Art + Law + Blog : Art Law Lawyer & Attorney : Bryan Cave Law Firm : Chicago IL Consignment & Art Dealer Agreements

@Carnegie Museum of Art, Pittsburgh.  Visitors to the Sinclair Oil Company dinosaur exhibit at the 1933-34 Chicago World’s Fair.

How this can happen.
The issue is not about posting pictures online; it’s about access. Our artist thought she was protected. She, like many artists, uploaded many of her photographs into an account she had with one of the many picture hosting websites, and she had a creative commons license for pictures on that website. The problem arose when she set up her account so pictures she posted would also automatically post to her profile on a social networking site. Although the creative commons license covered the pictures on the first site, her privacy settings allowed advertisers access to the photos when they posted on her profile.

Tailored Advertising.
In order to make advertisements more tailored to an individual user, social networking sites are utilizing user’s photos to help promote sites, companies, etc. to that user’s friends. In addition, third party advertisers are also gaining access through applications and using photos for their ads (an activity social networking sites claim violates their policies).

Should I run to a computer and change my settings?
Maybe, but not necessarily. The catch is that the default settings can be different sites can be different, even within the same site. For example, social networking sites may require that you affirmatively give a third party access to your profile when you download an application. That same site, though, may have a default setting which gives it open access to your photos (search "social media privacy settings" to find a lot of information on the difference between the two). Therefore, you should understand the privacy options and defaults for any site on which you post your works.

But, whether you want your pictures used depends on your circumstances. On one hand, you may risk giving up control of your work. What right you give an advertiser depends on how the privacy settings are worded. This is especially true for applications which often grant access and possible use of your entire profile. Often, you have no say in what companies may use your works or in what way, and you may not even know who the companies are (especially for access through applications). As our photographer found, she had never heard of the company that was using her photograph. If you have an established portfolio, these uses may also dilute your works’ reputation and could lead to a reduction in the price people are willing to pay for your works.

On the other hand, this may give your works greater exposure. After all, any publicity is good publicity, especially for an up and coming artist. Our photographer found out about the use because a friend was impressed how a company had picked up her photograph. Plus, some companies are willing to negotiate usage rights if the photograph is a good fit for their ads.

Copyright Can Be Big or Small.
You can get a copyright for your original work of authorship. But, your copyright (i.e. just what it covers) can be bigger or smaller depending on how much of your work is original to you.

What Exactly Is Infringement?
The "right" in copyright entitles you to keep someone from infringing your copyright. I infringe your copyright when I copy your work, plain and simple.

But, as we already covered, your copyright only covers the list of original elements you add. So, you can stop me only from taking those elements. Putting it all together, your copyright prevents me (or anyone) from copying the original elements you add to something.

Don’t forget, though, when you are creating a work, you infringe if you use original elements someone else created (assuming they have a copyright).

Your Day in Court
If you sue me for copying your work, the court will probably follow this same idea. It will make a list of your original elements and see how many of those elements appear in the supposedly copied work. Although this is full of case-by-case issues, the basic idea is: the higher the percent of shared elements, the better your case against me.

Infringing a Nature-Based Work
When it comes to enforcing your copyright in a court, nature-based works are a double-edged sword. As we discussed before in Pitfall No. 1, your original elements list will be shorter because many aspects of the work come from mother nature herself. Her work cannot be original to you. This is good because, the shorter list, the fewer the things you have to show appear in the copied work. On the other hand, you can only claim protection over that same small list, so, if those elements aren’t clearly in the second work, you will have a tougher time proving infringement.

Protecting for Nature-Based Works
An artist whose work is based on nature is often left with a neutered protection, but not always.

Consider this. Once upon a time there were two plush toy manufacturers (Coquico v. Identiko, Case No. 07-2786, issued April 6, 2009, First Circuit Court of Appeals). The first, named Coquico, made a stuffed animal that looked like a coqui, a small brown frog popular in Puerto Rico. An artist who worked with Coquico, though, grew unhappy with his job and left. Shortly thereafter, that artist’s new company, Identiko, began to make a stuffed animal that looked like a coqui. Both Coquico and Identiko prided themselves on the anatomical and natural correctness of their dolls, but each added unique elements. Coquico added a recreation of the Puerto Rican flag on the frog’s belly and a brass ring. Coincidentally, when Identiko began selling their frogs, they also had a Puerto Rican flag on their bellies and a brass ring.

                                             
So, how would a court view these dolls? To the naked eye, the frogs appear similar because they both look like actual coqui frogs. But, through the copyright lens, the frogs are similar because they have the same elements that show "artistic and original decision" (i.e. original elements). Coquico can’t protect elements it took from nature, so its original elements are the flag and the ring. So, as the court said in its opinion, since Coquico added these elements first and both frog dolls had them, the ex-employee artist infringed Coquico’s copyright.

Putting This into Practice
While it’s good to know the extent of what you can protect (see Pitfall No. 1), there are steps you can take:

• Carefully think about what could be considered your original elements.
• If you find a similar work that was made before yours, make sure you have additional original elements and think about removing their original elements.
• Keep an eye on people who had access to your works and development processes.

These tips may help you protect your work and avoid infringing someone else’s copyright.

But, there are things people can do to narrow the risk.

1. Get A Contract. When people give possession of art to anyone – even their mothers – they often write a contract. In the contract, people often identity (a) the work; (b) the reason to give possession of the art; (c) the conditions of selling the work - for instance, a minimum sale price or a minimum amount paid to the owner; (d) who is responsible for safekeeping and insuring the work; and (e) a grant of a security interest.

2. Pick the Right Dealer. People often do a little research on the art dealer before they sign the contract, looking for a pattern of lawsuits or complaints.

3. Get Own Art Insurance. Art collectors often get their own insurance, even if their art dealers are also covered. This allows collectors a second recourse if they get swindled or the work gets damaged and the dealer’s insurance proves to be inadequate.

4. Get a Right to Status Reports. Some people demand that the art dealer keep the art owner informed on the whereabouts of the art.

5. Check Up. Nothing beats continuing vigilance. Periodically check up on an art dealer, visiting their works and asking for reports of sales activity. Just showing energy and attention could make the difference in how an art dealer does business.

Most art dealers are honest, ethical, professional and dedicated business people who will take good care of you and your art – only a small minority are not. The value of art, and the presence of bad apples mixed in with the good, means we often need to take precautions. This is not always easy. A gallery owner may identify a request for a contract and protections as an inaccurate accusation of dishonesty. A gallery owner may also claim that contracts are time consuming, expensive and rarely needed. Both claims are correct.

