, the hot news doctrine has been largely done away with first through subsequent cases such as Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), which put an end to federal common law, and more recently by the passage of the 1976 Copyright Act which preempted state law on copyright issues.

Sources:

About the Author: David Honig is a post graduate fellows at the Center for Art Law. He is a member of the Brooklyn Law School class of 2015. While attending law school he focused his studies on intellectual property and was a member of the Brooklyn Law Incubator & Policy (BLIP) Clinic. He is admitted to New York and New Jersey state bars.

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Readers should not construe or rely on any comment or statement in this article as legal advise. Instead, readers should seek an attorney.

Seeing Double: Nearly Identical Photograph Sparks Copyright Controversy

By Loren Pani*

Imagine the following scenario: You go on vacation with a group and take a gorgeous photo of some natural object. Mere seconds later, someone, standing almost exactly where you were standing, takes a photo of the same natural object. Years later you submit the photo for a contest, win the contest, then promptly find out that someone has claimed that you might be infringing their copyright. If this sounds far-fetched, it shouldn’t because it happened to a British student in 2006 who took a photo of an iceberg in the Patagonia ice fields. This begs the question:

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Center for Art Law, Oct. 21, 2015.

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Center for Art Law, Oct. 21, 2015.

 

Can you have a successful claim for copyright infringement if the photo is not copied, but is nearly identical?

 

Almost from the time that photographs were considered copyrightable subject matter they were challenged in court. In Burrow-Giles Lithographic Co. v. Sarony, the defendants argued that photographs were neither writings (as specified in Article 1, Section 8 of the United States Constitution) nor works of authorship since they involved a mechanical process. The Court upheld the copyrightability of photographs and concluded that they were both writings and works of authorship. For purposes of the Copyright Act, anyone deemed an “author” of a photograph is able to sue for infringement under Section 501. “Whether a particular photograph has been infringed will, of course, be determined by the ordinary substantial similarity test, tempered by the fact that a photographer may not obtain exclusive rights over the object depicted—ruling out any claim of infringement when another photographer reshoots the same object or scene without copying plaintiff’s originality over the mood evoked by the photograph or a scenes a faire.” The court in Leigh v. Warner Bros., Inc. noted that there is a relatively narrow scope of protection for photographers who takes images of natural objects and scenes. Often, photographers make the claim that they are responsible for the “mood” of a particular photograph, which includes lighting, shading, timing, angle, etc. For example, in the case of Sahuc v. Tucker, plaintiff claimed that defendant infringed upon plaintiff’s copyright. The photographs at issue involved the famous St. Louis Cathedral in New Orleans shrouded in mist and taken from the same angle. The court noted that although plaintiff made a valid effort to show that the two photos were identical, slight variations of the photographs lead to the conclusion that they were not substantially similar.

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Photograph by Marisol Ortiz Elfeldt, Nov. 6, 2006.

Photograph by Sarah Scurr, Nov. 6, 2006.

Photograph by Sarah Scurr, Nov. 6, 2006.

In the case of the photographs of the iceberg, it is clear that both of the photographers captured a different image and that the British student did not make a photocopy or reproduction of the other’s photograph. Furthermore, since it is a natural object, neither would be able to claim copyright on the iceberg itself. Therefore, a claim for copyright infringement would fail even though the images were nearly identical. To give protection to the photograph would open up a Pandora’s box of issues and would invite baseless lawsuits into court from people who claimed that someone else infringed their copyright. Even worse, it would force governments to make certain natural and man-made objects off-limits to photographs as some countries have done with their national treasures. Going forward, as long as a photographer doesn’t go to pains to recreate the “mood” of a particular scene, there should be no issues of copyright infringement. It is only in those rare circumstances that photographers have a viable copyright infringement claim.

Selected Sources:

About the Author: Loren Pani, a volunteer with Center for Art Law, recently graduated from Brooklyn Law School and is now working for the firm of Alter, Kendrick & Baron, LLP as a music copyright attorney (pending admission to the New York Bar).

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Any views or opinions made in the linked article are the authors alone. Readers are not meant to act or rely on the information in this article without attorney consultation.

