Law Influencing Art

Ken Johnson's review of the Brooklyn Museum's new "Graffiti" show in today's New York Times notes that among the "developments in the late 70's [that] conspired to bring graffiti into art galleries" was "the crackdown on graffiti in the subways by city officials."

Another $140 million? (UPDATED)

Bloomberg reports that, fresh off their $135 million Klimt sale, the Bloch-Bauer heirs may be selling the four other Klimts they recently recovered from the Austrian government -- for a total of $140 million or more:

"The heirs will probably consign their other Klimts to the candidates who put the highest value on the pictures, and perhaps guarantee a minimum price to the family and forgo some commissions, experts said. At an auction, the rewards for selling $140 million of art would be huge, even if the family paid no fees. Buyers at Christie's and Sotheby's pay a commission of 20 percent on the first $200,000 and 12 percent on the rest."

I previously discussed auction house minimum guarantees here.

UPDATE: I just noticed this related story from last week at The Art Newspaper ("Fierce competition to secure consignments leads to 'suicide deals'"), noting that "auction houses are independently agreeing not only to drop the vendor’s premium to nil, but to kick back part—sometimes most—of the buyer’s premium to consignors as well. Amounts of up to 80% are rumoured. The practice is sometimes known by the shorthand 'IC', which stands for 'introductory commission'."

"You shouldn't try to use copyright to try to take editorial control of someone's work"

So says one of Carol Shloss's attorneys in this piece in the Irish Examiner on her copyright misuse lawsuit against the James Joyce estate, discussed earlier here.

Chihuly in the Bronx

Bloomberg has a piece up about the blockbuster Dale Chihuly installation that opened last weekend at the New York Botanical Garden in the Bronx, but also includes a discussion of the lawsuit that I've mentioned here several times (most recently, here). The trial is apparently scheduled for next April. The article states that "Chihuly's lawyers need to prove exact visual imitation" -- but that isn't quite right; the test for copyright infringement is "substantial similarity," not "exact imitation." There is also no discussion at all of the former assistant's co-authorship claim (which was discussed here [scroll down a little] and here [point 2]). The article closes with the following: "At this point, Chihuly wishes the suit would just go away. He's upset someone copied him, but 'it's a drag, it's hard to sue someone.'" Bingo.

NASCAR Victory Lap

The Third Circuit has has affirmed the district court's grant of summary judgment for NASCAR in a lawsuit brought by the artist who designed the Nextel Cup trophy. The Philadelphia Business Journal had a good story on the background that led to the suit back in November 2004.

Bill Patry calls attention to the Third Circuit's (very brief) discussion of the Visual Artists Rights Act, ending in a holding that what the artist created here were "technical drawings, diagrams, or models," which are expressly excluded from VARA protection.

Also of interest is the Court's adoption of NASCAR's "implied license" theory -- that because the artist "created the trophy images with the intent that they would be used and displayed by NASCAR," an implied license existed as a matter of law.

You can see a picture of the trophy here.

The decision is National Association for Stock Car Racing, Inc. v. Scharle, 2006 WL 1697101 (3d Cir. June 21, 2006) (not for publication).

Is the Berry-Hill townhouse sale off?

Lee Rosenbaum discusses the question here, interviewing James Berry Hill directly (and getting a libel warning for her trouble). Earlier post on the sale here.

Dutch Painting Attacked

A 69-year-old man has been arrested after hurling a "caustic substance" at a 17th-century painting at The Rijksmuseum in Amsterdam on Sunday. The New York Times report is here. You can see the painting, "Celebration of the Peace of Münster" (1648) by Bartholomeus van der Helst, here. Apparently the attacker is "a known vandal whose picture had been circulated among guards, but he was not recognized when he entered." It's also not the first incident of vandalism at the museum: "Another van der Helst painting at the Rijksmuseum was attacked with a knife in 1989, and in 1990 the museum's best-known painting, Rembrandt's 'Nightwatch' (1642), was sprayed with hydrochloric acid."

Sam Waksal Sales Tax Evasion

The New York Law Journal has a report ($) this morning on the New York State Division of Tax Appeals' affirmance of a fraud penalty against ImClone founder (and Martha Stewart pal) Sam Waksal for failing to pay sales taxes on over $15 million worth of art. Waksal is currently serving a seven-year federal prison sentence for insider trading. As part of his insider trading guilty plea, he admitted that he bought works from a gallery in Manhattan but had the invoices sent to an address in New Jersey to evade New York taxes. New York State followed up by assessing sales and use taxes, plus fraud penalties (and interest), amounting to more than $1.8 million. The court rejected Waksal's claim that he only did what "many, many" others have done and was therefore being singled out for unduly harsh treatment: "[T]here is absolutely no basis to conclude that the Tax Law has been selectively enforced against petitioner."