Most of the time, the dealer can be trusted, the contract is too expensive and too long and the parties never pull it out of the file once signed. But, we take these precautions for the moments when the gallery owner is a fraud, the contract had just what you needed and it acts as your sword in the fight with the gallery.

Doing business on a handshake is essentially a bet in favor of the gallery owner’s integrity. When you bet wrong, you lose, not just money, but an irreplaceable work of art and piece of mind. How you proceed is up to you.

Coco: Can you describe your profession?

 Claire: Well, I have just started my own business called the Haven Art Group. We adjust art claims and also provide art management services to see if we can help people avoid having loss or damage to their art collection in the first place. You could call us curators for hire.

 Coco: And why do you focus your career around art?

Claire: When I was struggling to decide what to read at University, I went to my mother for advice. I asked her why she had chosen to read Spanish, and I told her that I had no idea what I wanted to do for a living. Her answer was very simple. She said, "forget careers. Your job at University is to learn how to think. Just that. So you better study your favorite subject because if you don't, not only will you not learn how to think well, but you will be absolutely sick of whatever it is after three years." And I have not been able to stop thinking about art ever since.

Coco: What past jobs taught you the most and what did they teach you?

Claire: That is a tough question Coco. It is a very long time since my first job at Sotheby's in London, but I would say that the most important thing I got out of that experience was developing a good eye. That, and learning how to let people down gently - so many grizzly portraits found in English attics that, frankly, should have stayed buried because they will never be bought by anyone who is not directly related to the sitter. I am fiercely proud of being British, but we are not a beautiful people I'm afraid. And since then? I would say that I probably learnt the most in my most recent job as head of art services for the US and Europe for a large insurance company. We had to evacuate pictures as wildfires descended or save them in the aftermath of hurricane devastation. It was a terrifically steep learning curve for the first couple of years and tremendously rewarding to help people save entire collections for their families and for the future.

Coco: What 5 things can I do to protect my art?

Claire: Ok, one of the things my firm does is to map out the exposures surrounding a collection, and then suggest ways to close down the gaps in the protection program. And the first exposures we always rate are the top five causes of art loss - fire, water, theft, transit and bad curatorial management.

 So here are five basic checks everyone can make for these five exposures:

1. Early fire detection is the key to avoiding a total, rather than a partial art loss. Do you have heat detectors in your kitchen, in your roof space, in your mechanical rooms and in your garage? These are the most common areas for a fire to start.

2. No art or fine furniture in the basement please. Not until Illinois and New York replace all of their Victorian drains.

3. Following any sort of major renovation or build out to your home, have the locks changed. It is unlikely your contractor will have had time to do background checks on every sub contractor he used.

4. If you are using an art shuttle to transport works you have recently purchased, check that there is no cross docking on route and ask for last on first off priority for your crate.

5. Check the traffic flows in your home. Are there fragile pieces in the same corridor that your deliveries come into or where your children play? Can you swap out three dimensional for two dimensional pieces, unframed contemporary canvases for those with a small slip frame protection? This will reduce surface scratching and gradual erosion at corners.

Coco: What 2 things must I do to protect my art?

Claire: First, put a transit protocol in place because most shipping losses are entirely preventable. A good transit protocol should have one person overseeing the shipment from nail to nail and testing arrangements for every step where a piece changes hands or they think a loss could occur. We have failed as custodians if a work is damaged in transit because it was cheaper to send it by UPS. They are not expecting you to use them for your fine and fragile works of art. Second, without proper documentation, pieces go missing over time; you can't secure insurance to the full value and provenance and authentication issues go unnoticed until the time of sale. Ask an art professional to assess your current papers and give you advice on getting an inventory because regardless of the physical protection in place it is critical to get independent, objective advice on the financial protection of your assets, and good documentation is the first step.

Coco: Who are your favorite artists?

Claire: Poussin, Ben Nicholson, Durer, Ken Price, and the fabulous Steffen Dam.

Coco: Your Website?

Claire: Is currently under construction. Great things come to those who wait.

Coco: Your contact info?

Claire: Keen bloggers are welcome to email questions to my Hotmail account at clairemarmion@hotmail.com. All other enquiries can be directed to the Haven Art Group at 312 375 3807.

The Focus on Originality
You can only copyright something that is an original work of authorship. In understanding this, two issues are simple: 

• A "work" is a single expression of an idea (and not an idea itself).
• "Authorship" means you thought up the work.

So, the crux is "originality", requiring that the artist added something from his or her own mind (which, then cannot be copied).

Originality in Nature-Based Works
Most of the time, depictions of nature can’t be copyrighted. That is because the law (i.e. society) says that nature is not artistically your own. Only the part of the artistic work that sets nature apart from the way you found it is copyrightable (for instance, your arrangement, positioning, shading, unique coloring, etc.).

Some examples:

• A candle company places cinnamon sticks on the front of a box of cinnamon-scented gifts (Yankee Candle v. Bridgewater Candle, 259 F.3d 25 (1st Cir. 2001)). The company can’t gain protection over putting cinnamon sticks on a gift box because cinnamon sticks are a natural thing. But, the company can get protection over the placement of the cinnamon sticks in a specific pattern and the shading, light source and placement on the box because those were arrangement-based and, thus, original elements.
• A photographer takes a shot of a ballerina’s legs in fifth position (Edwards v. Ruffner, 623 F.Supp. 511 (D.N.Y. 1985)). The photographer can’t get protection over a photograph of a dancer’s legs in fifth position (even if another photographer admits to seeing the photo and using it as inspiration for a similar photo) because even the idea of dancers legs in fifth position is not an original element. But, the photographer may get protection over the angle of the shot, amount of the legs showing, clothing style and background, particularly if there is some unique element to them (like intentionally ripped leg warmers or oddly colored ballet slippers).
   

Putting This into Practice
Drawing from nature is a wonderful start many artists have used to initiate the beginnings of great work. While protections are available, they will likely extend only over those additions. You cannot "corner the market" in making true-to-nature depictions of an idea. So, the trick for the artist, in life and in law, is to add something new.

The story behind this re-fashioned hypothetical can be found here. 

