by Amineddoleh & Associates LLC | May 24, 2021 |
Banksy’s Laugh Now graffiti predicted a role inversion. On Thursday, May 18th, the Cancellation Division of the European Union Intellectual Property Office (EUIPO) invalidated a trademark on the street artist’s image of a monkey wearing the sign “Laugh now, but one day we’ll be in charge.” This was the EUIPO’s second invalidation of a Banksy trademark in less than a year.
Banksy, Rage, Flower Thrower (2003). Image Courtesy of Lazinc
Back in 2014, Pest Control Office Ltd. a company that acts on Banksy’s behalf to maintain his anonymity, registered a trademark of the artist’s Rage, Flower Thrower graffiti. Because Full Colour Black, a British art licensing company specialized in the printing of street art, was determined to sell greeting cards illustrating Flower Thrower, the company challenged the registration claiming bad faith under Article 59(1)(b) of the EU Trade Mark Regulation. Full Black Colour argued that Banksy never intended to use the mark. Rather, it claimed that Banksy had registered it to maintain full control over the use of his images and to continue to grant regular copyright licenses. Full Black Colour demonstrated Banksy’s aversion to copyright law by referring to the artist’s public claim that “Copyright is For Losers©TM”.
On September 14, 2020, the Cancellation Division aligned with Full Black Colour and invalidated the artist’s trademark: “It must be pointed out that…[Banksy] cannot be identified as the unquestionable owner of such works as his identity is hidden; it further cannot be established without question that the artist holds any copyrights to a graffiti. The contested EUTM was filed in order for Banksy to have legal rights over the sign as he could not rely on copyright rights, but that is not a function of a trademark.”
Banksy, Laugh Now (2005). Courtesy Artsy
In the meantime, Full Black Colour had filed a second complaint before the EUIP to invalidate Banksy’s trademark of Laugh Now on the same legal grounds. On May 18, 2021, the artist argued that the claimant had not provided sufficient evidence to prove bad faith. Banksy referred to the Court of Justice of the European Union’s C-371/18 judgement (2020), in which the Court had held that invalidation for bad faith is appropriate when the trademark was filed “with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties or with the intention of obtaining…an exclusive right for purposes other than those falling within the functions of a trade mark.” (§74). Banksy also raised the interesting argument that, under Article 11.1 of the EU Charter of Fundamental Rights, which protects freedom of expression, he could not lose the right to file a trademark on the basis that he had previously claimed that copyright is for losers. Moreover, Banksy explained his comment “was clearly ironic as it was accompanied by both a copyright and trade mark symbol.” Finally, the artist recalled that in Creative Foundation v. Dreamland Leisure Ltd. (2015), which concerned Banksy’s entitlement to copyright protection as a street artist, the English High Court’s Chancery Division held that trademarks and copyrights are not exclusive. Banksy argued that his refusal to copyright Laugh Now did not disqualify his trademark registration.
Once again, however, the EUIPO aligned with Full Black Colour. The Cancellation Division found that Banksy did not use any of his registered marks as trademarks. Instead, it held that his trademarks were an attempt to monopolize images on an indefinite basis, and that his EU trademark was filed to circumvent copyright law, amounting to bad faith. Who’s laughing now?
by Amineddoleh & Associates LLC | May 17, 2021 |
Wave Amnesia by Kate McQuillen
On view at Massey Klein Gallery until Saturday, June 19th.
On Friday, May 7th, visual artist Kate McQuillen’s first New York City solo show opened at Massey Klein Gallery. The exhibition, titled Wave Amnesia, was officially launched with a reception on Sunday, May 9th.
McQuillen’s work is sometimes described as “hyper-flat” for its indiscernible texture and brushstrokes. She creates transparent color gradients by applying thin layers of acrylic paint through silkscreen, producing an imagery that sometimes recall the light displays of auroras borealis. The paintings’ impenetrable matte surfaces allow viewers to experience them without external distractions.
