Art Case Update – December 2020
Paul Signac, Calanque de Canoubier (Point de Bamer), 1896. Photo: Manhattan District Attorney’s Office. Source: The Art Newspaper
Guest Work Agency is your go-to source on art-related legal cases and legal reform presently taking place within Australia, as well as select cases internationally.
In this story, our Paralegal Associate, Reetika Khanna, reports on an unsuccessful copyright infringement claim by an Australian fashion designer, ongoing copyright negotiations around the use of the Aboriginal flag, a UK decision ordering disclosure of confidential information about the sale of a painting, plus more.
Australia
Federal Court rules that neoprene tote bag design by Australian fashion designer, State of Escape, is not protected by copyright law
Australian designer, State of Escape, claimed that the neoprene tote bags imported and sold by another brand, Chuchka, were an infringement of copyright in their own ‘Escape Bag’. State of Escape argued that the ‘Escape Bag’ was a ‘work of artistic craftsmanship.’ Both bags are made out of a perforated neoprene material, featuring sailing rope handles which wrap around the body and base of the bag. State of Escape’s copyright infringement claim was unsuccessful. In November 2020, Federal Court judge, Justice Davies, ruled that the ‘Escape Bag’ is not a ‘work of artistic craftsmanship’ within the meaning of ‘artistic work’ in s 10(1) of the Copyright Act 1968 (Cth) and therefore is not protected by copyright law.
Under s 32(1) of the Copyright Act, copyright subsists in a work if it is an original literary, dramatic, musical or artistic work. Section 10(1) defines an ‘artistic work’ to include paintings, sculptures, drawings, engravings, photographs, or a ‘work of artistic craftsmanship’ that does not need to align with the previously stated art forms. To qualify as a ‘work of artistic craftsmanship’, there must be evidence of both artistry and craftsmanship, which requires special training, skill and knowledge for the work’s production. The beauty or aesthetic appeal of the work is not determinative. Rather, focus is placed on assessing the extent to which the work’s artistic expression is unconstrained by functional considerations. Justice Davies found that the ‘Escape Bag’ is undoubtedly a work of craftsmanship, but not a ‘work of artistic craftsmanship’, because the design approach was significantly driven by the function, utility and practicality of the bag, incorporating elements of a conventional tote bag. While the choice of neoprene fabric was a creative choice relatively unconstrained by functional considerations, the choice of sailing rope for the handles, and their arrangement, help to reinforce and maintain the shape of the bag, and the binding around the edge of the bag stops the neoprene from fraying. Thus, the overall design choices embodied in the bag resolve functional issues, as well as adding aesthetic appeal. Further, the designer could not be considered an artist-craftsperson as she has no special training, skill and knowledge relating to the design and manufacture of the bag, and many of the issues she encountered were purely functional in nature. Justice Davies stated: “at its highest, the use of those materials to make an everyday bag was an evolution in styling,” but not the creation of a ‘work of artistic craftsmanship’ protected under copyright law. As they could not establish that the ‘Escape Bag’ was protected by copyright law, State of Estate’s copyright infringement claim against Chuchka failed.
State of Escape also made a claim of passing off under tort law, but this was rejected. A claim of passing off Justice Davies found that even though the bags had obvious similarities, consumers would not have been confused enough to believe that the Chuchka bags were the ‘Escape Bag’. The Chuchka bags had been clearly labelled with the ‘Chuchka’ name mark and a turquoise logo. Additionally, the ‘Escape Bag’ retails for about $300 while the Chuchka bags are just over $100, so consumers will take care in assessing the bags before making a purchase, reducing the chance for confusion.
However, State of Escape was successful in relation to its claim of misleading or deceptive conduct under s 18 of the Australian Consumer Law (Sch 2, Competition and Consumer Act 2010 (Cth)). Chuchka accepted that some of its promotional statements describing the bag as “classic” and “original”, and the brand as “home to the famous neoprene tote” were likely to be misleading. Chuchka gave an undertaking to State of Escape to cease use of these marketing taglines in November 2019. Justice Davies will rule on the relief to be granted to State of Escape for the breach of consumer law at a later date.
