US Copyright Office to Review Artist Resale Royalty

Artists, unlike authors and composers, rarely benefit from resale of their works. When enacted, an artist resale royalty, aka droit de suite, provides artists an opportunities to profit from the increased value of their works over time. This right originated in France in the 1920s and has been a general practice throughout Europe. In the United States droit de suite is not a part of the Copyright law and once the artist sells his or her creation, he or she is not entitled to collect a percentage of the resale value despite the fact that for other works covered by the Copyright Act, the system does provide economic benefits after works enter the market place.

California is the only States that has its own law regarding the resale rights Resale Royalty Act (California Civil Code Section 986). However CA Resale Royalty Act has been challenged as unconstitutional in Estate of Graham v. Sotheby's Inc., 2012 U.S. Dist. LEXIS 77262 (C.D. Cal. May 17, 2012). For additional coverage of this case, please read CA District Court Finds State Resale Royalty Unconstitutional.

Now, the US Copyright Office has been asked by Congress to review how the current copyright legal system affects and supports visual artists. The Copyright Office will try to determine "whether the system is as advantageous for certain artists of visual works." They will review "how the current copyright legal system affects and supports visual artists; and how a federal resale royalty right for visual artists would affect current and future practices of groups or individuals involved in the creation, licensing, sale, exhibition, dissemination, and preservation of works of visual art."This initial notice of inquiry seeks comments from the public on the means by which visual artists exploit their works under existing law as well as the issues and obstacles that may be encountered when considering a federal resale royalty right in the United States.

On September 19, 2012, US Copyright Office issued a Notice of Inquiry seeking comments from the public as it considers pros and cons of a federal resale royalty right in the United States. Comments to the Notice of Inquiry are due by the end of the workday on November 5, 2012.

Source: U.S. Copyright Office.

Lawsuit By Competition Finalist Over Olympic Opening Ceremony Design

Outraged English artist Lee Merrill Sendall is considering ways to mount a lawsuit for copyright infringement concerning similarities between the design he submitted to the 2009 competition "Artists Taking the Lead" (ATTL) and the Opening Ceremonies of the 2012 London Olympics.

Sendall's "Large Spiral Mound" was one of 133 project proposals submitted to the ATTL competition sponsored by the Arts Council of England (ACE). The purpose of the competition was to "create the opportunity for artists to contribute a significant legacy for the Olympic Games in that region." Sendall and artist Dominic Heffer conceived a "neo Neolithic mound" in a rural setting and produced images, sketches, and descriptions demonstrating their vision.

At no point were the artists expected to relinquish their copyright interest in order to participate in ACE's competition. ATTL submission guidelines specifically state that it was "committed to ensuring that artists retain control and ownership of their original work." This also includes offering administrative assistance to artists needing to establish their ownership of a concept submitted as part of a funding application. In fact, ACE hoped that finalists whose designs were not selected would "be able to explore alternative routes to realizing their project" and could gain exposure by posting their designs to the ACE website.

Many were skeptical of the results of the 2009 competition, as the winner was not an independent artist but rather "Leeds Canvas," a consortium of Leeds-based cultural organizations. Though also disappointed, Sendall was prepared to move on--until he saw the design of the Opening Ceremonies three years after he submitted his bid to the competition. Sendall told the Arts Professional: "I began receiving messages both online and by text from people who were wondering if I had some involvement with the planning of the opening. To my surprise, a very close representation of my shortlisted concept appeared to the center piece: a spiral mound in a pastoral landscape." Sendall stated that not only was the concept copied, but also "smaller visual details in our illustrations." Sendall calls the alleged infringement of his design "insulting and troubling," stating that if the producers of the ceremony did indeed draw inspiration from his design that "some recognition of [his] bid to create one for real could have made a huge difference to its viability." He and collaborator Heffer are struggling artists in the north of England and "some recognition of [their] hard work to bring this concept to light would have been most welcome, if indeed it did inspire the opening ceremony."

Sendall will continue to pursue legal action. Follow the progress of the case at: Large Spiral Mound 2012.

Source: Arts Professional

Perelman and Gagosian Countersue Over 'Popeye'

If there is only one name of an art dealer one can name in one's sleep, it must be 'Larry Gagosian.' If there is a wish list for high profile clients, art dealers must covet having Ronald Perelman as their client. Here, the two heavyweights in their proper categories are suing to resolve their differences.

Suit 1: Defendant, Larry Gagosian is a longtime friend and art dealer of Plaintiff, Ronald O. Perelman, a billionaire art collector who filed a claim that Gagosian "took advantage of his position of trust" when selling him a Jeff Koons sculpture 'Popeye' for $4 million. Collectors, unlike museums, enjoy more flexibility in deaccessioning art once it appreciates in value or gets old, or one needs to pay for a divorce settlement. Perelman believes his ability to benefit from the Koons' marketability was hindered by Gagosian. The claim alleges that Gagosian had an agreement with Koons that if the sculpture would resell for more than $4 million, the artist would earn a large percentage of the profit. Perelman believes that it was against Gagosian's interest to repurchase or resell 'Popeye' above the initial price paid by Perelman.