In March of 2009, Yale attempted to pre-empt a lawsuit by a decedant of Ivan Morozov, who is referred to here by TIME critic Richard Lacayo as "one of the two outstanding Russian collectors and patrons of modern art early in the 20th century," claiming Yale wrongfully acquired Van Gogh's "The Night Cafe" in the 1930's.  The crux of the argument suggests that the nationalization of property after the Russian Civil War was unlawful, and Yale's claim to title after the work was purchased by the eventual donor from the Russian government amounts to "art laundering."  Morozov's decendant, Pierre Kanowaloff, in late May filed a counterclaim in the suit alleging Yale's acquisition of the painting lacked good faith.

Yale takes the approach that the donor's purchase from the Russian government was legal, and Yale's acceptance of the gift equally so.  Moreover, Yale argues museums across the globe hold works of art previously nationalized by the Russian government in the early 1900's, and that sales by the Russian government of such works are generally considered valid.

And the money quote:  Yale feels it is not the place for American courts to "undo the entire program of property reform" which took place in early twentieth century Russia.

The result of this case may have reaching effects for many collections.  Stay tuned.

Yale University v. Konowaloff, 3:2009cv00466, U.S. District Court, District of Connecticut (New Haven).

I do not intend to come off too flip here.  My point is simply to recognize the fact that despite its charms, many commentators have noted that VARA is limited.  One must rember too that VARA, while a victory, was expressly a compromise.  The "moral rights" enjoyed outside of the United States are greater than those protected under VARA - which took pains to limit the rights granted by the Berne Convention.  The clear disconnect between the artist's expectations for VARA and the few court decisions on the subject seem to suggest no battle is likely to be won very easily.

Keeping all of this in mind, if being able to pull one's name from an altered work or being able to carry the sword of injunction or damages to prevent or punish the intentional mutilation of a work (in general terms the primary rights enjoyed for certain works of art under VARA), get it in writing as a part of the installment or commission agreement.  At the stage of the game where artists and patrons meet, it is unlikely the patron is looking to tell the artist outfront that it has an interest in altering the work in such a way that the artist would be harmed.  And if the patron wants this ability, it's better to find a price for it at the front end than in the courts.

One would hope Mr. Fairey would be a little more careful with his language. The legal equivalent of "he started it" may sound great when arguing about the case over a pint, but to even suggest that the AP might need to obtain a license before publishing reproductions of artists’ works in news stories could create bigger problems for artists going forward than having to incorporate phone calls, royalties and paperwork when meddling with appropriation art should Fairey lose this case. When nobody is making any money producing news these days, it’s hard to justify transaction costs in covering arts stories if your lead-in image requires clearance.

Now in full disclosure, for dramatic effect I’ve not been completely honest with my analysis. Fairey’s real gripe is not with any newspaper taking a picture of a work of art and using it in a story about the work, but with the AP’s licensing of those pictures to other publications without artist permission. And the AP doesn’t lack for chutzpah – in March, the Fairey document notes, the AP marketed their photograph licensing database by including a photo of Fairey’s mural-sized painting in the same theme (appropriately titled the "Obama Hope Mural") on the database 's homepage!

So why exactly is this language blog-worthy? Unlike how some headlines may have interpreted this statement, Fairey’s legal team isn’t exactly asserting an infringement. Fairey is defending the AP’s counterclaim of infringement by using an age old equitable maxim – one who comes into equity must come with clean hands. For those who aren’t wearing powdered wigs, Fairey is saying that since the AP does a certain type of bad thing, they can’t turn around and sue someone else for doing the same type of bad thing.

Of course, if this was an infringement count, the AP might assert their own "fair use" defense – that their use for "news reporting" (specifically singled out as a likely candidate for a fair use claim by the fair use statute itself) is "clean" even without requesting permission. As if this case weren’t already full of them, the argument begs even more questions testing the limits of fair use: Assuming it would be a fair use to take and publish a photograph of a work of art for a single news story, would it be a fair use to license that same fair photo?

10 years ago one would be pretty frightened for local media everywhere if the answer was "No" and the AP started building in the costs of clearing all of their own photos before licensing them outward (or simply choosing not to license photos that carried infringement risk). However, when everyone with a cell phone is a free-lance journalist and photographer, the loss of the AP’s "public service" in making its content available to local press (to the extent there is any left) would seem the least of an editor’s worries right now.

Since the days of El Prado’s and its contemporaries’ infancy, the "museum" (or so I was taught in an art history class long, long ago) was a place where the masses could gaze upon great cultural artifacts and works that only the aristocracy before them were able to take such pleasures. Opening MoMA’s doors to those outside of the Big Apple so that they may experience – and I use that word lightly – works of modern art certainly carries this "democratic" ring.

However, might there be a value-eroding effect of supplanting MoMA’s mystique by injecting consumer-in-training exercises such as "collecting" works, building a "profile," developing cell phone text-logs and twittering away commentary? MoMA’s efforts here will simply mash against the cluttered array of Facebooks, YouTubes and online shopping malls already available. Conventional wisdom says this is a good thing, and perhaps it is. But since this is a blog written by lawyers, allow me to play the Devil’s Advocate.

Must every institution’s Web site cater to all things interactive? Or might I suggest, in some respects, they should consider positioning themselves as a point of departure or enticement, rather than too much of a virtual substitute? A little skin can go a long way, but too much and "provocative" becomes "pornographic."

Marketing philosophies aside, a museum and its works still exist in the real world – or what’s left of it. An artist’s choice of medium is purposeful, and while web approximations may be useful for illustration, they certainly cannot capture the artist’s expression.

Which is truly what this bit of waxing is all about? Where art, truly "art" the likes of which may be found at MoMA, exist to express the world around it; these "democratic" widgets exist only to express the user. There may be much to praise in this, particularly where incorporated into industries such as music and television which have for too long attempted to define the user through its marketing of products rather than have the user define what such industries produce. However, one would hope an institution with the singular mission of preserving and promoting valuable expression would do what it could to adapt to modern ways without having to play lap-dog to the cacophony of vacant, self(ish)-expression that has become Web 2.0’s unfortunate side-effect.

**Full disclosure, this blog post has been written by an author currently under the influence of Lee Siegel’s, Against the Machine: Being Human in the Age of the Electronic Mob. If you would rather not rethink everything you love about the Internet and popular art, please do not read this book.

Here are a few things to think about if you want to monetize your art and keep it too.

Paperwork. Make sure insurance, appraisal and provenance documentation is up-to-date. To protect their interest in the collateral and protect against fraud, lenders take several steps, including:

- requiring recent appraisals from approved appraisers or auction houses (which often include evidence of provenance),

- being named on the borrower's insurance policy (in case the collateral is stolen or damaged), and

- UCC filings (to put other potential lenders on notice that the collateral is encumbered).

