Since 2017, we’ve been following the federal lawsuit between the Andy Warhol Foundation and photographer Lynn Goldsmith.  In mid-2019, a federal judge in New York dismissed Goldsmith’s copyright infringement claims against the Foundation, ruling that a series of Warhol artworks based on an image taken by the photographer were protected as fair use.  But now, the Second Circuit Court of Appeals has reversed that decision, in an opinion that has potentially wide-reaching impacts for the Foundation, for appropriation art generally, and for anyone in the art world who is interested in the ongoing question of how courts handle the difficult concept of fair use.  

There has been a lot of buzz—okay, that’s an understatement—about NFT art lately, and it may feel confusing to those who hail from the more “traditional” art world.  Here at Grossman LLP, we’ve been intrigued by this phenomenon, and now this post aims to discuss some of the basics about NFTs and some widespread misconceptions about them.  We also offer some thoughts on how they may potentially impact the art market going forward.  

Just a few weeks ago, we wrote about some of the Supreme Court’s most significant art-related cases from 2020, and noted that we were awaiting the Court’s decision in a long-running dispute over the so-called Guelph Treasure.  In early February, the Court issued its ruling, dealing the plaintiffs, who are the heirs of a consortium of Jewish art dealers, a major blow in their attempt to seek redress for their ancestors’ loss.  

At the very end of 2020, Congress enacted new legislation that will provide a streamlined process for adjudicating small-claim copyright infringement cases.  The Copyright Alternative in Small-Claims Enforcement Act of 2020 (the “CASE Act”), included as part of the COVID-19 Relief Bill, establishes a new Copyright Claims Board (“CCB”) to oversee claims of copyright infringement that do not exceed $30,000.  Some see this is an efficient solution for those seeking to adjudicate minor copyright disputes, while others view this legislation as a potential avenue for attacks on everyday internet users who may lack the resources to track and opt out of these proceedings.

As we leave 2020 behind, we’ve put together a brief update on some of the Supreme Court’s most significant 2020 decisions that have implications for the art world, as well as a couple of cases that have been argued but not yet decided.

At the beginning of the year, Grossman LLP achieved a summary-judgment victory on behalf of a Manhattan gallery in a title dispute concerning an Alexander Calder stabile. On December 15, 2020, Judd Grossman argued the appeal in the U.S. Court of Appeals for the Second Circuit, and on December 23, the Court issued a decision affirming summary judgment in the gallery’s favor.

A painting by an American modernist artist that was stolen from a major corporate art collection over thirty-years ago and replaced with a skilled forgery will be returning home after more than two years of litigation.  

​At the conclusion of oral argument on December 2, 2020, Commercial Division Justice O. Peter Sherwood upheld Plaintiff Contrasto’s breach-of-contract claims by denying Defendant James Nachtwey’s motion to dismiss the complaint. 

Over the last few years, we’ve been following legal developments involving a rash of apparently forged Old Master paintings that have been discovered on the European art market.  This month, one litigant has indicated its intent to appeal a UK court’s decision regarding who should bear the brunt of the financial fallout from one of those fakes.

Last month, this blog wrote about several forfeiture complaints recently filed by the United States Department of Justice seeking to recover the illicit proceeds of the 1MDB scandal.  The complaints sought, among other things, the recovery of several high value works of art that had allegedly been used to launder the misappropriated 1MDB funds.  We noted that “[t]hese forfeiture complaints serve as a reminder that high-end art transactions are often viewed by white collar criminals as an effective method of money laundering.”  And now, a recently-released Senate report shows that Congress is taking these concerns very seriously and may soon take up legislation cracking down on money laundering in the art world. 