The works in Wave Amnesia depict the human mind’s imperfection. McQuillen was inspired by confusing mental experiences such as the combination of emptiness and abstract imagery that occurs in the brain when a word is forgotten or is about to be recalled. These moments can cause the mind to be caught in limbo between knowledge and oblivion. McQuillen’s work seeks abstract imagery that communicates this same experience of that which is familiar but still unknown. The show is counterbalanced by two distinct styles. The first is marked by repetitive and linear layers of paint that hide the artist’s hand almost entirely. The second contrasts with the first by exposing the unevenness of the creative process. Wave Amnesia was influenced by artists such as Jacqueline Humphries, Charline von Heyl, and Joan Mitchell.
McQuillen’s work has been exhibited nationally and abroad. She has been featured in international art fairs in Toronto (Canada) and Chicago. The artist lives and works in Brooklyn, NY.
Massey Klein Gallery is located at 124 Forsyth St. New York, NY 10002.
For press inquiries or questions about works available, please contact ryan@masseyklein.com.
Borderlands, acrylic on panel, 51″ x 48,” 2021
by Amineddoleh & Associates LLC | May 10, 2021 |
Fondation pour le droit de l’art
Last week, our founder Leila Amineddoleh spoke at an event hosted by the Art Law Foundation titled Non-Fungible Tokens in the art market: the beginning of a digital art boom? The event was organized and moderated by attorney Anne-Laure Bandle, Director of the Art Law Foundation and co-founder of the Responsible Art Market initiative. Other panelists included Gabriel Jaccard, a legal scholar in the field of smart contracts and Co-Chair of the Regulatory Working Group Crypto Valley, and Garrett Landolt, a Postwar and Contemporary Art Specialist at Christie’s auction house. This multidisciplinary group of speakers presented varying perspectives on NFTs and the art market, demystifying this new asset class for the audience.
After Gabriel explained the technological aspects of NFTs, Leila stressed the importance of understanding and drafting contractual terms relating to them. As digital assets, NFTs fall outside traditional frameworks of property law and art sales agreements. In conventional transactions, a buyer will purchase a work from an artist or on the secondary market and receive a tangible object. With NFTs, it is not always immediately clear what the collector is buying or what rights they will be allowed to retain and exercise. A digital token can exist separately from a physical work of art or contain rights to a unique digital artwork that does not have a physical counterpart. Each situation will carry different rights for the creator, the seller, and the purchaser. For instance, a variety of options are available for the protection of artists’ moral and intellectual property rights, although this is complicated by the fact that such rights vary between countries. (A prior blog post examines moral rights and NFTs.) As this is a rapidly developing field, contracts will need to adapt to the rapidly changing technology and art market.
Gabriel noted that NFT sales are governed by smart contracts embedded within the purchased tokens that are programmed to operate automatically. (These contracts work similarly to a vending machine, which is programmed to release an item when a buyer inserts payment). However, as NFTs are a recent addition to the legal world and are usually more expensive than chips and soda, parties are still struggling with how to draft contractual terms that program the tokens effectively. Without clear legal precedent to inform these agreements, questions have arisen as to how the trade in these assets will develop. Depending upon the limitations the seller wishes to place on the NFT (such as commercial use and publicity restrictions), the parties may approach sales as straightforward exchanges of goods, as more complex licensing agreements, or even as hybrid contracts that incorporate these two forms. In any case, the parties’ rights should be clearly specified and memorialized in an agreement in order to avoid future legal challenges. Another critical matter to consider is the potential conflict between private contract provisions and the terms of services on an NFT platform. Although it is unclear which terms will prevail in the event of a dispute, including protections in the agreement will help safeguard the parties and help enforce their rights.
Source: Christie’s
As a complement to the legal discussion, Garrett provided an exclusive account of the now famed March 2021 Beeple sale, which drew 22 million visitors to Christie’s website during the final minutes of the auction. This unprecedented traction perhaps suggests that NFTs are a more desirable (or at least more accessible) asset class for Millenials than the traditional art market sphere: bidders for Beeple’s “Everydays” averaged 36 years old. Garrett also indicated that while Christie’s had an excellent start, this sale was a learning experience for future transactions. The auction house plans to pursue NFT sales and will offer blockchain-embedded works called Cryptopunks in an upcoming auction. It remains to be seen whether NFTs will be treated as a luxury asset, but Christie’s will remain selective with the items chosen for auction.