Suit 2: Plaintiff, Larry Gagosian charges that collector Ronald Perelman failed to pay $12.6 million for a sculpture and $10.5 million for a painting that Gagosian delivered to defendant's home in East Hampton, NY. Instead, Perelman tried to barter pieces from his own collection and used "deceptive maneuvers designed to force the gallery into spending tremendous capital to cover shortfalls" effectively clouding the title of some of the artworks [not identified].

Paraphrasing the original Popeye: "Leave us not jump to seclusions." Perhaps the two suits with multimillion dollar tags could have been prevented if the two friends just "busked" one another "in the mush." But for now, it may not be enough to get some "sensk of humiligration" to "pool [their] intelligensk and ... axking [each other]for an apologeky."

Sources: The Huffington Post; The New York Times; Quotes.net.

The Keith Haring Foundation Announces Its Decision To Disband Authentication Committee

Last Friday, September 14, the trustees of the Keith Haring Foundation announced that it wil disband its authentication committee. The Foundation's executive director, Julia Gruen, stated that, in a unanimous decision, the trustees decided to dissolve the committee and discontinue accepting requests to review artworks attributed to the late artist. A press release on their website explained that the trustees concluded that "the public and Foundation's charitable mission would be better served if the resources presently required for the operation of the authentication committee were redirected to purposes more directly related to the charitable goals designated by the Foundation's founder, the [late] artist Keith Haring." However, the Foundation will be honoring submissions for review that were received up to September 1.

The Keith Haring Foundation is not alone in closing its authentication shop. They join the ranks of the Andy Warhol Foundation for the Visual Arts, the Roy Lichtenstein Foundation, the Noguchi Museum, as well as the Basquiat estate--who have all ceased authenticating artworks due to the increasingly litigious climate of today's tumultuous art market. This past June, the New York Times published a piece surveying the legal pitfalls surrounding authentication and the reluctancy on the part of respected scholars, organizations, and experts to offer an opinion on an artwork for fear of becoming involved in a lawsuit. Check out previous posts about disbanding authentication committees: Authentication Committees Disband: Warhol, 2011, Basquiat 2012, Who's Next? and Authentication Committees Disbanding, Are Auction Houses Next?

The Foundation will continue its mission of maintaining and protecting Haring's artistic legacy. It will maintain a collection of Haring's art, as well as archives for historical research about the artist and the social and historical contexts in which he lived and worked. Additionally, the Foundation will continue making grants to not-for-profit groups that engage in charitable and educational activities, according to the wishes of the late artist. In particular, the organization gives grants to non-profits that provide educational resources to underprivileged children and to organizations that spread information about and awareness of AIDS and HIV infection.

The Foundation also stated that it is exploring the possibility of a catalogue raisonne of the artist's work.

Source: The Gallerist

The Velvet Underground v. The Andy Warhol Foundation -- DISMISSED

The Velvet Underground & Nico (1967), featuring the famous Banana Image/Banana Design designed by Andy Warhol, is the first album of the American rock band The Velvet Underground ("VU"). Decades after the legendary band broke up, it continues to license the Banana Design for consumer goods as well as use it to promote the group during reunion concerts.

In 2011, VU sued the Andy Warhol Foundation (the "Foundation") for copyright and trademark infringement. The Foundation, holds copyright in many of Warhol's works which it also licenses for reproduction in consumer goods. In 2009, the Warhol Foundation was first to seek exclusive right over the image by precluding the VU's use of the Banana Image, alleging copyright infringement. VU rejected any such claims arguing that they held ownership rights in the image.

The suit arose as a result of the Foundation's plans to license some Warhol images, including the Banana Image, to appear on iPhone and iPad cases. At the time, VU demanded the Foundation cease its licensing activities which were likely to "create consumer confusion over the good's connection to VU." VU argued that this iconic image had secondary meaning as VU's mark. VU started legal proceedings after the Foundation rejected its demands and asserted that they "may have" a copyright interest in the Banana Design. In the original complaint, VU sought a declaratory judgement that the Warhol Foundation held no copyright in the Banana Design.

In response, the Foundation executed a covenant not to sue VU for copyright infringement. Specifically, according to the the covenant the Foundation agrees "unconditionally and irrevocably... to refrain from making any claim(s) or demand(s), or from commencing, causing, or permitting to be prosecuted any action in law or equity" against VU and related entities.

In light of the said covenant, on September 7, 2012, US District Court of the Southern District of New York opinion issued by Alison J. Nathan, dismissed the Plaintiff's complaint over copyright because it found no "immediate, realistic prospect of injury to VU from the Warhol Foundation's asserted copyright."