UK Copyright Amendment Provokes Controversy in the Art and Design World

By Christopher Visentin*

Screen Shot 2015-07-16 at 9.59.46 AMThe British government has recently moved to repeal section 52 of the Copyright, Designs and Patents Act 1988 (the “CDPA”). Removing this section would increase the copyright duration for artistic designs—as opposed to traditional artistic works—from 25 years from the year the designs were first marketed, to the more common term of life of the author plus 70 years. In a report published February 18, 2015, the British government detailed provisions for implementing the change, set to take place April 6, 2020, and also published responses to comments made by those affected by the law. It seems, however, that the new arrangement has stirred up some controversy in the process.

As in the United States, the United Kingdom has long grappled with what copyright protection—if any—should be available for functional, yet arguably artistic, designs (see Brandir International, Inc. v. Cascade Pacific Lumber Co. for a famous U.S. treatment of a similar issue, involving the design of ribbon bike racks). Such artistic designs can be hard to define, but certain iconic mass-produced pieces, such as Arne Jacobsen’s “Egg Chair,” or Robin Day’s “Polypropylene Chair,” serve as examples of the types of works implicated in this change.

Egg (1958)

Arne Jacobsen, “Egg Chair” (1958).

In such cases, there is a tension between rewarding an individual the full copyright protection for his or her work, and the public’s desire to access functional designs and articles. S. 52 of the CDPA offered a solution in the U.K. by limiting copyright protection for artistic designs to 25 years.

  1. 52 effectively carved out an exception for artistic designs. Instead of the standard ‘life of the author plus 70 years’ term of copyright protection, mass-produced artistic designs would receive a shorter term of protection. More specifically, designs “derived from…artistic work[s]” that have been made by “industrial process” and subsequently marketed to the public would enjoy protection of only 25 years from the date the design was first manufactured.
  2. 52 thus separates designs derived from artistic works from both pure ‘artistic works’ and pure utilitarian designs. Under this scheme, the CDPA seems to conceptualize the work in question as an intermediate work between utilitarian design and art, deserving of likewise intermediate copyright protection.

Admittedly, some might find that the fine lines s. 52 draws over-simplify the breadth of creation in the art world. Take, for example, works like Ingo Maurer’s “Bulb,” a playful design of a lightbulb within a lightbulb, created in 1966 and part of the Museum of Modern Art’s collection. With s. 52 in place, Maurer’s design would perhaps only enjoy 25 years of copyright protection because of its functional design, and because it has been industrially manufactured and marketed. The functional elements would thus render the piece no longer protectable by copyright. Conversely, one might argue that Maurer should enjoy the full copyright term of his life plus 70 years for his creative expression. This distinction between types of artistic expression might seem unfair to some in the art world and beyond.

One argument against the repeal is that a limited copyright term would encourage artist-designers to create new designs, while also ensuring that the more practical, utilitarian benefits conferred by the designs would not be kept from the broader public for too long. After 25 years, others could lawfully create copies or other articles based on the previously protected design. Furthermore, the economic advantage that mass-produced artistic designs have over other artistic works may be great enough to justify limiting the benefits of an exclusive right of ownership to only 25 years. Presumably, the limited copyright period would balance the public interest in new, improved designs with the designers’ interest in profiting off of their mass-produced work.

Now, however, this exception for artistic design is set to disappear come April 6, 2020. With the repeal of s. 52, designers of artistic works would enjoy the same length of copyright protection as other artists, writers, and musicians. The British government moved to repeal s. 52, claiming  “to update and clarify UK legislation in line with EU law.” The change is an effort to adhere to an interpretation of the EU Design Directive (71/98/EC), promulgated by the European Court of Justice. By repealing s. 52, the British government’s protection will no longer provide a shorter term of protection than other member states for industrially manufactured artistic designs.

Extending the duration of copyright from 25 years to 70 years further distinguishes artistic designs from those designs that are not “artistic works,” and thus can only enjoy protection according to the UK Registered Designs Act 1949 (the “RDA”). Under s. 52, artistic designs that were industrially produced only enjoyed the same amount of protection as other designs governed by the RDA, which had separate registration requirements.

The extension of copyright protection provides additional incentive to artistic designers to create and mass produce new designs. Baroness Neville-Rolfe, Minister for Intellectual Property, says that the repeal is “an important step, to bring about the fair treatment of all types of artistic works and to reward those that innovate and inspire.” She further states, “[t]he innovative work of designers will have the appropriate copyright protection, whilst ensuring that UK-based businesses can adapt and thrive.”

