Saturday, May 23, 2015

Should Art Authenticators Get Insurance?

Ronald Spencer discusses insurance as protection for art experts in the most recent issue of Spencer’s Art Law Journal, published on artnet news.  As experts increasingly face the risk of expensive litigation when offering opinions on the authenticity of artworks, and therefore are reluctant to give firm authentication statements, insurance may offset this risk and encourage experts to render opinions. Professional liability insurance for art experts, now offered by the College Art Association,  often includes coverage for attorney’s fees, which can amount to a significant burden for solo authenticators and independent art scholars in a legal dispute.

However, insurers have found art authentication activities challenging to assess.  The subjective and complex visual perceptions which often form the basis for an authentication opinion do not neatly conform to the standards used by insurance underwriters to evaluate risk.  Insurers usually require formal, standardized procedures: each expert’s methods should be reviewed and recorded, and the expert must follow these methods as a condition of coverage, though general descriptions of the basis of an opinion often suffice.

The umbrella term for this type of coverage also fails to fit this type of service. Insurers use the technical definition of “professional services” as work performed for a fee, but the fee charged for an authentication opinion rarely reflects liability risk. In response, Spencer proposes that experts charge a fee, even if nominal, and include the cost of the insurance in the fee.

More via artnet news.


Deaccessioning Europe

A new post on the long dormant Deaccessioning Blog.  As Europe faces the financial effects of the recession, many countries have turned to the trove of artworks in state-owned museums for funds.

More via The Deaccessioning Blog and The New York Times.


Gardner Heist Thieves Named by the FBI

According to Breitbart News, this month, the FBI has confirmed the identities of the thieves who robbed 13 paintings from the Isabella Stewart Gardner Museum in Boston in 1990. Breitbart News reports that law-enforcement sources have identified two career criminals, George Reissfelder and Lenny DiMuzio, as the perpetrators. Both men died within a year of the crime. Reissfelder was a career criminal who was convicted of murdering a guard during a robbery in 1966, but current Secretary of State John Kerry, who was appointed to represent Reissfelder in 1982, was able to get the conviction overturned. After being set free, Reissfelder got involved with a local group of burglars, armed robbers, home invaders and murderers headed by a man named Carmelo Merlino. One of the members of the group was DiMuzio. Sources revealed to Breitbart News that they believe Merlino set up the Gardner heist for Reissfelder and DiMuzio. Merlino was convicted of robbery and died in federal prison of diabetes in 2005.

The missing artworks have never been found, despite a $5 million reward offered by the museum for their return. Included among the stolen works were a Manet, three Rembrandts and The Concert by Vermeer, currently estimated at $250 million. Though investigators have pursued other individuals linked to Merlino who may have had knowledge of their whereabouts, the works have not been located, despite the difficulty of selling such famous masterpieces on the black market.

More via Breitbart News and The New York Times. Thank you Blaise Niosi for the heads up.


Case Dismissed: Collector/Gallery Dispute

A new article released by the Frankfurt Kurnit Art Law Group discusses the recent dismissal of McKenzie v. Fishko, a case brought by Richard F. McKenzie and his foundation against his dealer, Forum Gallery, and its director, Bella Fishko, (collectively “the gallery”) for breach of contract, fraud, and breach of fiduciary duty.  McKenzie purchased over 100 artworks through the gallery based on two oral agreements: one for a 5% commission on purchases at the “best possible price” of artworks by artists not represented by the gallery, and another for a 20% discount on purchases of artists represented by the gallery (primary market sales) where the gallery would act as McKenzie’s agent.

In 2011, McKenzie learned that the gallery may have been artificially inflating the price of artworks he had purchased to eliminate any “discount” and also that the gallery may have earned secret profits by misrepresenting whether a  work was purchased from another collector through the gallery or from the gallery itself.  However, on February 24, 2015, a New York federal judge found for the gallery, dismissing all of McKenzie’s claims because of a lack of evidence aside from McKenzie’s own testimony.

Frankfurt Kurnit asserts that this case follows a trend in the courts in which the burden of due diligence falls on buyers regarding the market value of artworks, especially in the absence of a written agreement. Galleries do not owe a fiduciary duty to collectors despite a long-standing relationship, unlike that owed to artists who consign their works to galleries as established under the New York Art and Cultural Affairs Law. This case emphasizes the importance of memorializing agreements between collectors and galleries.