As part of the event, Anne-Laure then moderated audience questions. The first question concerned recommendations for potential purchasers. All the panelists agreed that purchasers should perform due diligence in advance of transactions to ensure that they fully understand what is being purchased, their respective rights, liabilities, and potential legal implications. Proceeding with caution is necessary to avoid pitfalls. Gabriel further noted that purchasers should verify whether the relevant contract addresses their needs, depending on the purpose of the transaction (investing versus collecting). Another question concerned the reception of NFTs by financial institutions as collateral for loans. Gabriel stated that NFTs currently represent a high-risk ratio and as such, financial institutions are hesitant to use them as collateral. However, this could change in the future if NFT-related transactions become more common, and smart contracts could potentially be used as collateral. It is worth noting that financial institutions must also comply with anti-money laundering (AML) regulations, which were recently extended to antiquities dealers in the US and already apply to art market participants in the EU and UK. If financial institutions apply the new regulations to NFT transactions, these institutions will need to conduct diligence regarding the identity of the work’s ultimate beneficial owner. This requirement might mitigate the anonymity provided by the Internet and ultimately discourage certain NFT buyers.
The legal landscape surrounding NFTs continues to develop. Collectors, artists, and other art market participants are wise to obtain legal counsel from experienced professionals with an understanding of this new asset class. At Amineddoleh & Associates, we have a strong track record representing artists, collectors, and galleries at all stages of art transactions. We have served as legal advisors on a number of high-profile NFT transactions, and we are currently working with Nifty Gateway and Monax, as well as with artists and their estates. We relish the opportunity to continue work in this developing area. We are proud to be at the forefront of legal work for this exciting new asset in the digital, artistic, and legal fields.
by Amineddoleh & Associates LLC | Apr 19, 2021 |
Join our founder and other experts for an important event addressing the effects of international sanctions on the preservation and protection of cultural heritage. Iran’s astounding cultural heritage has developed over many millennia. But during the past decade, Iranian heritage has had to contend with the sanctions era, a period in which political and practical challenges have made heritage management, research, and cultural tourism more difficult. In this unique webinar hosted by the Heritage Management Organization and the Bourse & Bazaar Foundation, these challenges will be discussed by experts with first-hand knowledge of how Iran’s cultural sector has had to adapt in order to remain connected to global exchanges on arts, culture, and shared patrimony.
The discussion will be moderated by Kyle Olson of the University of Pennsylvania, whose five-part article series published by the Bourse & Bazaar Foundation, explored the impact of sanctions on the cultural heritage sector in Iran. Our founder has written about the effects of politics on heritage (with an emphasis on Iran) in a law review article published in 2020, available here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3572987
Our law firm addressed the topic in a blog post here (https://www.artandiplawfirm.com/why-cultural-heritage-should-not-be-destroyed-to-punish-a-nation/). Our founder even drafted the official statement of the Lawyers’ Committee for Cultural Heritage Preservation (LCCHP) calling for the protection of heritage in Iran.
Register for the April 27 event here: https://mailchi.mp/bourseandbazaar.com/iran-heritage-management-under-sanctions
by Amineddoleh & Associates LLC | Apr 9, 2021 |
Nyan Cat
NFTs, or non-fungible tokens, have taken the art world by storm during the last month. With these works raking in millions of dollars in sales, collectors are eyeing digital art and collectibles as viable investments. So what exactly are NFTs? They are crypto assets created by minting a digital file on a blockchain, which serves as an indelible record of ownership, authorship, and other attributes of an associated artwork. Once minted, NFTs can be bought and sold across a variety of platforms, with each subsequent transaction recorded on the blockchain, creating a provenance in real-time with each transaction. These digital files, or tokens, can be associated with both physical and digital art and offer many exciting benefits. For example, the near limitless flexibility in coding these tokens has allowed artists to ensure they receive a fraction of all future sales of an artwork, a remedy artists have been seeking for years and which is known as the Artist’s Resale Right (ARR). For these reasons, NFTs may be found for sale at more than just tech start-ups, and they are making their way into preeminent art institutions. Christie’s recently auctioned its first purely digital work (Beeple’s EVERYDAY-THE FIRST 5000 DAYS) with an accompanying NFT, shattering the record for a price paid for a digital work, with a stunning final hammer price of over $69 million.