Others affected by the change, by some reports, are less than enthusiastic. Repealing s. 52 would require manufacturing companies to pay licensing fees to rights holders long after the previous 25-year period in order to produce replicas. The change would also require permission and possible licensing fees to reproduce the images of designs in books and other publications, as well as restrict what new designers could do if they wanted to build off of an existing, protected design.

One of the most controversial aspects of the reform is that it will have retroactive effect. This means that some artistic designs whose 25-year copyright protection term has expired will once again be covered under the more expansive 70-year term, assuming it did not already expire. Those that have lawfully reproduced or otherwise used designs after the old 25-year term of copyright expired may not have to pay for their prior reproductions, but they will have to pay licensing fees for future use.

This retroactive effect may prove to be a particular burden on museums. Like many others, museums that have displayed and sold replicas of artistic designs whose 25 years of copyright have since expired may now have to pay licensing fees to continue to do so. These extra fees would introduce much higher costs to museums and could end up being entirely prohibitive.The impact of the statement for the repeal of s. 52 in the government report includes one museum’s estimate of a loss over £850,000 a year.

Beyond the licensing costs, however, museums and publishers will have to survey their collections, including an inventory of books and photographs published therein to ensure that the photographs and publications do not contain any newly protected copyright works. Even images depicting a protected work may end up infringing on the newly revived copyright. Needless to say, the cost of reassessing collections and catalogues will add to the burden.

Some argue that another side effect of the change may occur within the design industry itself. As Ivan Macquisten of the Antique Gazette notes, “some of the leading intellectual property specialists in the country have argued that [repealing s. 52] will have a chilling effect on new design, because young designers must ensure that they do not fall foul of the law when inspired by earlier designers.” Inspired designers seeking to build off of prior work will either need to secure permission from the original designer, or take care that any work that they do will not infringe on the extended copyright of the prior work.

Ultimately, there is a chance that this bolstered protection may slow down the output of new designs, as well as threaten the manufacture of current designs that are adaptations (or ‘derivative works’) of works that will regain or have extended copyright. Of course, the counter argument would be that any chilling effect the extended copyright may have might be mitigated by the increased protection due to the same designers when they create an original work.

Despite protests and appeals to lawmakers by members of the intellectual property community—including efforts by Professor Lionel Bently of Cambridge, joined by faculty members of the University of Oxford, King’s College, London, and Edinburgh University, to name a few—the House of Lords has approved the reform. Originally, the government sought a three-year transition period, but due to feedback from commenters, the three years has been increased to the current five-year period—ending April of 2020—in order to give those affected by the change more time to prepare. It seems that designers, museums, publishers, and onlookers alike will have to sit down and wait until then to determine the true outcome of the change.

Robin Day, “Polypropylene Chair.”

Robin Day’s “Polypropylene Chair” (1963).

Sources:

About the Author: Christopher Visentin is a rising third-year law student at Boston University, where he concentrates his studies on intellectual property law, art law, and law and literature. He is also pursuing a master’s degree in English literature at Boston University.

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Any views or opinions made in the linked article are the authors alone. Readers are not meant to act or rely on the information in this article without attorney consultation.

More than Just “Street Cred”: Why Intellectual Property Rights Matter to Street Artists

By Christine E. Weller*

Perhaps to the dismay of artists executing works in public spaces or on private property, street art and graffiti art has financial value and can be sold at auction without the artist’s consent. This commercialization does not sit well with some artists who engage in street art (illegally at times) as part of a political act, social commentary, or even just  for exposure.  Increasingly, graffiti and street artists who fight the involuntary commercialization of their work are achieving some success.

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Street art near Center for Art Law’s Headquarters in DUMBO. The DUMBO Improvement District commissioned this work with studio Sagmeister & Walsh, in partnership with Two Trees Management Co and the NYCDOT Urban Art Program, who collaborated with renowned Japanese illustrator Yuko Shimizu, and hand painted by Coby Kennedy.

