Grossman LLP associate Maria Angela Brusco recently spoke on a panel at the Art Law Institute of the New York County Lawyers’ Association (NYCLA), focusing on the legal implications of collectors’ promises to make gifts of artworks in the future.  Below, she summarizes some key insights from the event.

In June of 2022, on the shore of Lake Michigan, a fire destroyed the lake house of hedge fund founder Matthew Halbower and his wife Julie.  Now, in a lawsuit pending in federal court, the family’s trust seeks an insurance payout for several valuable artworks destroyed in the fire, including four Monet paintings.  The case highlights the complexity of insurance disputes involving fine art.

The Grossman team has won a total victory dismissing all counterclaims in our suit on behalf of a prominent art collector against an art gallery for refusing to rescind a sale of paintings that turned out to be forgeries.

The evolution and rapid advancement of artificial intelligence (“AI”) is transforming many industries, but courts are just starting to examine how AI interacts with existing copyright law governing artistic works.  In a groundbreaking new case handed down this summer, a federal court has now ruled that an artwork wholly generated by AI is ineligible for copyright protection.

Artist Maurizio Cattelan arguably created the most talked-about work at Art Basel Miami in 2019.  But in 2020, fellow visual and conceptual artist Joe Morford sued Cattelan for copyright infringement, alleging that Cattelan’s work, Comedian—which consisted of a banana duct-taped to a wall—unfairly copies one of Morford’s creations, a piece titled Banana and Orange.  This summer, a Florida federal court rejected Morford’s claims, holding on summary judgment that the two works are not “substantially similar” enough to support an infringement claim. 

Three visual artists have sued the ultra-fast-fashion behemoth Shein for copyright infringement, alleging that Shein operates a wide-ranging scheme that relies on artificial intelligence, deliberate copyright infringement, and a hope that none of the artists will notice.

In late May, the Supreme Court issued its long-awaited decision in the case of Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith.  The case sought to provide clarity on the thorny concept of “fair use” in copyright law.  In particular, it focused on how courts should evaluate the “purpose and character” of an artist’s use of someone else’s creations, and the role of “transformativity” in that evaluation.  The resulting decision is, in some ways, limited in scope, but in other respects, it raises new questions for artists who borrow from the work of others. 

Earlier this year, we wrote about some of the NFT-related litigation working its way through courts around the country.  Recently, one of those cases culminated in a substantial win for Yuga Labs, creator of the famous “Bored Ape Yacht Club” NFT collection. 

The Second Circuit recently affirmed the dismissal of a fraud claim by a buyer who bought an artwork in 1985 and had it appraised on several occasions beginning in 2007, but did not sue until after the work was deemed inauthentic in 2018.  The case focused on the work’s exclusion from the artist’s catalogue raisonné; the appraisals all expressly noted that the work’s authenticity was only “assumed” because the painting was not in the artist’s catalogue.  The court reasoned that in light of such a disclaimer, a reasonable person should have further investigated its authenticity, and therefore the fraud claim’s two-year statute of limitations began to run at that time. 

For years now, we’ve been following the legal fallout resulting from a rancorous dispute between Russian billionaire Dmitry Rybolovlev and his onetime art dealer, Swiss businessman Yves Bouvier.  The feud has resulted in legal proceedings in multiple countries, and other art world players have become entangled in the fray as well.  In one of those spinoff disputes, Rybolovlev has sued auction house Sotheby’s, alleging that it aided Bouvier’s machinations.  Earlier this month, a federal court rejected a number of those claims, but other claims will proceed to trial unless the parties can reach a settlement in an upcoming mediation.

Almost two years ago, we shared some thoughts about the NFT market, how it might interact with the traditional art market, and what questions and issues it might raise as it develops.  Now, we are watching with interest as an early wave of NFT-related litigation begins to make its way through the courts.  In this update, we explore some of the legal disputes that are applying established law to this new context, and raising novel questions for courts to decide.

In recent weeks, the families of two different victims of Nazi persecution have filed suit in federal court, each suing a major museum over artwork taken from their ancestors during the Nazi era.  These cases continue to raise complex legal questions about the painful legacy of a brutal regime and its massive displacement of art throughout Europe during the years before, during, and after World War II.

In late 2020, after two-plus years of litigation in multiple jurisdictions and a three-day bench trial in the Southern District of New York, Grossman LLP obtained a win in a title dispute over a painting that was stolen from a major corporate art collection decades ago and replaced with a skilled forgery.  Today, the Second Circuit Court of Appeals affirmed that victory. 

In the last few years, aided by the rise of non-fungible tokens (“NFTs”), digital art has become an increasingly important part of the art market.  Now a new frontier seems to be opening up: art that is created at least in part using artificial intelligence (“AI”) technology.  Indeed, just as NFTs have crossed into the traditional art market, artists who are creating using AI are likewise being welcomed onto the art scene (for example, by gaining gallery representation).  As this trend unfolds, we art lawyers find ourselves wondering how AI art will interact with our current copyright system. 

Art is increasingly viewed as an investment asset, and in some ways, it behaves like one.  But any investment in art also has to take into account the real risk of physical damage and the legal headaches that can arise out of such damage—as one recent lawsuit reminds us.

Last week, the Supreme Court heard oral argument in the major copyright case of Warhol Foundation v. Goldsmith, which could provide a significant opinion about the "fair use" defense to copyright infringement, with wide-ranging potential implications for the art world—especially appropriation art, photography, and copyright licensing and management.  The oral arguments, however, underscore both the magnitude of the questions posed, and the odd aspects of the case’s path to the Supreme Court, which arguably complicate the Court’s ability to grapple with the already-complex issues it presents. 

A recent trial has highlighted some of the unique legal issues posed by cases that seek to apply copyright law to tattoo art.  At the center of the case is a group of tattoos on the back and arms of pro wrestler Randy Orton—tattoos which were then incorporated, without the artist’s permission, into a series of World Wrestling Entertainment video games as part of Orton’s appearance in the game.

Last month, the Grossman team prevailed in defending a prominent art dealer’s complaint against a gallery’s motion to dismiss.

A copyright infringement dispute now pending in a California federal court is raising interesting questions about how copyright applies to tattoo art—as well as some familiar questions about transformative use of photographs. 

In a major win for investors with losses totaling over $5.5 million, Grossman LLP has defeated summary judgment in a securities fraud case arising from “a Ponzi scheme built on a false promise to buy and resell tickets to high-profile events like the Broadway musical ‘Hamilton.’”