Purchasers around the world are now competing to buy an unprecedented amount of digital artwork, memes, and GIFs minted as NFTs. This includes the famous Nyan Cat meme, which sold for nearly $600,000 in February 2021. In total, these sales have amounted to approximately $200,000,000 in the month of March 2021 alone, compared to $250,000 during the entire year of 2020. There is no limit to what can become an NFT; for example, a digital artwork based on Salvator Mundi (the painting controversially attributed to Leonardo da Vinci that shattered auction records when it sold for $450 million in 2017), called Salvator Metaversi, was recently turned into an NFT and placed on the market. It looks as though NFTs are here to stay, and some art market participants are hopeful that they will usher in a brave new era of digital and crypto-based art, helping the market recover from the pandemic-related recession.
Amineddoleh & Associates has been at the forefront of this burgeoning market, working on several cutting-edge matters involving NFTs. We have provided legal counsel to market leader NIFTY Gateway and MONAX, a digital contract management solution, which is launching a feature to wrap legal agreements around NFTs. Although NFTs present exciting new possibilities for artists and collectors, it is unclear how they will interact with existing legal regulations drafted with more traditional objects in mind. This is especially true of intellectual property (IP) law, including copyright and moral rights.
VARA Rights
Intellectual property rights are divided into economic rights and moral rights. Economic rights seek to protect a content creator’s ability to generate revenue based on their creations. For example, a publisher may be prohibited from selling copies of an author’s book without a license, thus depriving the author of revenue he or she is entitled to under copyright law. Moral rights seek to protect the intrinsic aspects of an artist’s creation and are more closely associated with honor and integrity rather than profit. For example, the French Supreme Court ruled in favor of director John Huston’s heirs, who argued that airing a colorized version of the classic silver screen film “The Asphalt Jungle” violated Huston’s moral rights. See Consorts John Huston vs Turner Entertainment Co., Cass., Ch. Civ. 1, May 28, 1991, n°89-19.522, n°89-19.725. In the United States, economic rights are protected by the Constitution and the Copyright Act, while moral rights are protected by the Visual Artists Rights Act (VARA), an act that was only passed in 1990. VARA solely applies to works of visual art and includes the following moral rights for artists: (1) the right to claim authorship of a work they created; (2) the right to disclaim authorship for a work they did not create; (3) the right to prevent the use of their name on any work that has been distorted, mutilated, or modified in a way that is prejudicial to the artist’s honor or reputation; and (4) the right to prevent the distortion, mutilation, or modification of a work that would prejudice the artist’s honor or reputation.
One can imagine how NFTs may help enforce an artist’s economic rights: providing a record of ownership and the opportunity to attach specially contracted rights and obligations into the token (such as royalty rates) could make enforcement more efficient. However, it is less clear how NFTs will facilitate the enforcement of moral rights. In particular, the ability for NFTs to serve as incontrovertible proof of authorship, a chief benefit of NFTs, appears to be incompatible with rights allowing for conditional disavowal of an artist’s work.
Conventional VARA Rights Application
The third and fourth VARA rights, providing for the disavowal of a work that has been distorted, mutilated, or modified in a way that is prejudicial to the artist’s honor or reputation and for the prevention of such treatment, are sometimes the source of controversial litigation. In the US, moral rights are often seen as competing with traditional norms in property law, especially a subsequent owner’s ability to control his or her own property. Courts often face difficulty balancing intangible artists’ rights against real-world property rights, which has produced surprising results. Just as importantly, the art market is free to render its own decision concerning authorship and value, regardless of what a court of law might determine. The following examples illustrate how moral rights can be a double-edged sword in litigation.