More on the Joyce Estate

John Naughton had this piece in the UK Observer this weekend on the lawsuit that was recently filed against the James Joyce estate, which I wrote about here. He says that, "given that the entire publishing world has been legally intimidated by Stephen Joyce for decades, this is a landmark action. And the case will be followed with interest in every jurisdiction in which works on James Joyce are published." And ends with this prediction: "Lessig decided to take on [the] case pro bono and will be backed by the formidable resources of Stanford Law School. So the stage is set for one of the most interesting legal confrontations of our times. Stephen [Joyce] has had things his own way for many years, partly because of his implacable determination to protect his grandfather's legacy, but also because publishers have invariably backed down when confronted with the prospect of the litigation he has been willing to unleash. I have a hunch he may have finally met his match." I wouldn't back up that hunch with a lot of money; "copyright misuse," the theory under which the case has been brought, is not an easy thing to establish. But Naughton is certainly right that this is a case that will be very closely watched, here and elsewhere.

Berry-Hill Bankruptcy

The Financial Times had this update this weekend on the Berry-Hill gallery bankruptcy proceeding.

Ruscha Mural Update

In my catch-up post after having been away for a few days last week, I somehow neglected to mention this Los Angeles Times update on the painted over Ed Ruscha mural, all the more inexcusable since I'm quoted in it.

Estate Tax Compromise?

A couple of weeks ago I mentioned a New York Times story that said "negotiators appeared unable to reach [an estate tax] deal before the end of this week — if ever." Greg Mankiw reports that "ever" may be here soon. The latest proposal would (a) increase the exemption amount to $5 million per person starting in 2010, (b) reduce the rate on estates up to $25 million to the capital gains tax rate (currently 15 percent), and (c) reduce the rate on estates of $25 million or more to twice the capital gains rate. Mankiw says "this legislation could get the necessary 60 votes in the Senate and put an end to the tremendous uncertainty now surrounding the future of the estate tax."

Vase-Smasher Speaks

Nick Flynn, in his own words: "I had no idea my accident was going to turn into an international news story." (Related posts here, here, and here.)

Is art a good investment?

Daniel Gross says yes at slate.com. Tyler Cowen is (convincingly) skeptical:

"Studies of auction prices are usually biased toward the winners; the losers never go on the block again or are sold quietly at a loss through dealers. Many pieces turn out to be fakes. The placement costs in the dealer market can be higher than those at Sotheby's. Storage and insurance costs for masterpieces are considerable. Art is so much fun it can't earn the same rate of return as equity, otherwise no one would buy stocks."

At the end of his piece, Gross mentions the Artist Pension Trust, a kind of 401(k) plan for artists, whereby they pool their work and then share in the proceeds of sales from the pool. Cowen was skeptical of this too.

The $135 million painting

Carol Vogel had this report in The New York Times yesterday on Ronald Lauder's purchase, for the Neue Galerie, of a 1907 Klimt portrait for a record $135 million. The painting was for many years the subject of a restitution battle with the Austrian government. In January, it was returned, along with four other Nazi-looted Klimt paintings, to descendants of the original owner, who will now share the sales proceeds. A couple years back, Tyler Cowen had this post on what else you can buy for $100 million.

Catching Up

A few quick hits on stories that have been mentioned here before:

• Nick Flynn, the guy who tripped over his shoelaces and into three 17th Century Qing dynasty vases in January (previously mentioned here and here), has been cleared of any criminal charges. "I can say with my hand on my heart that it was not deliberate," he says.
• The Brooklyn College MFA students have brought their threatened First Amendment lawsuit against the city and the school.
• An eavesdropping lawsuit brought by "painter of light" Thomas Kinkade in Michigan state court (against the lawyers for a former Kinkade art gallery that recently obtained an $860,000 arbitration award against him) has been dismissed.

Gone Fishing

Back Tuesday.