What Counts. Lenders active in this market typically make loans against specific works, multiple works, or a whole collections. And, not just works of fine art – we have also helped people borrow against books, maps and antiquities. Not every bank will lend against art, but those that do usually offer a variety of financing options, including term loans (which become due on a specific date) and revolving loans or lines of credit (which allow money to be paid back and reborrowed during the life of the loan). The amount of the loan varies but is usually somewhere between 45-60% of the market value of the collateral.

Keep Possession If You Can. Often, the art owner can keep the art on the wall or the pedestal, as long as restrictions are followed limiting when a work can be moved (e.g., only following prior approval), where it can be moved (only to approved locations - usually domestic, but sometimes to galleries or museums), and how it can be moved (only in approved manners). When a borrower is up-front and clear what they want to do with their art, lenders can often make accommodations.

More Common Than You’d Think. Of course, like all secured debt, the bank will insist on a filing with the state under the Uniform Commercial Code. Some borrowers are particularly sensitive to public filings that show they have used their art as collateral, however, there are ways to avoid including individuals names in the filings and most lenders will work with a borrower if this is a particular concern. One banker we've worked with confided that while borrowers are sometimes afraid of what their peers would think, they'd be surprised to find out how many of their peers are have already done exactly the same thing.

The Fundamentals of Copyright
Copyright protects the creator of a work by embedding exclusive rights to copy, sell, show and change the work within the work itself. However, copyright protects the rest of the world by placing temporal and discursive limits on those exclusive rights, allowing for improvements, academic dissemination and comment that may come later. For example, only you can make posters from your 1999 sculpture of a bowl of mangoes, but I can publish that poster to illustrate my contention that mangoes were a popular artistic subject in 1999. And, 70 years after your untimely death, I can sell those posters for my own account.

In spite of copyright’s long history, few people, including artists (and some lawyers), are clear on when an artist can use another’s work and still not be liable. Comments on the Web following Luxenburg's victory revealed a persistent (and erroneous) belief that you can use another’s artistic creation as long as you use less than 30 percent of it.

Here is the general rule: Use of all or any part of someone else’s copyrighted work constitutes copyright infringement. This includes copying and making derivative works from another’s work, as well as distributing, displaying and selling someone else’s work.

Translation: A work is "copied" if it was made using the original as a "model, template or even inspiration," or if the new work shows a substantial similarity to the old work and the artist had access to the old work. Judges also frequently regard "substantial similarity" as an indication of an impermissible copy, so if a new work includes copyrightable elements from an original work, and not merely ideas, then it may be infringing on that copyright. For instance, George Harrison’s "My Sweet Lord" was found to infringe on the Chiffons’ "He’s So Fine" because of an overlap of three notes.

Similarly, any transformation of an original work into a new work can be considered a "derivative work."

The bottom line is that when appropriating content, you clearly make a copy. If you copy a protected element of the original work, you make an infringing copy. If you transform those protected elements in some way, you either 1) create an infringing derivative work, or 2) qualify for Fair Use. An artist who claims his or her copyright of another’s work is "proper" is using the defense of Fair Use. If the argument is valid, the artist may not have committed legally "improper appropriation," even against a strong rights holder. This is where things get tricky.

Fair Use (The Muddy Waters of Copyright)
Fair Use is a very narrow exception to a very broad rule. Fair Use extends the exclusive rights in copyright to a third party — but only for specific purposes, along a tight continuum. An otherwise infringing use moves along that continuum depending on the following four factors, none of which are controlling:

•  If the artist intended to sell the copy or derivative work, then that pushes the copying against the argument of Fair Use. However, even if the purpose is more than nakedly commercial — such as a purpose to otherwise "transform" the work for criticism, teaching or scholarship — it will not end the dispute. Nor does the hope of profiting from the work automatically mean it does not qualify for fair use, if, in fact, the balance of factors favor Fair Use.
   
• A strong copyright in the work copied pushes against the argument of Fair Use, particularly if it is a classic form of art — a song, a painting, a photo. However, again, if, in light of the other factors, a sound Fair Use claim is made, the strong copyright protection will not, by itself, destroy the Fair Use claim. 
   
• A use that was only enough to fulfill the artist’s intention pushes the use toward the argument of Fair Use. Too much appropriation for the artist’s purpose pushes against Fair Use. For example, in order to "criticize" a literary work, a critic may need to quote enough of the work so that the audience will recognize what is being critiqued. In some cases, a critic may be allowed to quote many passages if it’s necessary to convey the point. In others, the critique may only justify quoting a few passages. 
   
• If the copy or use would compete with the original in the marketplace, that is a clear indication that the use is not a fair one, pushing against the argument of Fair Use. Part of this analysis relies on whether a buyer could choose the copy over the original, or whether the original creator is capable of capturing the market of the derivative work.

The avenues these factors can create are winding. They are considered as a whole, with each factor pushing and pulling the other toward and away from Fair Use.

There are examples of cases that show how confusing the debate of Fair Use can be. For instance, the rap group 2 Live Crew made a recording by combining the iconic bass line from Roy Orbison’s "Pretty Woman" with new and raunchy lyrics in the song "Oh Pretty Woman." Orbison’s record company, claiming copyright infringement, took 2 Live Crew all the way to the Supreme Court, but 2 Live Crew won on Fair Use grounds.

2 Live Crew’s song was clearly made to make money, a strike pushing away from Fair Use. However, the fact that their purpose was also to parody the classic’s naiveté pulled the use back toward Fair Use. On the other hand, 2 Live Crew’s song appropriated the very essence of the original. This pulled away from Fair Use. Yet the fact that the parody would not be recognizable without copying the distinctive riff pulled toward Fair Use once again. Finally, the fact that Orbison was unlikely to reach out to new fans by making critical rap versions of his hits pulled even further toward Fair Use, allowing 2 Live Crew to win the day.

In a more recent case, Steven Vander Ark, a former library media specialist at a middle school in Michigan attempted to publish an encyclopedia of knowledge mined from J.K. Rowling’s Harry Potter universe. Despite positive feedback from Rowling herself posting to the Harry Potter reference Web site Vander Ark maintained, when he moved to publish the book of his efforts, entitled "The Lexicon," a law suit ensued. The librarian from Michigan was not as fortunate as the rappers from Miami.