Cady Noland, Log Cabin
Cady Noland, Log Cabin
Photo courtesy of Artnet
Celebrated American artist Cady Noland initiated a string of lawsuits against a collector and German gallery, most recently alleging that her rights under VARA were violated in a matter evoking a modern ship of Theseus. See Noland v. Janssen, No. 17-CV-5452 (JPO), 2020 U.S. Dist. LEXIS 95454 (S.D.N.Y. June 1, 2020). The work in question, Log Cabin, is a facade of a traditional log cabin created using pre-cut lumber ordered from a manufacturer in Montana. In 1955, the work’s then owner, Wilhelm Schürmann, loaned the work to a German museum, where it was displayed outdoors. Years later, several pieces of lumber began to rot and were replaced by conservators using lumber sourced from the same Montana manufacturer. Schürmann would go on to sell the work to Ohio collector Scott Mueller for $1.4 million, who had the foresight to include a buy-back option in the event the work was disavowed. Noland had already achieved some notoriety for disavowing works, which proved to be well-earned when she disavowed Log Cabin in a hand-written fax after learning of the conservation measures.
As one might expect when tempers run as high as sale prices, litigation ensued. Mueller sued the gallery for failing to return the purchase price, and the case was dismissed. See Mueller v. Michael Janssen Gallery PTE. Ltd., 225 F. Supp. 3d 201 (S.D.N.Y. 2016). But then Noland initiated a lawsuit of her own alleging the work infringed upon her copyright. Noland was granted leave to amend her complaint twice, with VARA violations added to her final amended complaint, but the litigation was ultimately dismissed. The judge concluded that Log Cabin was not entitled to copyright protection, and therefore not entitled to protections under VARA; and that in any case, any alleged violation occurred outside the United States. However, the case is just as notable for what it did not decide; namely, whether the unauthorized conservation of Log Cabin constituted a distortion, mutilation, or modification prejudicial to Noland’s honor as an artist. The absence of an answer has led some to question where the line might be drawn and may inspire future artists to make novel arguments along similar lines. As of 2020, Noland’s attorney was considering an appeal.
Richard Prince & Ivanka Trump
Appropriation artist Richard Prince, who has infamously tested the limits of copyright law on several occasions, ironically chose to exercise his VARA rights when he disavowed a work he sold to Ivanka Trump, apparently for political reasons. In a 2017 tweetreading, “This is not my work. I did not make it. I deny. I denounce. This fake art.” Prince publicly disavowed a work featuring his comment on one of Ivanka’s Instagram posts as part of his series “New Portraits.” The tweet followed a series of public statements criticizing Ivanka’s father, then presidential candidate, Donald Trump. The language of the tweet also appears to mimic Trump’s staccato speaking style and reference to “fake” claims. It is not clear whether the tweet would have become the subject of litigation, as Prince later confirmed in an interview that he voluntarily returned the $36,000 he initially received for the piece. Unfortunately, this leaves questions unanswered about under which conditions an artist may disavow an artwork and a disavowal’s effect on the market. In the absence of litigation, Prince’s actions set a non-legal precedent that an artist may disavow a work for political reasons if he or she has the cash on hand to reimburse the purchase price. In the end, Prince may have only increased the value of the work, still held by Ivanka, and whose creation by the artist is well-documented on Instagram.
5Pointz and Aerosol Art
5Pointz murals. Photo Pelle Sten, via Flickr.
