Wednesday, 10 December 2014

Annual Art Law Institute Presented by Washington Lawyers for the Arts


This is a reminder to our Seattle-area readers that the annual Art Law Institute presented by Washington Lawyers for the Arts will be held on Monday, December 15.  This all-day CLE program includes presentations on copyright year in review, trademark year in review, a panel on international intellectual property issues with special focus on international issues for artists (moderated by yours truly), design patents, legal and policy issues for streaming media, and ethics.  Register here.


Wednesday, 26 November 2014

Swiss museum decides to accept Gurlitt's collection

The trustees of the Kunstmuseum Bern announced yesterday that the museum has decided to accept the bequest of Cornelius Gurlitt's art collection.

We have already spoken herehere and here about Gurlitt's art collection, which was discovered in a Munich apartment in 2012 during a routine tax investigation. The majority of the collection is believed to have been amassed by Gurlitt's father, the Nazi-era art dealer Hildebrand Gurlitt, who told US authorities after World War II that his collection had been destroyed by Allied bombing.  

After Gurlitt's death last May, the Swiss museum took the full six months allowed by German probate law to decide whether to accept or reject the gift.  At a joint press conference, the chairman of the museum's board of trustees announced that works that are believed to have been looted will stay in Germany, while a team of researchers investigate their provenance. In this regard, the Kunstmuseum announced today that it has set up a provenance department.

The decision to accept Gurlitt's bequest is likely to open the Kunstmuseum up to years of litigation, as the President of the Jewish World Congress, Ronald Lauder, has already warned.

In addition, the Kunstmuseum's decision to accept the bequest comes just a few days after Gurlitt's cousin, Uta Werner, announced that she has submitted a certificate of inheritance to the Munich probate court, challenging the testamentary capacity of Cornelius Gurlitt to bequeath his collection to the Kunstmuseum. If this were the case, Gurlitt's cousin and other heirs would inherit the whole art collection. Gurlitt's heirs have already said that – unlike the Kunstmuseum – they will return each artwork to their rightful owner.

We shall have to wait and see who will eventually manage Gurlitt's collection.

Tuesday, 18 November 2014

Orphaned and abducted cultural fragments: a forthcoming seminar

Here's some information concerning a fascinating event which is coming up early next month, and which Art & Artifice blogger Liz Emerson will be attending. If you are going to be there too, do make a point of saying "hello" to her!  If you want to get in touch with her or have any questions to ask her, just email her at elizabethemerson@mac.com.


Monday, 17 November 2014

New Bill Proposed to Amend U.S. Copyright Act to Protect Inheritance Rights of Same-Sex Spouses



On November 12, 2014 Senator Patrick Leahy proposed Bill 2919 which would amend the Copyright Act to insure that all married couples are treated equally under the Act.

As many of our readers know, generally the term of a copyright lasts decades beyond the death of the author, and that copyrights may pass to an author's heirs upon death. Section 203 of the Copyright Act also endows an author's heirs with the right to terminate transfers and licenses made by the author during his or her life under certain conditions. Importantly, the acquisition of these rights by an author's heirs may rely upon the Copyright Act's definition of "widow" and "widower" contained in 17 U.S.C. § 101. Under this definition an author's "widow" or "widower" is the author's surviving spouse under the law of the author's domicile at the time of death. Essentially, this means that a same-sex couple legally married in Vermont would not have the same rights under the Copyright Act if, at the time of the author's death, they live in a state that does not recognize gay marriage, such as Georgia. Senate Bill 2919 would cure this inequity by amending the definition of "widow" and "widower" to hinge upon whether the author's marriage would be recognized by the courts of the state where the author was married at the time of the author's death. As Senator Leahy stated when introducing Senate Bill 2919, the bill "amends the Copyright Act to look simply at whether a couple is lawfully married--not where a married couple happens to live when the copyright owner dies. It will ensure that the rights attached to the works of our Nation's gay and lesbian authors, musicians, painters, photographers, and other creators pass to their widows and widowers. Artists are the creative lifeblood of our Nation, and our laws should protect their families equally."

The full text of the proposed bill is available here, and the transcript of the entirety of Senator Leahy's introduction here. The bill is presently in committee and has not yet been signed into law.


Tuesday, 28 October 2014

A tale of two Schieles

We have quite regularly discussed different cases of art stolen from Jewish families by the Germans during World War II on this blog. The one point they all have in common is that it is always difficult to predict the outcome. There is never a straightforward answer to whether the art will be returned.

A recent case illustrates the incongruent approaches to the cases. 

Two paintings by Austrian artist Egon Schiele are being auctioned next month. One by Christie’s and one by Sotheby’s.

Schiele's "Seated Woman with Bent Left Leg"
Schiele's "Town on the Blue River"

The result of the sales will, however, be very different for the family of Fritz Grünbaum, who once owned both pieces.