More via Frankfurt Kurnit.


Copyright for 3D Scans

Sketchfab has published an article discussing copyright law as applied to 3D printing and scans. Public domain artworks and their replicas legally can be scanned and those scans shared based on a 1999 district court case involving photographic reproductions of public domain artworks. These scans and any models or prints made from the scans can be sold commercially because there is no copyright in the original works or in their replicas.  The scans also do not qualify for copyright because they have been considered insufficiently original by the 10th Circuit.

However, any specific improvements or changes to the original scan or any creative additions to the scan, which are substantial and can be separated from the scan itself, may be copyrightable. The copyright would be limited to the modifications or additions. Any protection for the scan may be accomplished through contract.

More via Sketchfab.


Munich Court Rejects Cousin’s Inheritance Claims to Gurlitt Collection

The trove of over 1,000 artworks, originally collected for a museum planned by Hitler, was discovered in a Munich apartment during a tax investigation in 2012. Cornelius Gurlitt, a reclusive art collector who died in May 2014, had willed the works to Kunstmuseum Bern in Switzerland. However, a cousin of Gurlitt, Uta Werner, filed a lawsuit to block the transfer of the artworks to the museum. This week, a German court rejected the suit.  As reported by the New York Times,

In a statement in German released on its website on Thursday, the Munich court said:  “The decision finds Cornelius Gurlitt’s will, in which he names the Kunstmuseum Bern as sole heir, valid. The decision dismisses the claim made by his cousin that the testator Cornelius Gurlitt was incapable of making a will at the time of signing.”

Via ARTnews.


Changes in UK Copyright Law May Affect Artists


Copyright statute during the reign of Anne, Queen of England, Scotland and Ireland from 1702-1707 and Queen of Great Britain and Ireland from 1707-1714.

Eileen Kinsella reports for artnet News on recent changes in British copyright law affecting artists, museums, art publishers, and curators. The new provisions of the Copyright, Designs and Patents Act 1988 (“CDPA”), which go into effect in 2020, affect copyright protection of mass-manufactured artistic works.  This class of works, which would include images of artworks printed in art books or on museum promotional goods, was previously treated differently in UK copyright law than artistic works which had not been copied by an industrial process.  The change extends a series of reforms in UK law in recent years as governments struggle with intellectual property in the context of the Internet.

Section 52 of the CDPA, titled “Effect of exploitation of design derived from artistic work,” previously limited copyright protection for industrially manufactured artistic works to a term of 25 years after its manufacture.  The new provisions repeal this term, extending the copyright term for such works to 70 years following the death of the author, the duration of copyright in artistic works generally.  The law will apply retroactively, so images that had been open for such use, those with expired rights (images created by artists 25 years ago) may again be protected if the artist is still alive or died less than 70 years ago. Any goods produced and sold with such images would constitute a violation of the CDPA unless a license were obtained, which, as Kinsella explains, could be prohibitively expensive.

The more troublesome issue is the penalty for such a violation. The 1988 version of the CDPA made physical copyright infringement a criminal offense punishable by a prison term; in 2002, the maximum prison term was extended to 10 years, and in 2010, the maximum fine for such offenses was increased to £50,000. In 2014, a new Intellectual Property Act extended the criminalization of copyright to registered designs (discussed in detail here and here).  In fact, these laws follows a long precedent in the UK of criminal sanctions for copyright infringement. World Trademark Review reported, “[c]riminal provisions have been in place for copyright infringement since 1864 and for trademark infringement since 1994,” Dids Macdonald, CEO of advocacy group Anti Copying In Design (ACID).

By reducing the copyright term of industrially manufactured artistic works, goods produced and sold with artistic images that infringe on the extended copyright may subject museums, galleries or art publishers to these criminal sanctions. Section 107 of the CDPA outlines the offences subject to the maximum penalty, which may also include an artist who attempts to sell an artwork which appropriates a copyrighted image (§107(1)(a)).  Such criminal liability may indeed cause the chilling effect the law usually attempts to avoid.


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