While the terminology is unclear and used interchangeably, graffiti and street art are distinct.  The two disciplines can inform each other and are interrelated, but they differ in terms of style, method, and theme. Graffiti generally refers to stylized writing such as graffiti tags and visual work placed on buildings without permission.  Street art can take the form of murals or installations incorporated into property, more often with permission (tacit or explicit) of the property owner. Labels aside, street art lawsuits are garnering attention, and have enough merit to have caused several major commercial brands, including American Eagle Outfitters and Sony Music to settle infringement claims.

Since July 2014, there has been a rise in intellectual property (IP) lawsuits filed by street artists. However, a tension in the legal framework exists.  Many still view street art as an illegal act without artistic merit, to which no rights should attach. Notwithstanding the Visual Artists Rights Act (VARA), U.S. Copyright legislation that protects “moral” rights of artists in their work, there is legal precedent that street art may be destroyed by the property owner or painted over. Cohen v. G&M Realty LP, 988 F. Supp. 2d 212, 214, 109 U.S.P.Q.2d 1869 (E.D.N.Y. 2013)(Five Pointz). Nevertheless, the right to reproduce the street art may be protected by copyright or trademark law as evidenced by the successes in recent copyright cases brought by street artists.  The tension between the street artists’ intellectual property rights and the arrests and vandalism charges they may face is illustrated by the arrest of graffiti artist Cost (Adam Cole) and the recent false arrest lawsuit filed by Richard Pfeiffer, who police allegedly thought was Banksy. Richard Pfeiffer vs. The City of New York et al, No. 152797/2015 (N.Y. Sup Ct. Mar. 21, 2015).

However, with this new wave of successful suits and several forthcoming street art exhibitions, such as Coney Art Walls presented by Jeffrey Deitch in New York and Open Source: Engaging Audiences in Public Spaces presented by the Philadelphia Mural Arts Program, there is an increased need for both artists and brand owners to appreciate that intellectual property rights can attach to artworks installed or executed in public spaces.

A Legal Primer

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“Trust Your Vision” By gilf! Street art near our headquarters in DUMBO. Plaque next to art states: “As the world becomes more and more competitive it’s easy to lose sight of one’s goals and aspirations. This maze-inspired piece references the difficulty of navigating life, especially in a city like New York.”

Under U.S. Copyright law, legal protection attaches when an original work is “fixed in a tangible medium of expression.” 17 U.S. Code § 102. Originality is a fairly low bar. The holder of the copyright has several exclusive rights in the work for the duration of the copyright (the general rule today is the life of the author plus 70 years for most works), including: reproducing the work, preparing derivative works, distributing copies of the work and displaying the work publicly. Id. § 106.  Authors need not own the physical copy of the original, nor register their works in order for rights to attach.  However, registering the works with the U.S. Copyright Office is a prerequisite to bringing a lawsuit and allows for statutory damages. Id. § 411. In cases where actual damages are hard to prove, registration is a cheap and added benefit to the copyright owner.

Under U.S. Trademark law, protection attaches to words or symbols used to distinguish a good or service in commerce. 15 U.S. Code § 1051 et. seq. Trademark law is used to protect consumers against confusion. A trademark has the potential to last indefinitely provided that it is being used in commerce.  While the use in commerce requirement for trademarks may make it more challenging for an artist to obtain a trademark registration than a copyright registration, a trademark registration with the Patent and Trademark Office may be another source of artists’ rights in their work. Trademark protection may be especially relevant where an artist uses a graffiti or street art tag in commerce.

The Cases

Anasagasti v. American Eagle Outfitters, Inc., No. 1:14-cv-05618 (S.D.N.Y. Jul 23, 2014)

The recent wave of street art infringement cases began in 2014 with the copyright case filed by Cuban-American street artist Ahol Sniffs Glue (David Anasagasti).  In July, Anasagasti filed a copyright infringement action against American Eagle Outfitters for their use of his mural Ocean Grown (Fl) in an advertising campaign. The original mural, located in Miami’s Wynwood neighborhood, known for its abundance of street art, was commissioned by Ocean Grown Glass Gallery. Wynwood has a vibrant collection of murals, and according to the Miami Times, photographers often seek licenses from the artists before shooting the work. In his complaint, the artist alleges that no permission was sought, and the photography included models posing as if they were painting the murals. American Eagle and Anasagasti privately settled in December.