The commercial motive to sell the encyclopedia pushed against Fair Use. The "transformative" nature of taking facts from the texts and memorializing them in a reference guide pushed toward Fair Use. However, the author lacked restraint in quoting passages. His copying, which was more than necessary for many entries, pushed against Fair Use. Finally, Rowling and her publishers planned to create reference and companion materials themselves. This convinced the judge that "The Lexicon" could have deprived Rowling of customers for her own impending encyclopedia. Fair Use was denied. Better Safe than Sorry

Academics and judges have struggled to precisely define the line between infringement and Fair Use — both where it is, and where it should be. 2 Live Crew’s copying of almost an entire song is Fair Use, yet the federal judge in George Harrison’s "My Sweet Lord" case commented that sampling just three notes from a song can trigger copyright infringement.

In spite of the meandering path of copyright and fair use, there is a roadmap to guide you:

1. If you are using any image, song, recording, text, font, design, etc. that does not belong to you, then either try to obtain the rights from the owner, or do not use it.

2. If you choose to use it without permission and you, in good faith, believe that your use is fair, then memorialize in writing your intentions for your use. You will be best served if you can build the narrative of your work to reflect the importance of appropriation to your original expression. Your story should stress why the copy is integral to your method, that it’s more than background or entertaining filler. Also, as much as the artist may resist making a commodity of his or her work, narrate how your message is incompatible with that of the original — so much so that it is not an economic substitute. Yours is a new work, what some term "transformative," and no one would buy yours instead of the original. It’s so new, in fact, that the original author would never put forth your message in newer versions of his or her own work.

3. Even if you think your use will not infringe on the owner, consider the extreme costs of litigation and the toll it may take on your business and your life. Then, make your decision.

Ms. Luxenburg is not facing an infringement lawsuit, and the Watercolors Society is not a court of law. The ultimate decision with regard to her prize should not be perverted into a copyright law analysis. For the art community to analyze it as a legal question not only passes the buck on the community’s responsibility as its own arbiter, but it also leads to more airplay for copyright urban myths. Most dangerously, hiding behind copyright law concepts to advance an agenda for one art form or medium can provide fodder for the gatekeepers of content in other media where appropriation is more accepted, and in contexts where is it more legally acceptable. Just as an author’s alleged plagiarism (as opposed to infringement) should be judged by his or her peers, this particular art community must also make its own judgments on acceptable appropriation based on its own standards and ethics, not on legal ground.

The article, “The computer says no,” points out that scientific processes have been used for years to help authenticate works or art, to identify forgeries and fakes. Now, a team headed by James Wang of Penn State University has been “training” a computer to analyze Van Gogh’s brush strokes using image-analysis software, so that it can determine whether other paintings by the same artist are authentically painted by Vincent’s hand.

I may have a greater distrust of computers than most, but this sounds like lunacy as anything more than an academic exercise. It’s like training fruit flies to perform cabaret.

From an artistic standpoint, it makes little sense. Look at the broad and divergent output by many artists, many moving from one to another aesthetic, or pursuing more than one at a time. Consider Picasso’s blue period and his later cubist works. Rembrandt is known for his wide variety of brush strokes. Compare Gerhard Richter’s Ice series to his nearly photographic but blurred figures.

Add the variety of technical differences – different supports (board, canvas, paper), paints (oil guache, tempera), not to mention other media like crayon, pencil and pastel; the great variety of brush sizes and types (sable, synthetic, combination). Great artists have been itinerant, and used whatever was available. Now add the artist’s hand itself – aged in one work, young and brash in another; or shaking, injured, weak, tired, angry, sad – all in a single work. It can be vigorous one moment and tentative the next, whether intended or not.

So isn’t this a computer application that has strayed too far into the realm of chaos theory? An expert authenticator can learn to recognize not only how an artist preferred to apply oil to a canvas, or tempera to a board, and at different periods of the artist’s life, but even how that artist’s hand treated portraits as opposed to landscapes, how sad subjects might affect the strokes, or how particular elements of a painting are likely to be treated, like Van Gogh’s famous olive trees. Authentication can involve more than facts and their strict application – moving into the realm of forensic psychology of a deceased artist.

Chaos theory is about finding patterns in what appears to have no pattern. When there is limited data to analyze, like stock market performance, it is fascinating to identify as many variables as possible that caused a down-tick in the NASDAQ – perhaps a gloomy commentator on MSNBC, the threat of war, a new technology release, a storm approaching the Atlantic coast, the shortening of days in the autumn. And computers can do much to spot those root causes – or at least to help theorize based on correlations.

But here, not only are the variables that make a brush stroke lie the way it dies on a canvas truly infinite, but so is the output of possible brush strokes. The output is not just a number than can go up or down; it is one of an infinite number of brush strokes that can be achieved by the artist.

Both artistically and scientifically, I am more than skeptical of this project. What about legally? That’s something I’m actually qualified to talk about. It is legal process that will often decide, if disputed to the end, whether a particular work of art will be treated as authentic or not. Whether it is litigated against the expert compiling the catalogue raisonnée who rejects the painting, against an insurer for the value of the painting, or against the last seller for misrepresenting the painting – if the value of attribution and authenticity is high enough, it will be decided in court.

Legally, the prospect of computer software being used to authenticate and attribute paintings is frightening. Would paintings with a solid provenance or otherwise well-established as authentic  be rejected as frauds, or their value questioned, simply because the computer said so? Certainly, if such a process gained favor, newly discovered works, mainly by prolific artists, would be subjected to computer analysis, and there soon would be attempts to use computer brush stroke analysis before a jury, either as evidence or as support for an expert’s opinion.

Courts have struggled with how to let in good scientific evidence and testimony, while keeping out “junk science.” The major change in this process came in Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), when the U.S. Supreme Court raised the bar for such evidence. The Daubert decision holds that federal courts must take the role of “gatekeeper” over expert and scientific evidence in each case, emphasizing empirical indicia of reliability and the scientific method as the bases for admitting relevant expert testimony.

That ruling has raised the hopes of criminal defense attorneys, and increased attacks upon the scientific basis of many time-honored forensic techniques. Even the theory and process of fingerprint identification are publicly questioned today, nearly a century since the technique first put someone behind bars.

The prospect of a computer’s “opinion” being presented in court on a topic so ill-suited to data processing – regardless of the amount of “training” embodied in the software, and however sophisticated the algorithms employed – is chilling. Use of computers as “experts” in this way would take advantage of a common but incorrect belief, held by many, that computers are more impartial and accurate than any person can be, regardless of the task assigned. Overcoming this prejudice in a courtroom can be extremely difficult and expensive. It would require defensive argument that the computer is only as good as the information it is fed, perhaps with the support of experts who could analyze the hardware and software’s limitations and communicate them effectively to a jury. In the end, a computer’s rejection of a painting based on analysis of brush strokes will tend to sway many juror’s decisions simply because it is a computer-generated result, regardless of the computer’s limitations and the reliability of countervailing evidence.

