This is the property of the Daily Journal Corporation and fully protected by copyright. It is made available only to Daily Journal subscribers for personal or collaborative purposes and may not be distributed, reproduced, modified, stored or transferred without written permission. Please click "Reprint" to order presentation-ready copies to distribute to clients or use in commercial marketing materials or for permission to post on a website. and copyright (showing year of publication) at the bottom.

self-study / Intellectual Property

Feb. 28, 2022

Art Law Year in Review

Kim Pallen

Partner, Withersworldwide

Email: kimberly.pallen@withersworldwide.com

Wendy Dickieson

Associate, Withersworldwide

Email: wendy.dickieson@withersworldwide.com

The "Urban Light" installation at Los Angeles County Museum of Art (New York Times News Service)

The past year has been active for art law litigation, with cases concerning works by artists ranging from Andy Warhol to Dr. Seuss and Chris Burden to Camille Pissarro among those making headlines. While federal regulators have been evaluating whether government intervention is warranted to curb illicit financial transactions in the art market, courts across the country have been examining substantive issues relating to the art itself, with dozens of cases addressing the copyright laws and the fair use standard, as well as the burgeoning NFT "medium," moral rights to artworks and trademark law.

15 Minutes of Appropriation

Perhaps the most high-profile art law decision this year came in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 11 F.4th 26 (2d Cir. 2021). Goldsmith photographed the musician Prince in 1981. One of the photos was licensed to Vanity Fair and the magazine commissioned Warhol to create a silkscreen work based on the photo. The district court ruled that although the photo is protected by copyright, the foundation properly pleaded fair use and that Warhol's work is transformative, purveying a different message than Goldsmith's photo.

The 2nd U.S. Circuit Court of Appeals reversed, holding that the Warhol "works are substantially similar to the Goldsmith Photograph as a matter of law," that Warhol's use did not constitute fair use, and his work was not transformative enough as it maintained all essential elements of the source material. The decision has significant implications for Warhol's legacy as well as all other visual artists who employ appropriation techniques.

The Andy Warhol Foundation has sought review in the U.S. Supreme Court, which has yet to make a decision whether to hear the case.

Hot for Fair Use

In Marano v. Metropolitan Museum of Art, 844 F.App'x 436 (2d Cir. 2021), a photographer brought a copyright infringement claim against the Metropolitan Museum of Art alleging that the museum used his photograph of guitarist Eddie Van Halen as part of a publicly available catalog on its website without his authorization. The district court dismissed the photographer's claims, holding that the museum's use of the photo was fair use.

The 2nd Circuit affirmed the lower court's decision, holding that the museum's use highlights the unique design of the guitar Van Halen was playing in the photo and its significance in the development of rock and roll instruments, and that the museum's use could not "in any way impair any other market for commercial use of the photo, or diminish its value."

Another fair use case centered around Dr. Seuss' classic children's book "Oh, the Places You'll Go!" In Dr. Seuss Enters., L.P. v. ComicMix LLC, 983 F.3d 443 (9th Cir. 2020), plaintiff assignee of Dr. Seuss' works brought suit against defendant for unauthorized infringement. The district court held that the defendant's comic book, which "mashes up" elements from the Seuss book and the "Star Trek" franchise, was clearly fair use.

The 9th U.S. Circuit Court of Appeals reversed, holding that all four of the fair use factors weighed against defendant's fair use. The court reasoned that the comic book did not parody or critique Seuss' works and did have a strong potential of usurping Seuss' market for derivative works.

The U.S. Supreme Court declined to review the case.

Taking to Infringement

The Texas Supreme Court evaluated a copyright claim in Jim Olive Photography v. University of Houston, 624 S.W.3d 764 (Texas 2021). Photographer Jim Olive sued the public university for using one of his photos to promote its business school. Olive alleged this was a per se governmental taking under both the federal and state constitutions. The Texas Supreme Court's decision began by assuming that copyright is a form of property entitled to protection from uncompensated takings and held that, while the university may have used the copyrighted photo, the photographer still retained the copyright and was free to license or sell it. Thus, the university did not "take" his property.

