Can Contract Law Tame Public Art Controversies?

By Dave Rein

The story of a thirty-two foot tall blue demon with glowing red eyes that that killed its famous creator and greets those arriving at the Denver airport was picked up nationally by the Wall Street Journal, the New York Times and other newspapers.  "Demon" is a bit strong as it was the long-awaited installation of Luis Jiménez's blue mustang commissioned by the Denver International Airport.  But, it has all the ingredients of an attention-getting story:  fame, money, death and even a protest using Facebook.

With some calling for the removal of the blue mustang from the airport, the DIA has been in an uncomfortable spotlight.  But, the DIA has one thing going for it.

Kudos should go out to whomever inserted a provision in the contract between the DIA and the artist that the statue remain in place for five years.  A short detour before I explain why . . . .

Is there any other legal reason why the statute would have to stay in its current location?  Some have suggested that the Visual Artists Rights Act (VARA) which provides artists with limited moral rights in addition to the usual copyright protection would prevent the DIA from removing the enormous mustang. That day may come, but as it stands now, I agree with the Patry Copyright Blog that nothing in the VARA would prevent the DIA from moving the blue mustang -- even if the artist believes that a different location alters the vision he or she had for the art.

An early decision interpreting the VARA (English v. BFC&R East 11th St. LLC) held that moving a sculpture does not, by itself, constitute "destruction, distortion or mutilation."  Although the courts have prevented some entities from moving a sculpture when it would destroy the work itself (i.e. Carter v. Helmsley-Spear), the DIA can rope and move the wild mustang without damaging it.

So why are kudos deserved?  Absent the contractual language, the DIA would have to take a side in the dispute -- understandably, politicians are not eager to take a position over public art that may alienate potential voters.  Likewise, the artist may welcome the attention.  After all, the whole idea of the art may have been to engage us in a conversation.  But, even someone like Jimenez (assuming he was still alive) who has works at the Smithsonian and in several cities -- including my own Kansas City, may not have the clout or financial wherewithal to wage a public relations campaign.  

A contract clause that keeps the art in place at a specific location for 5 years or even 1 year protects both the artist and the public entity that commissions the art from what usually amounts to a vocal minority of the public.  Such a clause effectively creates a "cooling off" period during which the public entity can state that its "hands are tied" because the contract requires the statute to remain in place. The artist can rest assured that for some period of time, his or her art will not be relegated to an obscure location or warehouse.  At the end of the cooling-off period, more reasoned decisions can be made.

Not every contract between an artist and a public entity should include such a clause, but it should be used more frequently than it currently is used.   After all, the blue mustang is hardly the first or last public art project to stir debate or passions.  Just last week, the Artist's Magazine Blog noted the "Money for a Bunny" controversy stemming from Sacramento's commission of a large red rabbit for its airport.  To round out our primary colors, I predict that an airport in the eastern United States will announce the commission of a green elephant -- you heard it here first!   

Sure contracts can be broken, but don't dismiss them as toothless wonders.  One only needs to look to see how the United States government was powerless to stop from giving $165 million or so in bonuses to those in the very unit of AIG that is the poster child for the world-wide economic debacle.

There is nothing wrong with controversy and it may be welcome.  But adding the contract clause should help both the artist and the public entity ride safely through the storm.

When Celebrities Hang Out At The Pawnshop

By Dave Rein

It is no secret that banks large and small pulled the Persian rug (perhaps a green one for St. Patrick's Day) out from art buyers who sought to finance their purchases with a loan.  The Wall Street Journal noted this trend back in April 2008.

So given the current economic mess we are in, it should not come as a surprise that the borrowing-to-buy-art trend has taken a step in the other direction -- the number of pawnshops dedicated to loaning money in return for high-end art as collateral is on the rise.  An article in the New York Times mentioned several prominent art pawnshops:

It is also not unusual for auction houses such as Christie's and Sotheby's to provide a similar service as the art pawnshops by providing a bridge loan to tide the seller over until the auction is over and the proceeds have been collected.  But, the auction houses generally did not offer their clients the ability to pawn art.  In the bad old days of economic prosperity, someone pledging his or her Andy Warhol used to have to stand in line at a traditional pawnshop behind the guy pledging his toaster oven.  Not anymore apparently.

The part of the NYT article that caught my eye was that Annie Leibovitz, one of the most famous celebrity photographers of our time, pledged all of her photographs to Art Capital Group for $15.5 million.  The terms  include not only all of the photographs and contract rights of those that she has taken, but also all of the photographs that she will take.  The Guardian has an excellent audio discussion of the Leibovitz transaction and the possible reasons why Ms. Leibovitz may have been compelled to pledge all of her photographs.  

The photograph that Ms. Leibovitz takes next week?  Pledged to the Art Capital Group.  Next year?  Art Capital Group gets those as well.  That's on top of the 6 to 16% interest rate.  Those are tough terms.

Presumably she gets to receive the income stream from fees and royalties that her photographs generate unless her loan goes into default.  She has a number of projects in the works which should bring in a tidy wad of cash so nobody should count her out yet.

I am still curious about the remaining terms of these types of loans and how, if at all, they would affect her copyright ownership and the right to enforce them.  During the term of the loan, does she retain all rights to the copyrights?  Does she retain the right to enforce the copyright?  My suspicion is that Ms. Leibovitz retains her ownership and enforcement rights unless the loan goes in default.

But what other terms does the contract provide?  For example, it would seem that among the terms is the requirement that she enforce the copyrights so as to protect the value of the pledged collateral, but how much discretion does she have in deciding whether to sue a possible infringer?  Please let me know if you are familiar with the loan terms and the impact on her copyrights.