Luckily, this scenario is unlikely to play out in 2009. The engineers behind this admit the system has a long way to go: in the trial run reported in Signal Processing Magazine, the computer identified just 4 out of 6 of the known fakes, and gave the thumbs-down to two known authentic Van Gogh works.

Fifty years ago, the line between "art" and "industry" might have mattered for copyright’s sake. Today, those terms are not (at least, on the record) consulted when determining whether or not a work may be protected by copyright. This came to be because whenever it mattered – whether the dispute revolved around an embellished drawing used as an advertisement, a carefully staged photograph of a basketball player, or a sculpture which doubled as a lamp base – tests were derived which enabled a judge to dissect the creative process from the commercial process. Judges could find that minimal level of originality necessary for the protection of intellectual property laws in any effort not dictated by concerns for utility and which required some degree of artistic discretion to bring about.

These tests perform well for the artist if at the time of creation, some level of artistic motivation turned the wheels of invention. But how should we treat such repurposed images?

A photo of a snowflake under a microscope, created with no consideration of lighting, subject placement, or purpose other than "to show what the thing is" might not have the requisite level of creativity necessary for copyright to hold. Neither would the protections of VARA which apply to photographs (as “works of visual art”) be of any use – since the images were not “created for exhibition purposes only.”

Certainly the report which accompanied the photos could be protected, as could the collection of images in the exhibit. However, it may be that any individual image (isolated from other elements) is free for the appropriating. Good result? Should the copyright arbiters take into consideration the general consensus of curators across America as a new factor in the originality/usefulness analysis?

The courts are filled with people who avoided the difficult conversations necessary to clarify their relationship in writing, up-front:

What are you obligated to deliver and by when?

Which events trigger your right to a check?

Who owns the copyright?

What can your publisher do with your work, where and for how long?

Consider Gregory Armento, an illustrator in North Carolina. He agreed to draw some maps for a publisher, but his contract neither prescribed which party owned the copyright nor defined the maps as "works made for hire" (which would have conferred the copyright on the publisher). Mr. Armento even obtained a certificate of registration from the U.S. Copyright Office; unfortunately, so did the publisher. In litigation over who owned the copyright, the judge, unpersuaded by Mr. Armento’s copyright certificate, and compelled by a contract that conveyed all ownership in the maps to the publisher, awarded copyright to the publisher. Mr. Armento did many things right, but still lost on one loose detail — that he didn’t specifically reserve his copyrights for himself.

Like any contract, you and your publisher are adversaries, but also partners whose cooperation and compromise will likely be mutually beneficial. When approaching the contract, consider:

• Which parts of the contract are negotiable depends upon the artist’s negotiating power. An unknown invited to illustrate a New Yorker cover may want to smile and sign. If you have some renown, you may be able to dictate your own terms. And, scarce opportunities for publication could tip the balance toward even a small publisher. 
• If you sense your position is unsteady, test the waters — mention that you would like to propose some changes to the contract, or that you need your attorney to review it. The response may be that the publisher provides a take-it-or-leave-it form contract, or that it only negotiates on price or certain other terms.

Your contract must clearly describe what you are required to deliver and by when.

This advice may appear trite, but you would be surprised how many people — from artists to major conglomerates — fail to identify all the business obligations in a contract.

Here are some guidelines to consider when negotiating and drafting contracts with your publisher:

• Describe specifically the work to be delivered, including any specifications, style, size, medium and format.  
• Write into the contract any other expectations the publisher has for the work.
• Never assume certain details are understood, "generally accepted," or too basic to write down — all expectations need to be clearly described to prevent later litigation over differing unspoken assumptions.
• Make sure your signature is needed for any changes to the contract.

You and your publisher should clearly define what "completed" means. Beyond business concerns (meeting your expenses), you have artistic interests, as well. Your contract should anticipate artistic differences between artist and publisher, which can have terrible consequences.

For instance, a graphic designer in Connecticut agreed to produce a brochure for a health spa. The spa, a seemingly nightmare client, eventually fired and refused to pay the designer because the spa did not like any of the designer’s seven successive versions. Fortunately, a kindly judge decided that although the spa could have clearly stated in the contract that payment is conditional upon approval, it failed to do so.

Incorporating a succession of approvals into the contract can prevent surprises:

• Agree to present the work to the publisher at different stages. The medium and style might be submitted first; then the composition can be reviewed through submission of a sketch or rendering, leading through refinement of perspective, and choice of the color scheme, to the complete work.  
• Payment and termination rights can be triggered upon any one or more of the approval stages. Of course, while increasing the chance you will be paid, this also might sacrifice artistic integrity. 
• If the publisher insists upon conditioning full payment upon its discretionary approval of your artwork, negotiate for approval and payment mechanisms to balance the publisher’s subjective standards. For instance, the contract can limit the number of revisions you need to provide, or provide you with payment for revisions.

A prime issue is who will hold the copyright — do you keep it, or assign it to the publisher? Although artists generally keep their copyrights in publishing agreements, in recent years it has become more difficult for an artist to retain the copyright in their works, as a result of the Supreme Court’s 2001 decision in New York Times, Co. v. Tasini. There, the high court ruled that publishers cannot use their license to publish in print to also publish in electronic databases. As a consequence, publishers have strengthened their efforts to get copyright assignments from artists.

If you do retain the copyright, the publisher will require you to grant licenses to use the work. Conversely, if the image is a work for hire or you assign the copyright to the publisher, you will need the contract to give you back certain rights if you want to use the work in the future.

This area — copyright licensing — is a hotbed of litigation and strife. For instance, Leslie Atkins, an advertising illustrator, agreed to design branding materials for Redneck Beer’s entrée into the alcoholic beverage convention circuit. Two years later, Ms. Atkins spied Redneck Beer bottles bearing labels that resembled her original designs. After she sued, the judge found a reasonable basis to conclude that Ms. Atkins had not granted rights to distribute the designs beyond initial branding.