As reported by The New York Times:
Christie’s is selling Schiele’s 1910 watercolor “Town on the Blue River,” on Nov. 5 in conjunction with a restitution agreement that treats the work as looted art and provides compensation to Grünbaum’s heirs. 
Sotheby’s is selling a 1917 gouache and crayon work, “Seated Woman With Bent Left Leg,” on Nov. 4 under an arrangement that will not compensate the family. The auction house is relying on rulings by United States federal courts that found the family waited too long to file its claim and that there was insufficient evidence to conclude “Seated Woman” had been stolen.
The different approaches apparently stems from the fact that it all comes down to the word of a Swiss art dealer who says he bought dozens of Schieles from Grünbaum’s sister-in-law.

Grünbaum had accumulated a substantial art collection prior to 1938 when he was sent to Dachau and all his art was seized. His collection included 81 Schieles, however, it is not clear whether these two paintings were part of it.

After the collection was seized, it was moved to a storage depot in Vienna. Grünbaum died in 1941, and his wife, Elisabeth, died in 1942, in a concentration camp.
 The New York Times continues:
The next time any of the works from Grünbaum’s collection surfaced on the art market was in the 1950s, when the Swiss dealer, Eberhard Kornfeld, sold some. Mr. Kornfeld later said he had purchased them from Elisabeth Grünbaum’s sister, Mathilde Lukacs-Herzl, who died in 1979. Mr. Kornfeld produced correspondence with Ms. Lukacs-Herzl, tax stamps and other documentation to support his account. 
Jonathan Petropoulos, the former art research director for the Presidential Advisory Commission on Holocaust Assets in the United States, has called Mr. Kornfeld’s story suspicious, in part because the documents carry varied spellings of the name “Mathilde” in penciled signatures and because he did not identify her as the source of the works until decades after her death. In any case, Mr. Petropoulos, who was hired by the Grünbaum family legal team, argues that Ms. Lukacs-Herzl did not have title to the art because she was never declared Grünbaum’s heir by an Austrian court, as required.  
So, on the one side Sotheby’s is taking Kornfeld's word that he acquired the paintings lawfully. On the other, Christies's acknowledge that the position is complicated and therefore will treat the painting as looted art and compensate Grünbaum’s heirs.

While the lack of consistency is not surprising, it is nevertheless disappointing particularly since it is very likely that the paintings came from the same collection. And while there are several organisations that are still working to right wrongs that took place over 70 years ago, as those events become ever more distant it becomes even more likely that the disparities will only increase.


Source: The New York Times, 24 October 2014

Monday, 27 October 2014

Cardsharps in court -- but are they Caravaggio's?


Jane Peel, on the BBC website, reports on litigation over a professional negligence claim hinging on the attribution of the painting illustrated above, "The Cardsharps". She explains:
A painting sold by Sotheby's in London for £42,000 is at the centre of a legal battle amid claims that it could actually be the work of Italian baroque master Caravaggio and worth up to £11m. Former owner Bill Thwaytes, of Penrith in Cumbria, has accused the auction house of "professional negligence". When it was sold in 2006, it was attributed to a follower of the artist. Mr Thwaytes said more should have been done to determine whether it was by Caravaggio, who died in 1610.
The oil painting The Cardsharps depicts a wealthy man falling victim to two cheats at a card table. It was bought by the Thwaytes family in 1962 for £140.In 2006, Mr Thwaytes asked Sotheby's to value the work and the auction house concluded that the painting was one of several copies made of the original, which is on display at the Kimbell Art Museum in Fort Worth, Texas.

In the 1950s, the Thwaytes family sold a genuine Caravaggio, The Musicians, to the Metropolitan Museum of Art in New York. Mr Thwaytes suspected his version of The Cardsharps was also likely to be authentic. But Sotheby's decided the copy was not created by the Italian master himself and attributed it to a 17th Century follower. The painting was sold for £42,000. But its new owner - a British collector - has declared it to be by Caravaggio and worth millions.  
... Henry Legge QC, for Mr Thwaytes, said the issue was not whether it could be proved on the balance of probabilities that the painting was by Caravaggio. The core of the case, he said, was a claim of negligence. He said Sotheby's had failed to thoroughly research the painting, consult outside experts or properly advise Mr Thwaytes. Sotheby's ... has described suggestions the painting is worth £11m as "preposterous".