Perhaps the most famous case involving the application of VARA involves graffiti mecca, 5Pointz. The Second Circuit Court of Appeals sent shockwaves through the world of copyright when it upheld a staggering $6.75 million damages award based on VARA violations for temporary works of street art. See Castillo v. G&M Realty L.P., 950 F.3d 155 (2d Cir. 2020). An abandoned warehouse in Queens was transformed into a graffiti mecca colloquially referred to as 5Pointz, a place where some of the city’s most notable (or notorious) street artists vied to make their own contributions to its decorated halls. The building’s owner, Gerald Wolkoff, initially welcomed their attention, and allowed artists to paint the walls under the direction of Jonathan Cohen, a graffiti artist known as Meres One, serving in a curatorial role. The matter was taken to court when Wolkoff wanted to take advantage of rising real estate prices and demolish the building to make way for condominiums. The artists, led by Cohen, protested the destruction, arguing that their works had achieved “recognized stature,” warranting protection under VARA. Then in 2013, while litigation was still pending, Wolkoff whitewashed the entire warehouse under the cover of night.
In 2018, Brooklyn Supreme Court Judge Frederick Block awarded the maximum statutory penalty under VARA, $150,000 per artwork, totaling nearly $7 million in damages. See Cohen v. G&M Realty L.P., 320 F. Supp. 3d 421 (E.D.N.Y. 2018).The 32-page decision was precedential in several ways. First, Judge Block vindicated street artists everywhere when he determined that these artworks had achieved a level of stature meriting copyright protection; in his analysis, he looked beyond the conventional art world for a group that venerated these works, and in doing so, opened the door for a dearth of unconventional art to receive legal protection. Perhaps most notably, the case was under close observation for its potential to establish a precedent for damages under VARA. Clearly influenced by Wolkoff’s surreptitious behavior, Judge Block’s decision to award the maximum penalty was still shocking. The case would work its way up the appellate ladder until finally being rejected for certiorari by the United States Supreme Court in 2020. The case now signals that VARA rights are not to be treated lightly and foretells the dire consequences that can result from a violation.
The above-mentioned disputes illustrate that moral rights cases are complex, and NFTs could further muddy the waters for judges unaccustomed to the peculiarities of the art market and crypto assets. At the moment, there is nothing preventing unscrupulous actors from minting NFTs of works and selling them as their own despite lack of good title, ownership, or IP rights. For instance, a so-called “market disruptor,” GlobalArtMuseum, carried out a “digital art heist” by creating NFTs of famous works held in top-tier museums, such as the Rijksmuseum. GlobalArtMuseum then placed the NFTs for sale on popular marketplace OpenSea. This was a publicity stunt, but nevertheless left the museums rattled. Similar acts could violate copyright law. Tracking down those responsible could prove complicated and the enforcement of legal remedies is not necessarily guaranteed. Online platforms operate across borders, so it may be difficult to determine which law applies, and countless transactions may occur in the meantime. Moreover, some lawyers are not convinced that NFTs qualify for copyright protection because it is an open question as to whether they are original works of authorship. Artists will need to keep this possibility in mind when minting NFTs and exerting moral and economic rights.
Another issue with NFTs pertains to ownership and the integrity of works. A self-proclaimed group of “tech and art enthusiasts” recently purchased a Banksy print, minted it as an NFT – and then burned the original. The group circulated the video of the burning print on YouTube, stating that “by removing the physical piece from existence and only having the NFT, [this]… will ensure that no one can alter the piece and it is the true piece that exists in the world.” This certainly raises the question of authenticity for NFTs when a physical work is also present; which is the original? If the physical work is mutilated or destroyed, but the NFT survives, how will this affect the damages an artist is entitled to receive under VARA? Hypothetically, Banksy could have a viable cause of action under VARA against the group, as his work is certainly of a recognized stature, but no court has ruled on the matter yet.
Conclusion
What does the NFT frenzy tell us? Art is constantly evolving, and the market is quick to adapt once supply and demand for new forms are established. NFTs are operating as a herald of such change, albeit at a much faster pace than anticipated. But this means that current legal and regulatory frameworks are not equipped to deal with some of the issues related to NFTs, including economic and moral rights. Artists entering the world of NFTs should be aware of these issues and consult legal professionals familiar with the pitfalls in this field. Amineddoleh & Associates is proud to represent and advise artists and collectors creating, selling, and purchasing all types of artwork and collectibles – NFTs included.