Here are some guidelines to consider when working on ancillary rights issues in contracts:

• Seek to keep the copyright and file an application with the Copyright Office.  
• Specify whether it is a "work made for hire". 
• Imagine every potential type and form of use that your work could be put to, now and in the future, and across geographic areas — and specify who has the right to any of those uses. 
• Consider carefully and address clearly your rights to commercially exploit the work, if any. If the publisher refuses to permit you to use the artwork commercially, then at least you have realistic expectations with which to make decisions. 
• If you relinquish copyright, your best result is an exclusive unlimited license allowing you to use your work for all purposes for all time, and excluding all others except the publisher — essentially giving you all the rights other than the copyright itself.
• At the very least, insist upon portfolio rights – the right to copy, exhibit, display and distribute a copy of the work as part of your portfolio, in print and on the Internet.
• Fight for attribution rights — the right to have every use credited to you with a copyright notice.

Failure to clarify in writing which rights you want to keep — even when it might seem obvious — can be devastating. For instance, Vargas v. Esquire presents any artist’s nightmare. An Esquire airbrush and watercolor artist named Vargas had been providing images to Esquire for a number of years, in a series known as the "Vargas Girls." Although the images were originally credited to him, Esquire later reprinted the image as the "Esquire Girls" without crediting Vargas. The court found that Vargas had assigned his copyright to the publisher, so he could no longer control how the images were used leaving Esquire free to omit attribution to the artist.

Warranties are promises about the works. Lawyers spend an enormous amount of time limiting the language and danger of warranties. But, warranties are a critical part of every contract and a way of appropriately balancing both risk and fairness.

Warranties should be made, and risk accepted, by the one who created the risk. If the publisher asked you to render a drawing or photograph of another artist’s sculpture, you should insist that the publisher clear the rights and indemnify you from any risk of suit. But if you have free reign over the content of the image, it may be more fair for you to promise that nothing in the image will violate anyone else’s rights. Your promise would generally accompany an indemnity to pay for the publisher’s legal fees and damages if sued because of your image.

Here are a few things to think about when negotiating the warranties and indemnification:

• The publisher will ask you to promise that the work was originally created by you and/or your employees — confirm you can make good on that promise. An empty promise would be a high-stakes gamble; adding indemnification to the mix would move you to the no-limits table. 
• If there is any possibility that the image could infringe a copyright (for instance, if it or a portion of it is derived from someone else’s creative work), the contract should specify who needs to obtain the permissions and clearances to ensure that the illustration can be published, and who bears the risk of infringement.
• Purchasing insurance is a prudent strategy for managing risk. Work closely with your broker to confirm that your policy will cover your contract loss.
• Try to limit your risk by negotiating an expiration date or monetary cap on your indemnity obligation.

A cogent and forthright negotiation will either help you craft a comprehensive agreement or reveal warning signs about your prospective business partner. However, the essential points we have outlined are often postponed out of the optimism of a new business and artistic relationship. Some people choose to avoid controversy in negotiations, and, instead, gamble on finessed language and contract loopholes. These strategies are both undependable and unpredictable. To start out, and stay on a solid footing, make clarity the first priority when negotiating a contract with your publisher. Or, like a seasoned gambler, trust your friends — and cut the cards.

Share and Share Alike
Unlike works with a single author, in a joint work, the co-authors have equal, individual rights to control and exploit the work, particularly in four areas: Ownership, Control, Accounting and Transfers.

Ownership:
No matter the size of the contribution, the joint work’s author owns an undivided interest in the entire work and all its elements. Similar to a joint bank account, each party to the account can withdraw funds, even beyond amounts he or she deposited; likewise no single author owns any more or less than the other.

Control:
Traditionally, an author has the exclusive right to use, reproduce or make new works inspired by the original work. An author of a joint work shares that control with other joint authors. As such, one joint author can exploit the joint work without the other authors’ permissions. One joint author can exploit any individual element of the joint work without the other authors’ permissions — even, with limitation, if the non-consenting author contributed the element in question. And, joint authors cannot sue each other for infringement. For instance, imagine a painter contributes a painting and a photographer contributes a photo to a collage. Without consulting the painter, the photographer may license the collage for a calendar and may permit the calendar company to sublicense the collage for a mouse pad.

There are some limits to this control. The law will not permit a joint author to "destroy" the work. However, it may be difficult to prove any particular use or license has lowered the value of the work so much that the work has been "destroyed."

Accounting:
Joint authors are accountable to each other for any profits generated from the joint work. All such profits must be disclosed and divided equally among all joint authors.

Transfers:
A joint author may sell his or her ownership to a third party. The buyer will "step into the shoes" of the original joint author, as if the transferee is the joint author with respect to all of the rights discussed above. In our example about the painter’s and photographer’s collage, the photographer could transfer his rights to a cereal company, without the painter’s permission. The company can use the image on the box of one of its products. The company will have to pay the painter for whatever value it gains by using the image on its cereal boxes, but the painter might not be able to prevent the use. Moreover, unlike accounting for licenses, the sale of the ownership interest is not subject to the division of profits. Our rogue photographer can sell his interest in the collage to the cereal company and keep the sale price completely to himself.

How is a Joint Work Created?
Many collaborations may result in joint authorship. Consider each of these questions together to determine if they suggest a contributor be treated as an author. 1) Can two or more people claim "authorship"?; 2) Did those authors "intend" their input be a portion of a greater work?; and 3) Are the inputs "inseparable" or "interdependent" parts?

1) Authorship.
Becoming a joint work "author" itself depends on several elements. Each of these considerations, balancing against each other, will tell the story of authorship.

Does the nature of the contribution suggest authorship? This requires that something more than a de minimus input be made — more than a word or a line. Some dispute exists as to how much "more" than the bare minimum is required. It seems clear that the contributor’s input must be greater than mere labor or mere financing. Confusion arises when a collaborator’s input itself (without the whole of the joint work) would not be eligible for copyright protection. This is primarily an issue for collaborators who take on a consultant’s role, rather than a production role.

For example, one person’s song lyric suggestions made to a fully-crafted, rough draft did not create joint-authorship. However, two years prior a person’s stock character ideas made during the entire creation cycle did create joint authorship of a comic book. The split decisions amplify the importance of intention between creators to collaborate on a work — that intention may be construed by the moment in the life of the work when the alleged co-actor made the contribution.

Second, does the contributing party possess artistic control of the project? For example, a translator on a film may make significant contributions during production. He may even write full passages in the screenplay. However, if the translator does not possess the ability to control whether or not those contributions are incorporated into the film, it is unlikely his input alone instills him with the rights of a joint work’s author.

Third, is there evidence of how authorship is claimed? Such evidence can be found beyond a collaboration agreement. The credits may denote a single author. Arrangements with galleries or theaters, or references in magazines may only contemplate a single author. Even the tradition of certain relationships (writer/editor, playwright/actress) may imply that only a single author is intended.