In papers submitted to the court, the auction house said its experts were competent to assess the artwork and none of the leading scholars who have examined it since it was sold think it is by Caravaggio. Mr Thwaytes and some of the world's leading Caravaggio experts will give evidence at the trial, which is due to last for four weeks.
 This case can have a number of outcomes, including the following:

  • Sotheby's are professionally negligent and the painting is (probably) a genuine Caravaggio
  • Sotheby's are professionally negligent and the painting is(probably) not a genuine Caravaggio
  • Sotheby's are not professionally negligent and the painting is (probably) a genuine Caravaggio
  • Sotheby's are not professionally negligent and the painting is (probably) not a genuine Caravaggio

Discounting the possibility that Sotheby's are negligent, that the painting is actually the original and that the Kimball one is a copy, it looks as though most of the outcomes are likely to be of little benefit to the Thwaytes family.  Still, it will be good to see what findings of fact the court makes with regard to the standard of care that an auction house must achieve in order to avoid the risk of liability for professional negligence.

Saturday, 25 October 2014

Surprise: Art can be a business for tax purposes

In the recent US case Crile v Commissioner, the IRS sought to show that the forty-year career of a well-known artist, some of whose works hang in the Metropolitan Museum of Art and the Guggenheim, was not a business, but merely a hobby. 

The case turns on the following point. Relevant US law permits taxpayers to deduct the expenses of their trade or business from the taxable profits of that business. And, if the expenses are greater that the profits, then the taxpayer may generate a net loss. That loss may be of value to the taxpayer if she or he has other profits against which the loss can be set, thereby reducing the overall tax bill payable. 

Suffering is not a pre-requisite to deductibility:
The Comic Almanack, 1847
© The Trustees of the British Museum

But if the taxpayer's activities are not a business but a "hobby", then the deduction position is different. The expenses of a hobby can be deducted against any profit it may make, but only to the extent of those profits. Where the expenses of a hobby are greater than its profits, the taxpayer is not entitled to generate a loss. This is intended to prevent a taxpayer from running a profit-making business and at the same time enjoying a loss-making hobby activity (such as horse breeding or drag racing) - and using the losses generated in their spare time to reduce their business tax bill to nil. 

In the case of Crile the artist made a profit working as an art professor, but a loss working as an artist. When she sought to offset the two, the IRS argued that her losses as an artist were not allowable since her artistic production was a hobby. 

In determining whether an activity is a hobby or a business, the IRS will consider whether the activity is carried on with the objective of making a profit, or whether the real objective is  the taxpayer's own entertainment. In coming to a decision the IRS will apply the "hobby loss rules". These are nine different factors to be considered, such as whether the taxpayer keeps accurate books and records of the activity, how much of the taxpayer's time an activity is expended on the activity, to what extent the activity has elements of personal enjoyment or recreation and so on. 

The outcome of the case, hailed as a "victory" for artists, was that the taxpayer's long and distinguished career - on which she kept detailed records, used a bookkeeper and agent, and spent much of her working time, although she typically lost money - was indeed a business. The court acknowledged that given the unusual nature of the art world, an atypical profit structure - such as a string of losses over many years, or sudden success following a successful show or review - would not necessarily be taken as evidence of a hobby. Nor would a business "be turned into a hobby merely because the owner finds it pleasurable" which is a relief - it would certainly be harsh tax result if it was necessary to dislike your own business in order for your expenses to be deductible. "Suffering," the court confirmed, "has never been made a pre-requisite to deductibility."  


It has been pointed out however that the deductions which the IRS sought to disallow in this case were suspiciously large, and in some instances were of a personal nature which should not in any event have been deductible. The taxpayer's approach to deductions, the court noted, was that "most experiences an artist has may contribute to her art and that most people with whom an artist socialises may become customers or otherwise enhance her career" - on which basis she deducted a great many expenses which did not pertain directly to her career as an artist, such as cable television bills, taxis to the opera, and tips to doormen. 

The IRS therefore made a twofold argument: firstly that the taxpayer's activities were a hobby and as a second (and more reasonable) line of defence that, if the activities were a business, then the expenses in question were not all "ordinary and necessary" for that business and therefore not deductible. While the court's decision as to the first argument will be a relief for US artists, the decision on the second may not be good news for this particular taxpayer. 

Monday, 13 October 2014

At Geek Girl Con: An Exploration of Fan Fiction and the Law



This weekend I had the pleasure of participating in a panel presented by Washington Lawyers for the Arts at Geek Girl Con in Seattle.  For those not in the know, Geek Girl Con is a conference dedicated to connecting women and celebrating the legacy of women contributing to science, technology, comics, art, literature, and game design, among others.  Our panel was dedicated to the legal issues surrounding the creation of fan fiction including the basics of U.S. copyright law and the public domain. We also explored the potential attachment of copyright to specific characters or settings, which requires a certain level of delineation by the original author so as not to grant a monopoly over more generalized ideas, stock characters, plots, or themes.  In addition, we discussed fair use as a defense to accusations of copyright infringement including issues around parody, good faith, and degrees of transformativeness.

