"Unauthorized Peter Beard Exhibit Will Go Forward"

Reports the Observer.  It's hard to tell what the hell is going on from the story.

"As far as I’m concerned, it has nothing to do with copyright."

"A work of art goes out there, and there’s a stream that activates and widens the communal imagination. It was an honor that I was being quoted. There was no money involved at all."

NYT:  Artist Who Inspired Kanye West’s ‘Famous’ Video: ‘I Was Really Speechless.’

"The artists have received payments between $200 to $1,700."

Back from a break and catching up on the news, I see that, after "a successful sales pilot," the Artist Pension Trust has made its first distributions to artists.  Well, no one is retiring on these distributions, though overall it remains too soon to tell.  Some background here.

Details on the Picasso bust settlement

From Robin Pogrebin here.  Background here.

"Artists cannot claim deductions on the artworks they donate, no matter the market value or hammer price commanded by their work."

"All they can write off is the cost of materials. Buyers, on the other hand, can claim a deduction when the work they purchase at a benefit sale hammers down for more than its fair market value."

ARTnews:  The Best Intentions: Inside the Wild World of Charity Auctions.

"The new approach reduces the risk that Sotheby’s ends up with too much artwork in its inventory -- a concern particularly in a slowing market." (UPDATED 2X)

Bloomberg reports that the auction houses are now paying fixed fees to third-party guarantors. The Art Market Monitor calls the story "laughable nonsense":  "The guarantee is a kind of loan and the guarantor deserves to be paid interest for making it."

UPDATE:  Felix Salmon:  "This is not manipulation, it’s transparency, and a welcome development."

UPDATE 2:  Tim Schneider:  "[The Art Market Monitor] argues—convincingly, I think—that ... critics are intentionally miscasting these arrangements as something more devious than what they are: fully disclosed insurance policies against a piece going unsold at auction ...."

Apply Yourself

An interesting Ninth Circuit VARA decision that turns into a debate about the meaning of "applied art" (because applied art is an exception to VARA; if it's applied art, it's not protected).

The case involves La Contessa, "a used school bus transformed into a mobile replica of a 16th-century Spanish galleon" for use at the Burning Man festival for several years, and then destroyed.

The majority opinion wants a relatively objective test:  "the focus of our inquiry should be on whether the object in question originally was—and continues to be—utilitarian in nature."  If the object "initially served a utilitarian function" and "continues to serve such a function" even after the artist transforms it, then it's applied art (and therefore not protected by VARA).  The majority wants judges to (and this is relevant, I think, to the fair use/appropriation debate) stay out of the business of making aesthetic judgments:  the alternative proposed by the concurring judge -- to ask whether a work is primarily directed to a practical purpose -- would "necessarily require[] courts to express judgments regarding the importance of an object’s artistic qualities," and "how different judges could answer such a question on a consistent basis is anything but clear."

The concurrence calls for a "more textured and flexible definition."  VARA's protections "cannot be limited only to works entirely devoid of any utilitarian purpose. ... Many outstanding sculptures, including the Caryatids of the Acropolis and the monumental carvings of Ramses at the temple of Karnak are in fact columns that provided buildings with structural integrity.  Medieval tapestries not only represented a form of fine art, but also kept castles and cathedrals free from draft."  "To effect the purpose of VARA and provide guidance for the art community, I believe courts should evaluate the work as a whole, asking whether its primary purpose is to serve a useful function and whether the artistic creation is subservient to that purpose. If the primary purpose is for the work to be viewed and perceived as art, then any incidental utilitarian function will not push it outside the scope of VARA."

I score this round for the concurrence.

Eileen Kinsella has a good write-up at artnet.  Courthouse News Service here.

Another Richard Prince lawsuit (UPDATED 3X)

Via Clancco.

UPDATE:  "If the offending work is that on page 8, plaintiff will have a hard time."

UPDATE 2:  Here is Eileen Kinsella's story at artnet.

UPDATE 3:  "Unless Prince decides to give up appropriating art and Gagosian quits putting said work on display, it seems likely that these lawsuits will continue."

Taxing

Daniel Grant had a piece in the Weekly Standard a week or two ago arguing, generally, that "philanthropy is not a tax proposition" and, more specifically, against proposals for restoring the income tax deduction for donations by artists (as opposed to collectors).  In general I disagree with Grant's take on this -- I think any time you make something more expensive (which is what happens to donations of art when you reduce the accompanying tax deduction), you get less of it.  But there are two, more narrow points I want to make here:

1.  The piece is critical of Ralph Lerner for telling the New York Times right after the Pension Protection Act was passed in 2006 that it would be "the death of fractional gifts."  As Grant points out, fractional gifts "didn't die and continue to be a normal way that donors" structure their giving. But -- and I realize this is a long time ago and little bit inside baseball -- the initial version of the Pension Protection Act would have been the death of fractional gifts -- as a result of what I called at the time the "mismatch problem." When that problem was later fixed through technical corrections, it brought the practice back from the dead.

2.   Grant says:  "As a practical matter, if artists want to have the same tax deductions as non-artist donors to museums, they simply can sell their work and contribute the earnings to these public institutions."  That's not the case.  Here's why.

If a collector donates a work to a museum, he reduces his taxable income by the fair market value of the work – a net positive.  Say he has a million dollars in income and the work is worth $100,000.  He now pays tax on only $900,000.