PS The band members may still press their trademark claims because members of the public  recognize the design as the symbol of the Velvet Underground. It is too soon to tell whether the court-weary Warhol Foundation will be providing VU with another opportunity to bring legal action any time soon.

Source: The Velvet Underground, A Partnership v. The Andy Warhol Foundation, 12-cv-00201-AJN (S.D.N.Y. Sept. 7, 2012); New York Times.

If Lap Dancing is Dancing and Dancing is Art...

On September 5, 2012, as yours truly was sworn in to practice law, the New York State's Court of Appeals heard a case as to whether lap dancing constitutes a form of art. Attorney representing Nite Moves, a strip club in Latham, NY argued that the establishment should be exempt from paying sales taxes on the door admission fees because it offered carefully choreographed performances which constituted works of art, so what if they were performed by fully nude private dancers. Given that Broadway shows and ballet performances are exempt from taxes on admission fees, why not strip clubs?! As a counterargument for the State Department of Taxation and Finance, cabaret-like establishments are obligated to pay taxes on entrance fees despite their dance performances.

It must have made for a great spectacle, particularly since experts included cultural anthropologists. The judges did start to loose their patients at some point, one having been quoted as saying "Can we get past the idea that somehow this is the Bolshoi?" referencing the famous Russian ballet company.

The attorneys who were razzle-dazzling the highest court in the state included Robert M. Goldfarb for the State Department of Taxation and Finance, and W. Andrew McCullough on behalf of the club.

Source: The New York Times.

Court of Appeals Reverses Lower Court's Decision in Legal Battle Between Fashion Powerhouses

In the case of Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., the U.S. Court of Appeals for the Second Circuit announced yesterday, Wednesday, September 5, that it was partially reversing the District Court's ruling against Louboutin and that the French shoe designer is entitled to trademark protection for its iconic red heel, except when the shoes are entirely red.

This legal battle between fashion powerhouses examined the question of whether or not Christian Louboutin's red sole is in fact entitled to trademark protection. In April 2011, Louboutin, which has painted the soles of its women's heels "China Red" since 1992, sought a preliminary injunction to prevent Yves Saint Laurent from selling a line of monochromatic women's shoes with its heel also painted red. Though Louboutin filed a trademark application with the United States Patent and Trademark Office in 2008, Federal District Court Judge Victor Marrero in New York rejected Louboutin's claim in August 2011. Marrero acknowledged that the Louboutin red sole had become a recognizable symbol of the brand, as many Hollywood actresses are photographed and filmed wearing the expensive shoes, but that the law prevents a single color from being trademarked. Marrero said that "because in the fashion industry color serves ornamental and aesthetic functions vital to robust competition, the court finds that Louboutin is unlikely to be able to prove that its red outsole brand is entitled to trademark protection."


Calling this conclusion into question, the Court of Appeals stated that the red soles had acquired "secondary meaning" under the Lanham Act as a recognizable symbol of the Louboutin brand. Judge Jose Cabranes, who wrote for a unanimous three-judge panel, explained in the court opinion that the red sole had the "requisite 'distinctiveness' to merit protection." Judge Cabranes wrote that it was "the contrast between the sole and the upper that causes the sole to 'pop' and to distinguish its creator."As such, Louboutin does, in fact, have the right to trademark its red soles, as long as the sole contrasts with the rest of the shoe. It partially reversed the lower court's order and sent the case back to the district court for further proceedings. However, the appeals court is still allowing Yves Saint Laurent to sell its line of monochromatic shoes.

Both sides have declared victory. On the one hand, Harley I. Lewin, lawyer for Christian Louboutin, said that the company "considers this a significant win for Louboutin" and that he believes Louboutin may be able to return to court one day to win protection even in cases where the shoes are also red. On the other hand, David H. Bernstein, lawyer for Yves Saint Laurent, said that for them it's "a complete victory," as the luxury brand has been permitted to sell its line of red shoes.

Sources: New York Times, ABA Journal

"Caveat Emptor": The New York Times Examines Buying Art Online

The innovations of modern technology have created many opportunities to broaden the art market, allowing more artists, galleries, and dealers to reach a wider range of buyers. However, it has also created new mechanisms by which sham artists can take advantage of unsuspecting consumers worldwide. In her piece "Growth in Online Art Market Brings More Fraud," Patricia Cohen surveys the online art market, describing the pitfalls of shopping for artworks over the internet. Cohen cites shocking figures and examples of fraud, such as 2,005 fake Giacometti sculptures for sale on one website and an "original" Picasso for a steal at $450. Her article seems to caution that while the internet can and has created legitimate opportunities to expand the art market, it also seems to bring new meaning to the age-old Latin saying caveat emptor or "buyer beware."

Read the full article at The New York Times.