The Power of the Estate (UPDATED)

This week's New Yorker has a fascinating article by D.T. Max about James Joyce's grandson, Stephen Joyce, who rules the Joyce estate with an iron fist. Max reports that, among other things, Stephen has "attempted to block the publication of dozens of scholarly works" and "rejects nearly every request to quote from unpublished letters." Given how soft a concept "fair use" is, "Joyceans are often unsure if they are violating the law, and when the estate objects they usually give in." One scholar who had a run in with the estate over her biography of James Joyce's mentally troubled daughter is now planning a lawsuit, with the pro bono help of Stanford law professor/IP rock star Lawrence Lessig. Lessig believes it will be the first time a literary estate has been sued on a theory of "copyright misuse." Judge Posner, guest-blogging at Lessig's blog, discussed the misuse theory here.

UPDATE: The lawsuit is on.

ANOTHER UPDATE: Lessig blogs about the suit here, including a link to the complaint.

The Missing Piece

The cover story of The New York Times Sunday real estate section today is about a man who's looking to trade a Maurice Sendak watercolor for a Manhattan apartment, but it leaves out a very important part of the equation: income taxes.

Near the end, the article does note that the seller of the apartment would have to include the value of the bartered work as part of the purchase price received. But it's equally important to mention that the buyer of the apartment also has to pay income tax on the value of the bartered work -- it would be as if he sold the Sendak for cash and then used the cash to buy the apartment. So if the Sendak is really worth $650,000, as the owner suggests in this article, he'd have $650,000 of income to pay taxes on (but no cash from the sale with which to pay it). This is exactly what got artist Peter Max into trouble a decade ago: bartering paintings for real estate and failing to declare the "sale" of the paintings on his income tax returns.

Ruscha Mural Update

This (opinion) piece in the LA Times says Kent Twitchell has already filed suit over the painting over of his Ed Ruscha mural in downtown LA, which I posted about last week here.

Really Alternative Dispute Resolution

There have been a number of news stories the last few days, including in The New York Times, about the federal judge in Florida who ordered two lawyers to play a game of "rock, paper, scissors" to settle a trivial discovery dispute they were having (about where to conduct the deposition of a witness). Last year the president of a Japanese electronics company used the same game to decide whether Christie's or Sotheby's should sell the company's $20-plus million art collection (Christie's won). Here is the website of the World Rock Papers Scissors Society ("serving the needs of decision makers since 1918"). Eugene Volokh points out that "such random (or close to random) decisionmaking isn't entirely novel to the legal system."

Graffiti Preliminary Injunction Upheld

The Second Circuit has upheld a preliminary injunction granted by a district court judge last month barring enforcement of a New York City law outlawing the possession of spray paint and fat-tipped markers to people under 21. I mentioned the lower court decision here.

Shoplifting in Chelsea

According to artnet.com:

"'Luxury Goods,' a new group show organized by art collector Beth Rudin DeWoody for athleen Cullen Fine Arts in Chelsea, seems to have drawn a special kind of viewer -- the shoplifting kind. A few days after the opening, someone surreptitiously snatched a work by John Findysz titled Tom on Tom (ca. 1998), a pair of vintage Gucci loafers covered with a collage of images from a Tom of Finland book. The work is worth $3,000, and the gallery is offering a reward for its return."

Estate Tax Survives

The push to eliminate the estate tax appears to be dead, at least for now. According to The New York Times, "though a handful of lawmakers continued to search for a compromise that could pass, negotiators appeared unable to reach a deal before the end of this week — if ever." That leaves things as the mess they are. Under current law, the tax applies to estates worth more than $2 million. The exemption amount is increased to $3.5 million in 2009, until, in 2010, the estate tax disappears entirely -- but only for a year. In 2011, it returns in its pre-2001 incarnation (including a per-person exemption of only $1 million).

Maybe it was Conceptual Art

This New York Times report yesterday on the bribery investigation involving Congressman William Jefferson included this tidbit:

"In the affidavit, an F.B.I. agent ... said cellphone records suggested that Mr. Jefferson visited a home owned by Mr. Abubakar and his wife in Potomac, Md., an affluent suburb of Washington, around midnight last July 31 with the intention of delivering money to the Nigerian leader while he was on a visit to the United States. The next day, the F.B.I. said, Mr. Jefferson told a confidential informant that he had delivered 'African art' — which the agent described as code for a cash payment — and that Mr. Abubakar 'was very pleased.'"

Nazi-looted Art

The Jerusalem Post reports on a recently established website that includes a searchable database of objects believed to have been looted during World War II, and also allows claimants to list objects they believe were taken from their families.