In other words, the court concluded that copyright infringement is not confiscation and therefore does not constitute a taking that would entitle the plaintiff to damages. This decision essentially means that state actors, who are covered by sovereign immunity, can plunder copyrighted material without consequences.

International Illumination

In Estate of Chris Burden v. Rabbit Town, the estate of the installation artist Chris Burden sued Rabbit Town, a tourist attraction in Indonesia, for copyright infringement. Rabbit Town created "Love Light," which appeared to be a copy of Burden's "Urban Light," currently installed at the Los Angeles County Museum of Art. The Commercial Court at the Central Jakarta District Court sided with Burden's estate and ordered Rabbit Town to remove the infringing artwork and issue a public apology to the estate. The decision was a landmark in Indonesia and represents positive precedent in protecting artist rights internationally through the application of the copyright framework.

On the Fraud Front

In Hicks v. Leslie Feely Fine Art, LLC, 20-1991 (S.D.N.Y., filed March 5, 2020), abstract painter Marianne Hicks sued the New York City art gallery defendant and one of its buyers for conversion of a painting that the gallery sold as a work of the abstract expressionist painter Friedel Dzubas -- which Hicks said she painted herself when she and Dzubas were in a romantic relationship in the 1980s. After motion practice that included a motion to dismiss and a motion to compel the gallery to disclose the identity of the buyer, the parties stipulated to voluntarily dismiss the action with prejudice.

The West Coast also had an important fraud case. The Northern District of California granted defendant's motion to dismiss plaintiff's Ponzi-scheme suit in Amory v. Giarla, 20-5253 (N.D. Cal., Jan. 26, 2021). Plaintiffs were a group of artists and buyers that consigned and purchased work from defendant gallerist who had been renowned in the San Francisco art scene. Plaintiffs alleged that the gallerist misappropriated the proceeds from the sale or purchase of artwork entrusted to him for his own personal gain, abruptly closed all of his galleries after exhausting a Ponzi scheme to defraud them, and fled to Oregon with their property, which he held in trust as a fiduciary. Plaintiffs alleged breach of fiduciary duty and violations of RICO. In dismissing the complaint, the court held that all of plaintiffs' RICO claims were time-barred. A settlement conference was held and plaintiffs subsequently voluntarily dismissed the case.

Trademark Trouble

Probably the most prominent case in the trademark realm in 2021 was Nike, Inc. v. MSCHF Product Studio, Inc., 21-1679 (E.D.N.Y., filed March 29, 2021). There, the sneaker giant sued MSCHF, a group of artists and designers that collaborated with rapper Lil Nas X to release a new collection called "Satan Shoes," which were Nike Air Max 97s that had been modified to have a satanic theme, including red ink mixed with human blood featured in the midsole. Nike's complaint for trademark infringement alleged that there was "significant confusion and dilution occurring in the marketplace" based on the mistaken belief that Nike had authorized the shoes, causing "significant harm to its goodwill, including among consumers who believe that Nike is endorsing satanism." The parties settled with terms including MSCHF initiating a voluntary recall of the shoes in order to remove them from circulation.

Looted Goods

Cases addressing restitution of Nazi-looted art have also continued to flow through American courts. The most significant in 2021 was Meyer v. Bd. of Regents of the University of Oklahoma, 20-6187 (10th Cir., filed Dec. 7, 2020). Ten years ago, Meyer sued the university in an effort to recover an 1886 Camille Pissarro oil painting, "Shepherdess Bringing in Sheep," which was stolen from her father, a Jewish French businessman, in the 1940s. The parties settled that dispute in 2016, with Meyer agreeing that the painting would be displayed at the university museum and then at an institution in France.

In 2021, Meyer claimed that a 1945 French restitution law superseded the 2016 settlement. The parties have subsequently settled again, with modified terms transferring the title of the painting to the university museum in the short term and requiring plaintiff to pay the university's attorney fees, with the reasoning that the university had simply been attempting to carry out the terms of the original settlement agreement.

