Art Case Update
5 Pointz, New York. Image credit: Max Touhey and Curbed New York.
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 a failed attempt to trade mark the Indigenous name of a medicinal tree, a US case awarding millions of dollars in damages to graffiti artists whose works were whitewashed, and a Dutch museum’s attempt to sue a British art dealer for failing to realise hackers had hijacked their sales deal, plus more.
Australia
Queensland business fails to trade mark Indigenous name of a medicinal tree
In April 2017, Katja Ada Amato and Klaus Von Gliszczynski filed an application to trade mark ‘Gumby Gumby’, the Indigenous name of a tree with orange berries which is used in traditional bush medicine. The business partners have owned a patent to produce medicinal products from the leaves of the ‘Gumby Gumby’ tree since 2008, and they successfully applied to trade mark an image featuring cupped hands holding a pile of leaves underneath the words ‘Gumby Gumby’ in 2016.
The ‘Gumby Gumby’ trade mark application formally expired in December 2019 because the applicants did not overcome objections to their case in the allocated time. Issues included research indicating that ‘Gumby Gumby’ is a commonly used name for the Pittosporum angustifolium tree, the name is merely descriptive of the goods, and it is not distinctive enough to be registered as a trade mark.
If they had been successful, the non-Indigenous applicants would have gained exclusive rights, preventing others, including Indigenous business owners from freely trading medicinal products using the word ‘Gumby Gumby’. Academic research suggests that the name can be traced back to the Dreamtime of the Yirendali people from western central Queensland. In January 2020, 11 academics applied to IP Australia to review and cancel Mr Von Gliszczynski and Ms Amato’s patent to produce ‘Gumby Gumby’ products, arguing that the patent lacks novelty and originality.
IP Australia has developed a work plan for 2020-21 to strengthen the protection of Indigenous Knowledge. Proposals for changes to how IP Australia examines applications involving Indigenous Knowledge are open for feedback here.
Fake Indigenous Art Bill currently before Federal Parliament
The Competition and Consumer Amendment (Prevention of Exploitation of Indigenous Cultural Expressions) Bill 2019 is currently before Federal Parliament. The Bill seeks to amend the Competition and Consumer Act 2019 (Cth) to make it an offence to supply or offer commercial goods that include Indigenous cultural expressions, unless a transparent arrangement has been made with the relevant Indigenous artist or community.
The Bill was referred to the Senate Environment and Communications Legislation Committee and their report is due on 26 March 2020. Progress of the Bill can be tracked here.
International
US Appeals Court affirms rights and monetary damages awarded to graffiti artists whose work was destroyed without warning or consent
In February 2020, the United States Court of Appeals for the Second Circuit upheld a $6.75 million award of damages to a group of graffiti artists. The artists sued a New York real estate developer, Gerald Wolkoff, for whitewashing their work without warning or consent, at the famous 5Pointz graffiti centre in Long Island City in 2013. A jury had ruled in favour of the artists in November 2017. In February 2018, Brooklyn Supreme Court Judge Frederick Block awarded damages of $150,000 for each of the 45 destroyed works, totaling $6.75 million. Wolkoff’s appeal of this decision was unsuccessful.
This is a landmark case confirming that the graffiti artists were protected by the Visual Artists Rights Act 1990 (VARA). The Court upheld Judge Block’s finding that Wolkoff willfully violated the moral rights granted to the artists under this statute by destroying their work. VARA affords artists the right to prevent any intentional distortion or modifications of artwork that are prejudicial to an artist’s honour or reputation (section 106A(a)(3)(A)) and the right to prevent destruction of their work if it has achieved recognised stature (section 106A(a)(3)(B)). These rights are violated if there is any intentional or grossly negligent destruction, or distortion. Under sections 504(b) and (c) an artist who proves a violation of VARA may obtain damages. A maximum of $150 000 can be awarded per work if violation is willful (section 504(c)). The statute provides specific provisions for artworks incorporated into a building, such that artists’ rights prevail where their work can be removed without destruction or modification. The exception to this provision is where the building’s owner has made a diligent, good faith attempt without success to notify the owner to remove the artwork, or written notice has been provided and the owner fails to remove the work within 90 days (section 113(d)(2)). Wolkoff had not complied with these requirements.
Judge Block had found at first instance that the 45 destroyed works held “striking technical and artistic mastery and vision worthy of display in prominent museums if not on the walls of 5Pointz”, emphasising the artists’ recognition beyond the 5Pointz works and expert testimony indicating the stature of the works. The Court of Appeals agreed that the works held recognised stature for being of high quality, status or calibre, as was acknowledged by the artistic community.
