Creator or Buyer: Who Really Owns The Art?

Given the importance of design in technology, the issue of who actually owns what is becoming a major source of agita. 

$7 billion lawsuits over 'look and feel' give rise to questions about what is art and content. And, for that matter, what is 'ownership' in a digital world.

The rise of intangibles as a defining medium of value as well as of exchange means that ideas and concepts can have more value than physical objects.

As is usual, the law is having a hard time keeping up with the economy. Not because it's not smart or willing, even eager, but because it's really hard to draw meaningful conclusions when events are moving at warp speed. We kinda know where we've been - though even that is up for challenge - and we have only a vague sense of where this is going.

Just like money is now more likely to be a series of electronic pulses rather than a coin or bill, so the design or the rendering or the graphic or whatever the visual or narrative representation may be is likely to be digitized. And marketed as such.

The result is that the notion of ownership and thus of potential economic benefit will have to be negotiated. It's going to take time - and money. But it's a safe bet that like most other things in a complex system, the outcome will be a compromise. JL

Steve Schlackman reports in Art Law Journal:

Whether the purchase is an original oil painting or a corporate logo, ownership rights are not the same as owning a toboggan, even if it is handmade from ancient oak found in the forests of Valhalla.

When we purchase an item, whether it’s a blender, a car, or a really cool toboggan for snowmageddon races, the purchaser owns what the bought and can modify it to their heart’s content.  Buying an artistic work, on the other hand and the ownership is joint, with some right going to the buyer while others are retained by the work’s creator. Whether the purchase is an original oil painting or a corporate logo, ownership rights are not the same as owning a toboggan, even if it is handmade from ancient oak found in the forests of Valhalla.

As you can imagine, many lawsuits are fought over ownership right for artistic works and other intellectual property, many of which would not have happened had the parties known the basic rules surrounding IP ownership.   Although every case is unique and requires a thorough analysis (that why we have lawyers after all), looking at a few hypothetical scenarios, should help us map but some of the boundaries of ownership rights when purchasing visual art. Imagine the following situation:

• A wealthy executive purchases an oil painting from a living artist to be the centerpiece of his private library. After hanging the work, he feels he may have made a mistake in purchasing the painting, but thinks that if he cuts it into three smaller pieces, it might look better in the room.
• After some negative reaction to his idea, the executive instead decides it would be better just to sell it and consigns it to a reputable gallery for the sale.
• Before the gallery takes possession of the oil painting, a major fashion magazine rents the executive’s home for a photo shoot. The photographer uses the private library as the main setting and the oil painting is shown in the background of several photos, which the magazine publishes in its next issue.
• Impressed with the photographer’s work, the executive commissions her to shoot his home. A couple of years later, the executive puts the home on the market and gives the photos to his real estate agent to use in the listing. The agent’s brokerage posts the photos on its site and also u0loads them to a Multiple Listing Service.
• The brokerage is in the midst of a branding redesign including a new website. The company hires several freelancers to create the new designs, including some amazing drawings of streets in the area, which the company uses, along with photos of the executive’s home on its homepage.
• The Brokerage also makes large posters of the drawings that it sells on its website.

Want to Know More?

The purchaser in each of these scenarios may be infringing on the rights of the artist or creator.   Let’s look at each scenario and see what the purchaser may have done wrong and whether there are any defenses to get them out of trouble.

VARA and the Alteration or Destruction of Visual Art

In our first scenario, our wealthy executive buys an oil painting, which he wants to cut into three sections to hang separately. Can he do this? Until 1990, there would be little question. Anyone who purchased an original work of art could change it, including removing sections or adding other art to it. The purchaser could even destroy the work, as long as his or her actions didn’t infringe on the artist’s copyright.

Under Copyright Law, a copyright holder has the exclusive right to:

However, nothing the Copyright Act prohibited the purchaser from altering or destroying the physical work. Many countries around the world, however, prevented alteration and destruction of artistic works, giving artists the “moral right” to protect their creations. Moral rights gave the creator control the eventual fate of his or her artistic work, along with protecting the artist’s reputation. Moral rights included the creator’s right to receive credit for a work, prevent a work from being altered without permission, control over who owns the work and the manner in which it is displayed, and to receive resale royalties.

After the United States had signed onto Berne Convention, the international agreement governing copyright, Congress enacted Visual Artists Rights Act of 1990 (VARA). However, VARA is a bit more limited than most other countries. It grants two rights to authors of visual works: the right to prevent intentional distortion, mutilation or other modification of the work which would be prejudicial to his or her honor or reputation; and the right to prevent the destruction of a work of “recognized stature.” Note the difference in these two conditions. In the first condition, the mutilation or intentional distortion must be prejudicial to his or her honor or reputation. Otherwise, the alterations are allowed. Destruction, however, is different. Harm to the creator’s reputation is not required, however, the work must be of a “recognized stature.” These requirements can be very subjective and hard to prove, which is one of the reasons very few VARA cases have made it through the courts.

VARA has other limitations as well. It applies only to a “work of visual art,” which the statute designates as paintings, drawings, prints, sculptures, and photographs, of a recognized stature, existing in a single copy or a limited edition of 200 signed and numbered copies or fewer. Photographs must have been taken for exhibition purposes only. Posters, maps, globes, motion pictures, electronic publications, and applied art are explicitly excluded from VARA protection. Finally, for works created on or after 1990, protection expires with the death of the author but for works created before VARA was enacted receive VARA protection until the copyright ends, which is life of the author plus 70 years. Also, VARA rights cannot be transferred but can be waived if the author expressly agrees to waiver in a signed written instrument with the required specificity.