A recently filed lawsuit by the artist Pat Lipsky highlights an often-overlooked risk for New York galleries and auction houses exhibiting works online:  running afoul of New York’s Artist’s Authorship Rights Act (“AARA”).  That law—a precursor to the federal Visual Artists Rights Act (“VARA”) of 1990—gives artists in New York the legal right to claim or disclaim authorship of a work of art, and object to its display, publication or reproduction in an altered, defaced, mutilated, or modified form that could damage the artist’s reputation.  Unlike VARA, AARA protects not just the artist’s interests in the work itself, but also any reproductions of the work, even if no physical change has been made to the original work.

An ongoing challenge for art dealers, galleries, and auction houses, is guarding against the use of art transactions as a means of laundering the proceeds of criminal activity.  Money laundering is a federal crime that involves disguising the proceeds of a crime by integrating those proceeds into the legitimate financial system, often through a series of complex and confusing transactions designed to conceal the origin, source and ownership of the funds.  When money laundering is successful, it becomes difficult to distinguish illicit proceeds from legitimate financial resources, thus permitting funds to be used by criminals without detection.  Purchasing art is one way to conceal the source of illicit funds.  Several recently filed civil forfeiture complaints from the U.S. Department of Justice highlight the ongoing need to remain vigilant about money laundering in the context of art transactions.

This blog has written before about acclaimed conceptual artist Cady Noland, who has a reputation for being particular about how her works are installed, maintained, exhibited, and sold.  As our previous posts explain, she has even, on more than one occasion, disavowed an artwork she created, prompting litigation.  Now, a federal judge has issued a ruling in Noland’s most recent legal skirmish, dismissing her attempt to bring copyright infringement claims related to the restoration of one of her artworks.

Since the outbreak of COVID-19 and the ensuing restrictions on businesses, there has been much discussion about whether, when, and how commercial tenants can break their leases or be relieved from rent-payment obligations when they are unable to conduct business on leased premises.  Last week, a Manhattan art gallery sued its landlord for declaring a default under the lease when the gallery failed to make its April rent payment, arguing that the lease was lawfully terminated on April 1 in light of the executive orders that restrict the operation of New York’s non-essential businesses.  

Abstract artist Howardena Pindell has sued several individuals and entities related to the G.R. N’Namdi Galleries, which, beginning in the late 1980s, represented her work in spaces located in Detroit, Chicago, New York, and Miami.  The case raises a host of legal issues that are, unfortunately, all too common in the realm of artist-gallery relationships.

This week, Grossman LLP notched an initial victory on behalf of its client, art advisor Susan Seidel, who is in litigation with art collector and Universal Studios executive Ronald Meyer over a 2001 art deal.  The Manhattan-based team, aided by its California local counsel, persuaded a federal judge that the lawsuit should proceed in New York, not in Meyer’s chosen forum of California.  The ruling is a reminder that the question of where an art dispute should be litigated can be an important one, and that a plaintiff’s preference may not always prevail.

A recent trademark decision in the Southern District of New York has extended First Amendment protections generally reserved for works of art to the popular video game  “Call of Duty.”  Analyzing video games as expressive works for purposes of federal trademark claims has widespread legal implications for video game manufacturers and distributors, allowing them an important shield against allegations of trademark infringement.

Amidst the social and economic fallout of the COVID-19 pandemic, the Association of Art Museum Directors (AAMD) has temporarily revised the guidelines it imposes on its members.  Recognizing that museums (like many other art-related businesses) are struggling to stay afloat, the AAMD is easing certain restrictions on the use of trusts, donations, and gains from endowment investments, and on the use of proceeds from deaccessioning artworks.  

Netflix’s “Tiger King” has become one of the streaming service’s most popular series in the last few weeks, documenting the years-long fight between Joe Exotic (né Schreibvogel), the self-proclaimed “Tiger King,” and Carole Baskin, founder and CEO of Big Cat Rescue Corp. (“Big Cat Rescue”).  The feud led to three separate intellectual-property lawsuits that bankrupted Exotic and serve as a cautionary tale as to how competitive antics can have severe legal consequences.

A recent federal court decision provides some insight into how U.S. copyright law might apply to the unique medium of tattoo art.