Update on Aboriginal flag copyright negotiations
An exclusive worldwide copyright licence to reproduce the design of the Aboriginal flag on clothing is currently held by WAM Clothing, a non-Aboriginal company. Since 2018, WAM Clothing has reportedly issued several cease and desist notices to organisations that used the Aboriginal flag on clothing without their permission.
A Senate Select Committee on the Aboriginal Flag was established in September 2020 to consider options for the Federal Government to facilitate free use of the flag, while respecting the rights and interests of Luritja artist Harold Thomas, who created the flag in 1971. After receiving 74 submissions and conducting six days of public hearings, the Committee recommended that the flag should not be compulsorily acquired by the Federal Government.
The Committee’s report was published in October 2020, recommending a model in which the rights of current exclusive licensees are terminated; the Government enters into an agreement with Mr Thomas for community use of the flag which leaves Mr Thomas’ rights intact; and, custodianship of the flag is vested in an independent Aboriginal body that will be responsible for decision-making about the flag’s use and ensuring that the flag is respected. The Committee stated that compulsory acquisition of the flag by the Federal Government should be rejected, as it would “perpetuate the dispossession, injustices and racial discrimination endured by Aboriginal Australians for more than 200 years, and establish a dangerous precedent in circumstances where much work has been undertaken to strengthen protections for Indigenous artists”.
Mr Thomas did not give evidence at the Committee’s hearings but confirmed he was taking part in confidential negotiations with the Government.
Despite these ongoing negotiations, the Royal Australian Mint released a coin set featuring the Aboriginal flag in November 2020, to celebrate the upcoming 50th anniversary of its design. The Mint stated that they had worked with Mr Thomas and profits from the sale of this coin set would be returned as a dividend to the Federal Government. The coin was designed before the Senate Select Committee Inquiry was established.
For our previous update on the Aboriginal Flag copyright negotiations, see our October art case update here.
International
UK High Court orders London gallery to disclose confidential sales information about a painting allegedly stolen by the claimant’s agent
London gallery Dickinson has been ordered by the UK High Court to disclose confidential sales information about a painting by impressionist, Paul Signac, which was allegedly stolen by the claimant’s agent. In this case, the genuine interest in preserving confidentiality in relation to the location of the painting, and the identity of the buyer, did not outweigh the interests of the claimant in pursuing her good arguable case to ownership of the Signac painting.
The claimant, Ms Hickox, entered into an agreement with Mr Sammons in 2012 to act as her agent for the purposes of selling the painting. Mr Sammons told Ms Hickox that he had agreed on a sale for US$4.85 million, but he never confirmed the completion of the sale, accounted for the proceeds, or told Ms Hickox the whereabouts of the painting. Mr Sammons pleaded guilty to grand larceny and fraud in 2019, but no money was ever recovered from him. Through her own investigations, Ms Hickox discovered that Dickinson had acted on behalf of the buyer of the painting and had transferred the agreed price to Mr Sammons’ account. The gallery refused her requests for details about the transaction on the grounds of confidentiality.
The High Court held that a disclosure order of confidential sales information can be granted if there is a good arguable case that there has been a wrong. Here, Ms Hickox has a good arguable case that since Mr Sammons wrongfully and dishonestly sold her painting, the purchaser did not take better title to the painting, and they would be liable in conversion. It would thus “be unfair if such market custom prevented her pursuing any further legal recourse”.
The High Court rejected the gallery’s argument that no disclosure order should be made because revealing the identity of a private buyer or owner of a work would be against the well-known custom and practice of confidentiality in the art world. The Court stated that such a custom is not an absolute obligation that precludes compliance with a Court order.
Court rules that seller of allegedly forged Frans Hals painting must pay Sotheby’s US$5.3 million for cancelled sale
The London Court of Appeal has upheld a decision ordering the investment company Fairlight Art Ventures to repay auction house Sotheby’s the remaining price of an allegedly forged portrait that had been attributed to Frans Hals.