Hayuk v. Sony Music Entertainment et al, No. 1:14-cv-06659 (S.D.N.Y. Aug 19, 2014)

Well known and successful artist Maya Hayuk also brought and settled a copyright infringement case against musician Sara Bareilles and Sony Music for the unauthorized use of her mural, Chem Trails NYC, in promotional materials for Bareilles’ new album and tour. Previously, Hayuk has sued Urban Outfitters, Target, Coach, and Elle Warner, for the unauthorized use of her artwork.

Miller v. Toll Brothers, Inc., No. 1:15-cv-00322 (E.D.N.Y. Jan 21, 2015)

Luxury  real estate developers Toll Brothers settled with CAM (Craig Anthony Miller) for copyright infringement of his famous Elephant Mural (NYC). The mural was featured prominently in advertisements for luxury condos in Brooklyn that Toll Brothers were developing in the neighborhood where the artwork was originally located. CAM had painted the mural with permission of the property owner in 2009, but it was later painted over in 2013.

Franco Fasoli et al v. Voltage Pictures LLC et al., No. 2:15-cv-00889 (C.D. Cal. Feb 06, 2015)

In February, director Terry Gilliam also found himself at the center of a lawsuit over his film, The Zero Theorem (2013), when he  allegedly infringed a mural by Argentinian street artists Jaz (Franco Fasoli) and Ever (Nicolas Santiago Romero Escalada), along with Canadian artist, Other (Derek Shamus Mehaffey).  In Fasoli, the defendant filed a motion to dismiss.  The Court vacated the hearing date of May 4, 2015 and the parties await a finding on the papers.

Jason Williams et al v. Roberto Cavalli, S.p.A. et al, No. 2:14-cv-06659 (C.D. Cal. Aug 25, 2014)

Finally, in a case involving both copyright and trademark infringement claims, Revok, Reyes, and Steel (Jason Williams, Victor Chapa, and Jeffrey Rubin respectively) filed suit against fashion designer Cavalli for the use of the Plaintiffs’ mural in Cavalli clothing designs. In Williams, the Plaintiffs alleged that pieces of their work were reproduced on Cavalli clothing with their signatures obliterated, and the Cavalli trademark superimposed instead. Plaintiffs argued that this creates a false impression to the consumer as to the origin of the product. In February the court denied a motion to dismiss filed by another named defendant in the suit, Staff USA. Williams v. Cavalli, 113 U.S.P.Q.2d 1944 (C.D. Cal. 2015). This suit is currently pending in the District Court of the Central District of California (Western Division).  It will be interesting to see how the court will treat the trademark argument if the case does not settle.  Many of the artists that have brought suit engage in their own commercial transactions and have carefully policed their brands to control how their work is used and sold to ensure that they are being compensated. The disposition of Williams could establish a new legal tool for street artists.

Going Forward

Defendants in many of these cases, recognized brand owners such as Sony, Cavalli and American Eagle usually find themselves on the other side of IP infringement lawsuits. However, these graffiti and street art cases illustrate that savvy business people and corporations exploring new marketing strategies do not always appreciate that art appearing in “public” spaces is not necessarily in the “public domain.” Copying and distributing street art without permission may constitute infringement and may expose the copier or distributor to significant legal risks.

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“The Owls, Revealing Flight” by Craig Anthony Miller (CAM). Street art near our headquarters in DUMBO.

With the preceding examples in mind, street artists should consider their IP rights when installing work in public spaces, and the public and brand owners should be aware that artwork appearing in public spaces may be protected. Before using street art or graffiti art in marketing or product campaigns, brand owners should consider investigating who holds the rights to those works and seek appropriate permissions.  Going forward, street artists who install work in a public space may consider registering that work with the Copyright Office.  Where an artist uses a specific tag or name for commercial purposes, the artist could consider filing for a trademark.  While the notion of “use in commerce” in the context of street art is still untested, bringing a trademark claim in addition to a copyright infringement claim as in Williams might be an additional remedy for a recognized artist.

Select Sources:

*About the Author: Christine E. Weller is an Associate at Griesing Law, LLC where she focuses her practice on new media, intellectual property, nonprofit, and employment law  matters. She can be reached at (215) 732-3923 or cweller@griesinglaw.com.

Disclaimer: This article is for educational purposes only and is not meant to provide legal advice. Readers are not meant to act or rely on the information in this article without attorney consultation.