In Hobby Lobby Stores, Inc. v. Christie's Inc., 20-2239 (E.D.N.Y., filed Feb. 1, 2021), Hobby Lobby sued Christie's auction house for fraud and breach of express and implied warranties. The suit was over a private sale of an ancient Mesopotamian cuneiform tablet containing part of the "Epic of Gilgamesh," which Hobby Lobby's founder hoped to display in their Museum of the Bible in Washington, D.C. Christie's allegedly had assured Hobby Lobby that the tablet could be legally sold. But in 2020, the U.S. attorney in the Eastern District of New York seized the tablet, asserting it was stolen from Iraq and illegally imported into the U.S. Hobby Lobby then filed the complaint against Christie's. The parties eventually reached a settlement and the case was dismissed.

Preservation Plaintiffs

A number of cases last year contemplated preservation issues. In Schmid v. City and County of San Francisco, 60 Cal. App. 5th 470 (Cal. App. 1st Dist. 2021), two San Francisco taxpayers challenged the removal from the city's Civic Center of an 1894 bronze statue depicting a priest bending over a reclining Native American. The city believed the statue to be racist and a "monument to genocide," while the plaintiffs argued that the statute was "the oldest piece of art in this area" and an essential part of the city's historic district. Plaintiffs brought suit under the California Arts Preservation Act, contending, in essence, that any member of the public, on behalf of an artist who created a work of public art, has standing to enforce CAPA. The court disagreed and held that CAPA creates "rights that are personal to artists. Only a person who created a work of art ... or the heirs of such a person ... may enforce them."

And in Guzman v. New Mexico State Dep't of Cultural Affairs, 21-198 (D. N.M. 2021), the plaintiff had been commissioned in 1980 by a state agency to paint a mural on a state building in Santa Fe. At the time, the parties agreed that the government would retain ownership of the rights and would not alter or paint over it "during its normal life." Forty years later, the government agency hired a conservator who deemed the mural at the end of its "normal life" and moved forward with plans for renovations to the building that would damage the mural. The muralist brought claims under the Visual Artist Rights Act and sought an injunction to halt the destruction. The federal court denied the injunction, holding that plaintiff failed to show irreparable harm because the mural was already deteriorated and repairing or renovating the mural would alter it anyway, and that he would fail on the merits of the VARA claim because the ownership rights over the mural had been transferred to the agency owning the building.

Nonfungible Tokens

Finally, in the digital realm, the case of Friel v. Dapper Labs, Inc., 21-5837 (S.D.N.Y., filed July 7, 2021), garnered a great deal of attention due to the fact that it was about a new artistic "medium" -- nonfungible tokens, aka NFTs. An individual who had purchased NFTs from Dapper Labs filed a putative class action alleging that the NFTs were unregistered securities under the Howey test because they were an investment of money in a common enterprise and were purchased by investors with an expectation of profits based on the managerial efforts of Dapper Labs. See SEC v. W.J. Howey Co., 328 U.S. 293 (1946). Plaintiff further alleges that Dapper Labs prevented investors from promptly withdrawing their funds, with investors sometimes having to wait weeks or months to do so, which artificially inflated the market for the NFTs. An amended complaint was filed in December, and the defendant has indicated that they are planning to file a motion to dismiss. 

#1148

Submit your own column for publication to Diana Bosetti


Related Tests for Intellectual property

self-study/Intellectual Property

NFTs and meta lawsuits: Boldly go where none have gone before

By Alexandra Darraby

self-study/Intellectual Property

3 more music litigation developments in 2020-2021

By Neville L. Johnson, Douglas L. Johnson, Daniel B. Lifschitz

self-study/Intellectual Property

3 music litigation developments in 2020-2021

By Neville L. Johnson, Douglas L. Johnson, Daniel B. Lifschitz

self-study/Intellectual Property

Privilege waiver and good faith reliance on non-privileged information

By Yuqing Cui, Richard S.J. Hung

self-study/Intellectual Property

Can businesses use third-party trademarks on their websites?

By Joshua H. Eichenstein

self-study/Intellectual Property

Recent developments in copyright law

By Neville L. Johnson, Douglas L. Johnson

self-study/Intellectual Property

Trade secret litigation on the rise in California: How ADR can help

By Elizabeth D. Laporte