Our audience posed many thoughtful questions, giving us an opportunity to reflect on the disconnect between the law of copyright and the business realities of suing fans for making fan art as well as a chance to debunk some myths about supposed bright line rules in fair use. The difficulty of course, as I've reflected on recently, is that we are left with rather vague guidelines for artists who are creating work involving appropriated materials. Despite these circumstances some excellent resources, such as Columbia University's Fair Use Checklist, may help those working with appropriated materials spot potential trouble. Other resources, including our slide deck from the presentation, are available on the Washington Lawyers for the Arts website. Although the legal issues may be aggravatingly imprecise, education is the best way to prevent unnecessary self-censorship, allowing artists to explore (or more aptly, appropriate) with awareness.


Friday, 10 October 2014

Met rescues an Egyptian treasure from auction

New York's Metropolitan Museum has acquired the nearly 4,000 year old Egyptian "Treasure of Haregeh" from Bonhams after it was withdrawn from public auction.

Some pieces of the Haregeh treasure

The Treasure consists of 37 pieces from the Middle Kingdom’s 12th Dynasty (1897-1878 BC) found within the burial tomb of a rich woman of that period. It was excavated between 1913 and 1914 by the British School of Archaeology in Egypt, and was exported from Egypt to London following permission from the Egyptian authorities under the terms of the contemporary excavation license. The Treasure was then passed on to the St Louis Society, as consideration for the latter’s financial contribution towards the excavation. It has been said that the St Louis Society, an independent non-profit organisation associated with the Archeological Institute of America, received the items on the condition that they would always be shown in a public collection.

For a century, the treasure was held at the St Louis Art Museum, until the St Louis Society decided to sell the pieces at auction in London, as the annual storage cost had become too high for the organisation The treasure was included in Bonham’s catalogue for its antiquities auction on October 2 for the estimated price of between £80,000 and £120,000 (US$ 130,000-200,000). It featured prominently on the auction house’s website, but was then withdrawn before the lot came under the hammer.

The withdrawal probably occurred since the St Louis Society's decision to sell the treasure was widely criticised by art experts as a loss of a public cultural resource.

The national office of the Archeological Institute of America, the UCL Petrie Museum of Egyptian Archeology and the Egypt Exploration Society insisted that the sale would have contravened the public display condition in the original agreement.

Moreover, those experts stressed that the legal sale of antiquities could provide incentives for global criminal activity. Dr Naunton of the London-based Egypt Exploration society said "While there is a market and while antiquities fetch very high prices, there is incentive for people on the ground in Egypt to continue to find objects and sell them. In this way, legal sales are driving illegal trade". 

Other experts also criticised the sale on the grounds that it would be unethical for publicly-owned collections to be put up for sale to private collectors. Public museums offer the best hope that antiquities are safeguarded against loss or deterioration, and that they remain accessible to scholars and the wider public for study and enjoyment.

Fortunately, the Met intervened by purchasing the majority of the treasure from Bonhams, except for an alabaster travertine headrest which was sold to a private buyer. In a press release, a spokesman for the St. Louis Society's said : "The Metropolitan Museum in New York is the best home for the treasure. We are looking forward to seeing objects and jewelry on exhibition".

Thursday, 2 October 2014

Keep off our worms? No, keep off our walls ...

The United Kingdom, like any modern multiracial and multicultural society, takes great pains to protect minorities from the hostility and prejudice of others.  The same jurisdiction is also accused of being the bastion of unthinking and self-defeating political correctness.  Bearing this in mind, readers are invited to draw their own conclusions regarding the following item on the BBC website:
A new Banksy mural showing a group of pigeons holding anti-immigration banners has been destroyed following a complaint the work was "racist". The mural in Clacton-on-Sea -- where a by-election is due to take place following the local MP's defection to [the politically incorrect] UKIP [whose policy on immigration and border control can be found here] -- appeared this week. It showed four pigeons holding signs including "Go Back to Africa", while a more exotic-looking bird looked on. The local council, which removed it, said it did not know it was by Banksy [Obviously the council was fooled by the style and the content. Maybe they thought it was a newly-discovered fresco by Leonardo]. 
 
Tendring District Council said it received a complaint that the mural was "offensive" and "racist".  
... 
Nigel Brown, communications manager for the council, said: "The site was inspected by staff who agreed that it could be seen as offensive and it was removed this morning in line with our policy to remove this type of material within 48 hours. We would obviously welcome an appropriate Banksy original on any of our seafronts and would be delighted if he returned in the future." ...
Now why would be want to do a thing like that?

This blogger must confess that, when he saw the offending artwork, he thought it a brilliant way of poking fun at what he suspects as being the artist's view of the social attitudes and voting intentions of the good folk of Clacton-on-Sea and that, if anyone was going to be offended by this message, it should be them.

Presumably a banning order should also be placed on "The Ugly Duckling", which has presumably upset and humiliated generations of swans.