Warhol and Capital Punishment

The forthcoming California Law Review will have this essay by Bennett Capers. Here's the abstract:

"This essay explores the dialogic relationship between art and the law, and argues that an examination of Andy Warhol's Electric Chair paintings, and our collective response to the paintings, broadens the legal discourse on capital punishment in this country. The essay contends that the paintings, and their iconic status in our culture, call attention to our fascination with death in general, to state-administered death in particular, to the spectacle of capital punishment, and to our history of obtaining pleasure by gazing upon death. It also argues that Warhol poses an important question, one that implicates race and gender and religion and disability and age and comfort: Who are we comfortable visualizing in the chair? "

Painted Over Mural

The LA Times reported over the weekend that Kent Twitchell's iconic six-story mural in downtown Los Angeles depicting Ed Ruscha was recently painted over -- it's still not clear by whom. The story correctly notes that "works of public art are protected by law, including the federal Visual Artists Rights Act" -- but leaves out that, because the mural was apparently completed before the statute's 1991 effective date, VARA probably doesn't apply. (I say "probably" because there is an exception under which works created before the effective date, but to which the artist retained title through the effective date, are covered. It's impossible to tell from the news reports so far when, if ever, Twitchell relinquished title to the work.) The California moral rights statute has been in effect since 1979, however, and apparently was the basis for an earlier lawsuit by Twitchell over a 1974 mural that was painted over by a billboard company in 1986. An emotional follow-up piece in the Times by Christopher Knight indicates that a $175,000 settlement was reached the day before the earlier case went to trial. Knight adds: "Adjusted for inflation that's almost $250,000 today, for a smaller mural of more popular interest and less artistic significance than 'The Ed Ruscha Monument.'" Twitchell says he plans to sue again this time.

Good & Plenty

Tyler Cowen's well worth reading Good & Plenty includes the following interesting discussion of how the Internet has affected the visual arts:

"To date the visual arts have not experienced serious copyright problems with the Internet. Many individuals post unauthorized copies of paintings and other artworks, but these copies have not disrupted the markets for the originals. The difference in market value between an original artwork, even a print, and a digital copy of that artwork remains enormous. In contrast copies of literature or recorded music are worth almost as much as the original."

But, he adds, "we nonetheless can imagine a more distant future when [technology] allows for the very accurate reproduction of visual artworks." What happens when people can easily have "their own copies of the Mona Lisa or of a Monet haystack painting" that is "indistinguishable from the original to the naked eye"?

His answer is that it "would not spell doom for the art world." First, the original would probably still be worth much more than the copy: "The price difference between an original artwork and a copy, even a very good copy, is significant. Experts have been fooled many times by artistic copies, frauds, and forgeries. But once an artwork is revealed to be nonauthentic, its value plummets immediately . . . . Buyers care about the aura of the original and its symbolic value, even when they cannot tell the difference between the real and the copy."

He goes on to speculate, to my mind less persuasively, about the possibility that the difference in value between fakes and real artworks might disappear or at least narrow over time.

The book is available here. Cowen's (excellent) blog, which often touches on arts issues (for example), is here.

Authenticating the Authenticator (UPDATED)

You never know where you'll find some art law. James Wood's review of Peter Carey's new book, Theft: A Love Story, in the new issue of the London Review of Books, begins this way:

"Last year, Louis Knickerbocker, a meat distributor from Newport Beach, California, bought a Picasso drawing from the online service of Costco for $40,000. Knickerbocker thought it a steal: ‘They just sell the top quality,’ he told the New York Times, ‘whatever you buy at Costco, whether it’s a washing-machine or a vacuum cleaner. I just thought, if it’s a Picasso, you can’t go wrong.’

"But it may have been a steal too far. The drawing had been verified by an art appraiser in Florida, and it came with a certificate of authenticity signed by Picasso’s daughter Maya Widmaier-Picasso. When the Times contacted her, however, Picasso’s daughter promptly denounced the certificate as a forgery. She explained to the paper that a real certificate was marked with one or more of her fingerprints and then embossed with her seal. Here there were errors of French, and the handwriting wasn’t hers. Yet the buyer seemed cheerfully undeterred: ‘Seeing as she signed a lot of those things, who knows how many years ago,’ he told the newspaper, ‘I’m not surprised if she’s going to say that it’s fake unless she has it in front of her.’ In this delicious transference, from the authenticity of the drawing to the authenticity of the authenticator, why shouldn’t the final verdict lie with the buyer, who in a Stanley Fishy way has simply asserted his right to authenticate?"

I previously mentioned the case of the Costco Picasso here.

UPDATE: Somewhat related piece in The Financial Times here.