The painting titled ‘Portrait of a Gentleman’ was bought by Fairlight, an art investor, Mark Weiss Limited (MWL), an art dealership, and Mark Weiss in 2010 for over 3 million euros from Giuliano Ruffini, who has since become the suspect of a criminal investigation into a group of fake Old Masters paintings. ‘Portrait of a Gentleman’ was then sold to a Seattle art collector for US$10.75 million through Sotheby’s. The consignment contract with Sotheby’s – in letter format signed by MWL - included provisions where MWL agreed to the rescission of the sale and return of the purchase price and painting, if the work turned out to be counterfeit. After expert opinions called the authenticity of the painting into question in 2016, the purchaser exercised these rescission provisions. Sotheby’s returned the purchase price and the purchaser returned the painting.
The parties disagreed on the question of whether MWL, Fairlight and Mr Weiss were obliged to reimburse Sotheby’s for the returned purchase price. Weiss and MWL then settled with Sotheby’s out of Court and agreed to pay Sotheby’s US$4.2 million (and Sotheby’s agreed to indemnify Weiss and MWL for claims made by Fairlight).
In December 2019, Justice Knowles ordered Fairlight to pay Sotheby’s US$5.37 million, plus interest and legal fees. He found that Weiss had entered into the consignment agreement on its own behalf and as agent for Fairlight, “[i]t was entering into detailed contractual arrangements for the owners of the Painting including as to risk, delivery, inspection and authenticity.” The evidence showed that Weiss asked Fairlight for consent to submit to Sotheby’s the sale of the painting. The Court of Appeal agreed with this decision in November 2020. Justice Carr observed that
[t]he fact that Fairlight was not named in [the consignment contract] is in no way inconsistent with this conclusion; it may often be the case, particularly in the art world, that parties are keen to remain anonymous. The parties were themselves familiar with such an arrangement, not least because it was adopted when they purchased the Painting in June 2010 (when only Fairlight was named as buyer but the agreement was entered into for both Fairlight and MWL).
Justices Henderson, Jackson and Carr found that both Fairlight and Weiss were committed as principals to the consignment of the painting to Sotheby’s, and therefore were both bound to the contractual term that they would return the purchase price if the painting was determined to be inauthentic.
More international cases of interest
Congolese activist, Emery Mwazulu Diyabanza, who removes African objects on display in French and Dutch museums and makes statements about the crimes of European colonialism, was charged with attempted aggravated theft of a cultural object in France, in October 2020. He was fined 1000 euros, though the penalty could have been up to ten years in prison and a EUR$150 000 fine. Diyabanza was arrested again two weeks later for an action at the Louvre and faces trial in December. Read more here and here.
The mayor of a town in upstate New York is ordering the removal of a large, publicly visible, pro-truth artwork by Nick Cave that covers the façade of a gallery. The mayor argues that the words make up a sign, not an artwork, and violates local and state code because the gallery does not hold a permit for signs. The gallerist is subject to a US$200 fine for each day that the work remains up. Read more here.
The New York State Attorney-General has filed a lawsuit against auction house, Sotheby’s, for millions of dollars in unpaid taxes. It is alleged that Sotheby’s helped wealthy collectors to evade taxes in order to boost its own sales. Read more here.
A French Holocaust survivor who made an agreement with a US museum to gain ownership of a Pissaro painting stolen from her father’s collection on the condition that the work would return to the US after five years on display in France, has filed a lawsuit seeking to bar the return of the work next year. Read more here.
Court rules that John Hinckley, who attempted to assassinate US President Ronald Regan in 1981, can now display his artwork and music under his own name. Under the restrictions of his release from psychiatric hospital in 2016, Hinckley was required to share his work online anonymously. Read more here.
The heirs of abstract artist, Piet Mondrian, have filed a lawsuit against a German museum for the return of four paintings worth over US$200 million. A total of eight paintings were loaned to the museum in 1929 and allegedly never returned, despite their rediscovery in storage in 1947. The heirs are also seeking damages for the four paintings which the museum sold. Read more here.
The US Supreme Court has declined a request to appeal a 2018 decision which ordered a real-estate developer to pay US$6.75 million in damages for whitewashing graffiti art at the iconic 5Pointz site, recognising artists’ moral rights in public murals created with permission. In addition, the developer has now been ordered to pay more than US$2 million in legal fees, in addition to the US$6.75 million initially awarded in damages. Read more here and here and find our previous coverage on this case here.
A group of artists are suing a property owner for painting over murals at San Francisco’s oldest gay bar, drawing on the landmark 5Pointz ruling. Read more here.