If there is a clear winner in this story, it is probably Art Capital Group because others looking to pawn their art may be more inclined to use Art Capital Group knowing that prominent artists themselves have pledged their work to it.  But, will it be a short-term winner?  Will there be a great demand to pawn expensive pieces of art when the economy bounces back and we can once again crawl out of the Stone Age?   

Happy Birthday Barbie! Things I Learned From Barbie . . .

By Dave Rein

Barbie, the iconic doll who lines the shelves of big box and mom-and-pop toy stores everywhere, celebrates her 50th birthday today.  I was more of a G.I. Joe kid growing up, but I'll be the first to admit that Barbie has done more for teaching us the ins and outs of trademark and copyright law than tough Joe ever did.

While others have used her birthday to look back at her last 50 years to ponder whether she has been a good or bad influence on generations of kids, her power in the fashion world, or the enormous amount of money collectors will pay for her, I was curious as to how she has shaped our view of intellectual property.  Frankly, it is somewhat surreal that when I stand before a judge or jury to argue a point, some of my arguments have been shaped by an unusually shapely plastic doll.

There are a staggering number of cases involving Barbie or cases that refer to Barbie in courts' opinions, but the most obvious area in which Barbie's charms have had the strongest influence is on our notion of parody for both trademark and copyright law. 

Perhaps the most well-known of these cases involved the song "Barbie Girl" and probably the only song by the group, Aqua, to hit the charts in the U.S.  YouTube, probably at MCA Records' request, no longer allows users to embed video of "Barbie Girl", but you can still watch it here.

The maker of Barbie, Mattel, was not terribly happy with a song that makes fun of Barbie and sued for trademark infringement.  The Court of Appeals noted that Aqua would likely lose if it used Barbie to mock others, but because the song makes fun of Barbie herself and the values that the group claims she represents, the First Amendment compels a different result. 

The same result occurred when Mattel challenged a photographer, Tom Forsythe, who displayed nude Barbies in not so flattering poses and situations.  His defense to a lawsuit for copyright and trademark infringement was successful because he was able to show that the use of Barbie in the photographs was fair use to parody and comment on his perception of Barbie's influence.  

Don't get the impression that Barbie has not done well in court.  Her $100 million win against Bratz  last year and a long string of other victories show that she is a formidable opponent in the courtroom. 

But, let's not dwell on the number of notches Barbie has on her stylish belt.  Instead, let's wish her a hearty "Happy Birthday!" and look forward to her future exploits in the courtroom over the next 50 years.

 

Christie's Dilemma: Sue When Buyer Refuses To Pay?

By Dave Rein

If you are an average Joe the plumber who happens to have an extra $40 million laying around to bid on an item or two at an auction and you don't pay, the auction company will sue you and will likely win.  The terms at most auction houses are such that it will probably win attorney fees as well.  But, things get a bit more complicated when the refusal to pay is done at the instigation of or has the support of the Chinese government.

I wrote about the recent legal circus surrounding two Chinese bronzes sold as part of the Yves Saint Laurent art collection that the auction house, Christie's held last week.  The latest twist is either a brilliant bit of patriotism or unvarnished commercial sabotage -- depending upon your perspective.

The winning bidder for the bronzes, Cai Mingchao, announced on Monday that it was his patriotic duty to scuttle the auction of the items and that he could not and would not pay for the bronzes.  A video clip of his announcement is found here.   As a prominent bidder of Chinese art, he was allowed to register the day of the auction.  Closer scrutiny would have shown that he was an adviser to the National Treasures Fund which is a group backed by the Chinese government to recover Chinese art.

The contract terms are clear that Christie's could bring an action to enforce the sale, it could sell to the next highest bidder and seek the difference from Mr. Mingchao, or return the bronzes to the seller and sue to recover the expected commission.  Or it could walk away.

But, if Christie's walks away, does it open itself and other auction houses to future games whenever someone decides an item should be returned even if there is no legal basis for requiring the item's return?

Jackie Chan, I get it.  You are upset that items were looted from China and there is no legal recourse.  I'm not weighing in on the moral rights China may or may not have to demand the bronzes' return.  Make your movie about a quest for stolen Chinese relics.  I, for one, will likely go and see it.

I am, however, weighing in on the legal questions.  Unless a reader can point me to some fact that I am missing, Christie's has strong legal arguments to pursue Mr. Mingchao although business concerns may weigh more heavily than the legal ones.  Will pursuing Mr. Mingchao cause Christie's a greater financial loss

Given that Christie's wants to maintain a strong presence in China and has a publicity mess on its hands, it may decide not to antagonize the Chinese government by pursuing damages against Mr. Mingchao.  China has already stated that the sale is going to have "serious affects on Christie's development in China."  Christie's does not have many other alternatives.  It could prohibit Mr. Mingchao or his own auction house from bidding in future auctions, but he could simply use an agent or a shell company to do his bidding.

One potential way that this may hurt the legal efforts to reclaim looted Chinese art is that an attorney representing an auction house or seller can cite this incident to argue that the National Treasures Fund, the Association for the Protection of Chinese Art in Europe or the Chinese government itself are simply trying to scare potential buyers and is again engaging in frivolous litigation.  The tactics that these organizations engaged in this time may encourage a future court to impose the strongest penalty available to discourage others from using the courts for what amounts to a publicity stunt.

What would you do now if you were Christie's?  Would you pursue Mr. Mingchao?  Do you think the recent events will help or hurt China's efforts to reclaim looted art?