The Street Artists in 5Pointz Brooklyn lost their battle to preserve their artwork.

So given these rules, can the Executive in our scenario cut up the oil painting into three pieces if the artist didn’t want him to do so? Well, the painting is a work of visual art created recently, and the creator is still alive, so the situation does fall within VARA. But does it fulfill one of the two prongs? In order for the artist to prevent the executive’s action, he would have to show that the mutilation harmed his reputation. That is not easy to do, in this case. It is not as if the executive wrote derogatory remarks about the artist all over the painting. Alternatively, the artist could claim that the alteration is in fact destruction of the work. He would then need to show that the work was of a significant stature. Being a famous artist, that would be easy. The stature question becomes murkier if the artist were only mildly well-known in certain circles or geographic locations. So the artist, in this case, may have a good shot at protecting the work.

Inherent Rights in Buying Visual Art

The executive has decided not to alter the painting but instead re-sell it at a gallery. Does the Executive have any limitations as to how, where, or with whom he sells the work? Does the gallery have any limitations?

Unlike many other countries, VARA only provided for limited moral rights. An artist cannot decide where or to whom a painting is resold. However, artists do have the right of attribution under VARA, which allows them to claim or deny that he or she is the creator. If the creator doesn’t like where the work is being shown, the artists can keep the seller from using his or her name in relation to the work. That is actually a very strong right to a potentially lucrative sale would become much less so if the work were considered “anonymous.” In my last article on Sotheby’s and the Caravaggio, that distinction may have cost the owner about $10 million.

What rights do each of the parties have in reselling a work? The artist holds the copyright, and thus, the exclusive rights that go with it, as mentioned earlier. The copyright holder can transfer those rights to another person or entity, in whole or in part, for whatever duration the creator desires. The conveyance of those rights are generally done through contracts or licensing agreements, which delineate which rights are being transferred, who receives them, the scope of the rights being conveyed, and the duration of the conveyance. A good contract should include sufficient detail regarding the boundaries of the rights being conveyed to limit any misunderstanding that might lead to a lawsuit.

What is often harder to determine are the boundaries of inherent rights, which are those rights needed in order to fulfill the terms of the agreement.

AholSniffsGlue recently settled a copyright infringement case with American Eagle for using his work without permission in the background of a series of photos fused or the company’s ad campaign.

To illustrate this point, let’s look at the scenarios mentioned earlier. When the executive bought the oil painting, he had the right to publicly display the work; he wasn’t expected to hide it in where nobody could see it. The display right is limited to the original work, not copies. The Executive cannot make posters or T-shirts with the work emblazoned on them. So his rights are very limited.  However, once the Executive decided to sell the work, he gains other rights that are not expressly given to him by the artist, but are required in order to make the sale. He can make copies of the work and distribute the copies for the purposes of helping to market the sale to the public, such as creating flyers or postcards advertising the sale. Copies of the painting can also be put on a website. The Executive can also convey both his expressed and inherent rights to the gallery so they can sell the work for him.

How extensive are the inherent rights?  The answer to that question is case specific but knowing the rights available can help determine where the boundaries may be.  For example, can the owner take a high-resolution image and place it on the web, where it can easily be copied? The artist can make a case that a high-resolution image is not necessary to help make the sale, but the seller may counter that being able to zoom in on the work to see details of brush strokes can help a buyer assess quality before deciding to see the work in person.  If the image is stolen and used in a way that harms the artist, the Executive would need to show why the high resolution image was necessary despite the risk, in order to sell the work.  That may be difficult.  Can the gallery use the sale as a promotional tool long after the sale took place? Can they make copies of the work in their promotional materials? The Gallery is the seller, but may only have limited right to show the image after the sale without permission. If the normal industry practice is being able to show the painting on their website, then that would probably be acceptable, but probably not in high resolution.  However, if the Gallery wanted to do more than that, for example, use it on a brochure or as the main image on their website, the gallery would need permission from the artist, unless those rights were given to the Executive as part of his purchase agreement, when buying the work originally.  Copyright can always be transferred and depending upon the stature of the work, it may be in the best interest of the purchaser to ensure certain rights are transferred before the purchase, especially if the work has a high value.  Given such variability, it’s easy to see that determining the scope of rights being purchased can be  challenging.

Artwork and Photography

Let’s look at the next scenario: before the painting departs for the gallery, the Executive’s house is used for a Magazine’s fashion shoot. The photographer takes photos of a model in the library, capturing the oil painting in the background.

When the Executive bought the painting, he was certainly given the right to display it. As well, he has the right to make copies for personal use. For example, the Executive takes a photo of his library with the painting on the wall.  He is not required to remove the painting first.  However, the executive doesn’t have the right to copy the work or distribute it commercially unless the copying relates to selling the work. Nor then does the Executive have the right to transfer rights he doesn’t have to the Magazine.  Once the Magazine prints the photos in its next issue and distributes it to the public, it will be infringing on the artist. Paying the Executive for using his home, did not include those rights.  Unfortunately for the Magazine, copyright law is strict liability, so intent does not matter.  Even though the Magazine thought it had permission, it will still be liable.  However, depending upon how the painting is presented in the photos, the magazine may be able to claim “fair use,” which is an exception to the exclusive rights of the copyright holder.  (Fair use is a complex topic, which can be read in more detail in the article, Parody, Fair Use and “Kiss My Ass.”)  If the artists did sue, then absent a fair use defense, the Magazine would likely end up paying for the mistake.  However, most likely the Magazine would then sue the Executive, under several causes of action.