But if an artist in the same situation sells the work and contributes the earnings, he now has $1.1 million in income and a $100,000 tax deduction – so he pays tax on a million dollars.  The same as he would have had he not made the donation.  It’s a wash.  He’s given up the work but it’s done nothing for him tax-wise.

The two situations are not the same.

"There’s just not as much financial incentive to sue me. There’s a difference between suing an estate worth hundreds of millions and suing an individual." (UPDATED)

Jori Finkel interviews Richard Polsky about his new authentication service, which is now expanded to include Haring and Basquiat.

UPDATE:  "Wait, what?"

Update on the private museums question (UPDATED)

The Art Newspaper's Julia Halperin got her hands on a summary of the report the Senate Finance Committee recently submitted to the IRS on the issue of so-called private museums.

"Raises questions."  "Merits further scrutiny."  "Helpful shot across the bow."  There, you're all caught up.

As I've said before, my view is that, while some of these may not look so great right in this moment, if you take a longer term view, the benefits outweigh the costs.

UPDATE:  The Nonprofit Law Prof Blog:  "Inquiries of this type bother me somewhat.  It seems to me that current law regarding private benefit is probably sufficient to handle many of the perceived abuses ....  The drumbeat of the articles and the Senate inquiry may lead to additional regulation - and I suspect they will use a mallet rather than a surgical instrument to deal with the issue, if history is any guide."

BREAKING NEWS: Some art is held in storage (UPDATED)

The New York Times is on it.

Something must be done!

UPDATE:  The Art Market Monitor:  "Taken together, the stories betray a level of philistinism among the Times’s editorial staff that really ought to be examined by someone in charge."

Extradition Request in Knoedler Case Denied (UPDATED)

Glafira Rosales's boyfriend.  Health reasons.

UPDATE:  More here from Eileen Kinsella at artnet.

"You can’t copyright an idea." (UPDATED)

Lit pigeons edition.

UPDATE:  Once again, a dissenting view from Sergio Muñoz Sarmiento:  "This isn’t so much about copyright as it is about an Artist with a well-known art institution backing him up burying another artist for the exposure and the seemingly new 'idea.' Will the hypocrisy ever end?"

"What I found was an art world that is this closed, secretive world."

Barbara Pollack profiles Meridith Savona and the FBI's Art Crime Team.

60 Minutes did a thing on the Knoedler case this weekend

You can see it here.  Features appearances by friends of the blog (and Advanced Topics in Art Law guest speakers) Jack Flam, Greg Clarick, and Jamie Martin.

M.H. Miller has some thoughts here.  AFC points out the segment "reveals little," which is true.  I think the problem is it's impossible to explain what happened to a lay audience in a format like this. If you get it -- if you understand how implausible it was that there would just be this vast trove of undiscovered works by the giants of Abstract Expressionism -- you get it.  But if you don't see that, Anderson Cooper isn't going to convince you of it in 10 minutes.

"That magic trick illustrates the fundamental absurdity of treating contemporary art as an investment vehicle." (UPDATED 3X)

"In one simple statement, the creator took these 'assets'––ostensibly worth thousands of dollars each––and rendered them worthless to the market. So the next time you hear a silver-tongued broker explaining the wisdom of adding living artists' works to your portfolio, ask him how he'd feel about investing in Facebook if Mark Zuckerberg could suddenly 'de-authenticate' a few thousand shares any time Goldman Sachs pissed him off : )"

Tim Schneider on the Simchowitz-Mahama settlement.

UPDATE:  Brian Frye asks some good questions in the comments at Schneider's blog:  "I wonder about the metaphysics of 'de-authentication.' In other words, does it always work? And to what extent? If so, why does the market (i.e. investors) allow the artist to unilaterally determine the 'authenticity' of the work? Can you imagine a circumstance in which the market would ignore the artist's ipse dixit?"

Cady Noland is of course relevant here.

UPDATE 2:  And I should have linked to Amy Adler here:  "A recent lawsuit involving the artist Cady Noland illustrates the way in which a living artist’s disclaimer of a work, even when everyone knows it’s 'real,' can still transform it into a fake."

UPDATE 3:  A different view from Sergio Muñoz Sarmiento:  "Put simply, we don’t think this is more than another attempt by certain artist to bite the same hand that feeds them, and that feeds them well. In other words, it’s marketing ploy with little teeth, because unless your head is still stuck in the sand you’ve come to understand that it’s the collector and the art market that dictate what is a work of 'art.'"

So This Is Chrismas

"The outlook for Douglas Chrismas, the founder of one of Los Angeles’s oldest and largest galleries, seems to be growing bleaker by the day.  Sam Leslie, the forensic accountant who now runs the day-to-day operations of the gallery, has officially terminated Chrismas’s role with Ace Gallery and has filed a lengthy status report to the court, documenting millions of dollars diverted to mysterious accounts and dozens of works of art that have been moved to private storage."

"Prosecutors allege that Zukerman engaged in a complex scheme to avoid paying New York State sales and use taxes on the purchase of those paintings."

Sales tax crackdown continues.

"A settlement was reached in a skirmish over ownership of Pablo Picasso’s plaster 'Bust of a Woman,' according to a filing in New York federal court."

Breaking news.  Background here.