The Court noted that there is nothing in VARA that excludes artwork of a temporary nature from attaining recognised stature. The judgment highlights that street art has become a major category of contemporary art, and street artists are acknowledged by both the art community and the general public as holding significant artistic merit and cultural importance. Further, the Court found that Judge Block had correctly found that Wolkoff whitewashed the artworks without any genuine business need, but rather, as an “act of pure pique and revenge” against the artists. The unfinished nature of the whitewashing left the artworks easily visible under the coats of white paint, leaving the mutilated works visible to members of the public passing by.
Cases brought under VARA have rarely gone to trial and are generally settled privately. By awarding the maximum amount for damages under VARA, the Court sought to deter Wolkoff from future violations of VARA and encourage other building owners to negotiate in good faith with artists.
By contrast, the issue of whether graffiti art is protected under moral rights law has not been brought before a court of law in Australia. In Australia, moral rights laws are provided for in the Copyright Act 1968 (Cth) and similarly afford artists the right to prevent their work from being treated in a derogatory manner, otherwise described in the statute as the right of integrity of authorship (section 195AI), as well as affording artists the right to be attributed as the author of the work (section 193) and the right to not be misattributed (s195AC).
Dutch museum attempted to sue British art dealer for failing to realise hackers infiltrated sales deal of a John Constable painting
The Rijksmuseum Twenthe in the Netherlands had been engaged in a months-long email negotiation to purchase a John Constable painting from British art dealer, Simon C Dickinson, when hackers hijacked the exchange, fraudulently posed as Dickinson and persuaded the museum to pay 2.4 million pounds into a Hong Kong bank account.
The museum attempted to sue Dickinson for damages, claiming that he should have known about the fraud and intervened. They argued that the art dealer’s negotiators were aware of the hackers’ emails and were negligent for failing to maintain reasonable cybersecurity, doing nothing to stop the transaction and not correcting the impression that the emails were from Dickinson. The art dealer argued the museum should have independently confirmed that the bank details were genuine.
In January 2020, Judge Pelling of the London Circuit Commercial Court dismissed the museum’s claims but said they may file another application if an alternative way to claim damages is identified. According to a report by Bloomberg, the hackers’ identity remains unknown and both parties continue to claim it was the other who was hacked.
US Court orders Edelman Arts to pay $1 million for a failed sales deal of a Keith Haring painting
New York Supreme Court Judge Cohen ruled that art dealer and collector Asher Edelman’s company, Edelman Arts, must pay $1 million plus interest and costs for a failed sales deal of a Keith Haring painting. Edelman Arts agreed to purchase the painting from art dealer Lio Malca for $5 million in November 2016 and was invoiced accordingly. Edelman Arts replied with an executed resale certificate by forwarding a signed document identifying Edelman Arts as the purchaser for resale and accepted the invoice terms without objection.
However, Edelman Arts failed to pay the invoice, stating that the intended ultimate buyers of the work, to whom Edelman Arts hoped to resell the work, no longer wanted to purchase it. Edelman Arts claimed they were merely acting as an agent on behalf of the client who changed their mind, and the transaction was cancelled within a reasonable amount of time. Malca argued the invoice remained outstanding regardless of Edelman’s client backing out.
Following the failed deal, Malca placed the Haring painting for auction in November 2017 and negotiated a $4 million guarantee from Christie’s. In April 2018, Edelman Arts filed a complaint alleging that Malca was threatening to sue them under the unpaid invoice, and sought a declaration rendering the invoice null and void. Malca responded two days later by countersuing Edelman Arts for $1 million in damages, the difference between the original deal $5 million negotiated in 2016 and the $4 million payment from Christie’s in 2017.
In December 2019, the Court ruled in favour of Malca, finding that he had provided sufficient evidence to establish contract formation, breach and damages to grant him summary judgment. Edelman Arts’ defenses, including acting as an agent for a disclosed principal, failed to raise material issues of triable fact. This case highlights that art dealers are subject to liability when agreeing to buy artwork in their own name, even if they intend to immediately resell the work to a client as the ultimate buyers. In this case, Edelman Arts had no written agency agreement with the client, nor was there any evidence of a history indicating an agency relationship, as Edelman Arts had never been involved in an art transaction with that client previously. Additionally, Edelman Arts’ response to Malca’s invoice did not reference that payment was contingent upon their ability to secure a resell buyer.
More cases of interest
Museum of Modern Art trustee, Steven Tananbaum, settled with Gagosian over long delays in receiving three Jeff Koons sculptures. Read more here.
Descendants of a Jewish art collector are suing the Stedelijk Museum for the restitution of a Kandinsky painting. Read more here.
Metropolitan Museum of Art returns a 16th-century silver cup stolen by Nazi art dealer. Read more here.