Finally, is the contributing artist an indispensable party? The appeal of the work would significantly turn on the contributor’s involvement. For instance, absent agreements, Annie Leibovitz would have a much greater claim for joint authorship of a photograph where she contributed ideas during a design meeting than the intern who took notes during the meeting that were used in organizing the shoot.

2) Intention.
Authors of a joint work must intend, at the time of creating their contributions or beforehand, that their input will become part of a greater whole. The artists do not need to know each other; they don’t need to work closely together; they don’t even need to know the specifics of the future, greater project. All that is required is an intention, at the time an element is created, that the element will be used in the future, combined with other contributions, to create another single work.

The classic example is that of the lyricist. He may write lyrics with the clear understanding that the lyrics will later be transformed into a jingle. At the time of the writing, he may not know who the composer will be, when it will be made or what style of music will be used. Regardless, the intention to create a joint work is enough.

The importance of the "intention" element is best understood by considering the alternative: What if the writer composes words without the intention that they be later set to music? Recall also that an author of a joint work has the right to control future uses of the work and all its component elements.

In this instance, the writer alone is the owner. If a musician comes along who wishes to set the words to music, and the writer agrees to let him, the musician will be an author of the joint work comprised of the music and lyrics. However, the musician will not have any rights to control the lyrics alone. The lyrics were created prior to the intention to create the unified work. The writer, on the other hand, as a joint author of the new song, does have the right to control the music alone. The music was created with the intention that it be combined with the lyrics.

3) Merged Elements.
For purposes of law in the United States, this distinction is largely irrelevant. It simply contemplates the two ways individual elements can be intended to form a joint work. "Inseparable" contemplates the type of work where the component elements cannot be removed from the joint work and stand alone. For instance, one cannot remove the brushstrokes of three individual painters from the joint work of their singular mural. "Interdependent" parts can so be removed. For instance, the lyrics and the music to a song can stand apart without the other. However, in the song they are interdependent and create the new work.

Bottom Line
When artists decide to work together, they risk surrendering control. To avoid this result, collaboration agreements are highly recommended from the outset. Specifically, they should speak to:

• Control & Consents.
• Transfers.
• Defining your contribution.
• Work made for hire.

If you do not intend an assistant to be a co-author, explore the idea of having "work made for hire" agreements in place and get the assistant’s written assignment of this contribution. This can serve as the kind of objective evidence discussed above which would weigh against deeming the work a joint work altogether. If you want joint author credit, but you have more of a consultant’s role, you will want to avoid the grey area in the law discussed above concerning authorship. It is best to obtain a collaboration agreement, push for co-author credit on all contracts and media, or provide for a record of clear evidence that your efforts are integral to the project and that all parties intended a joint work be produced. Again, limit the ability to transfer interests by requiring unanimous collaborator consent. Set limits to the types of future uses fellow collaborators can explore. At the very least, require that any further use by any collaborator is subject to the consent of the joint authors.

The time and effort it may take to arrive at a solid collaboration agreement may thwart the momentum that has led into a collaboration arrangement. The savings (in dollars and stress) of being clear about the division of rights and responsibilities, on the other hand, will be worth the brief departure from inspiration.

The thing about oral agreements . . .

You may prefer to keep things informal to give yourself an out. But it is likely that your oral promise will be a legal contract. Most agreements do not need to be written or signed, and only require:

• that the parties be competent;
• a proper subject matter;
• legal consideration (something of value given or promised in return); and
• mutual assent to the contract.

Generally, once you and your client show agreement to exchange a commissioned artwork for something in return, you and your client are bound by your handshake. However, a particularly knotty set of laws called the statute of frauds may make your bargain unenforceable if not in writing and signed. The general rule is that neither party can be bound to an oral agreement if it cannot be performed fully within a year, or requires payment of $500 or more for goods. But the devil is in the details. Many states focus on your unique and valuable services rather than on the tangible end result — making your oral contract enforceable. It can also be enforceable if your state upholds oral contracts for specially manufactured products and:

• you made the artwork specially for the buyer;
• the artwork is not suitable for sale to others; and
• you begin to create the artwork before your client cancels the commission.

If the commission agreement was made with an out-of-state buyer or at an out-of-state exposition, determining which state’s law applies makes these exceptions even more devilish. Further, you should be extra careful when considering a commissioned job with a municipality. Courts generally find that an oral contract cannot be implied against a municipality.

Finally, even if your contract is unenforceable, you or your client may still have quasi-contractual rights, based upon the expense and time committed in reliance upon promises made, under a legal claim for estoppel. Estoppel prevents one party from taking action that is opposite to his prior actions or statements if it would harm the other party.

So you do have a contract . . . what does it say?

Assume the handshake did seal an enforceable deal. Exactly what are you and your client bound to, besides creating the commissioned piece and paying for it? Perhaps the greatest risk in the informal deals you make is defining your bargain. The terms of your deal depend on what you and your client remember, and which side’s version of the facts is more convincing. Uneven memories lead to frustrating cases of he-said, she-said. Without words on a page, a contract dispute often finds its way to lawyers and the courthouse. The high cost of litigation should be weighed in your decision whether to put a commission in writing, as well as in deciding whether to enforce a contract, or get out, if things go badly.

Things go badly. Can you get out?

Many things can happen to make you want or need to break your deal — thieves could steal the piece, or the shipper could drop it; you could break your arm, or the cost of materials could skyrocket. Your commercial success could impair your ability to finish on time. Will this alleviate your obligations under the contract?

Generally, none of these events are a legal basis to escape from the contract. But, you may find an escape hatch from your contractual obligations through the legal defenses of impracticability or unconscionability.

The law may completely excuse you from the contract if a surprise makes it wholly impracticable for you to deliver the commissioned work. However, this is a rare defense, usually limited to illegal contracts or the death of a person, or destruction of a thing, necessary to perform. For instance, if you were commissioned to sculpt from a rare wood found only in a nation that is subsequently embargoed, a court may find the contract impracticable and excuse you from producing a sculpture in that wood. Note that neither a better offer nor a mere increase in material costs makes a contract impracticable.

A court can also excuse an artist from a contract if the contract is unconscionable. For the defense of unconscionability, you need to prove you were essentially forced into what was a bad deal from the start — that the contract’s terms are unreasonably favorable to the client and that you did not have a meaningful choice in the bargaining process about whether and how to enter into the deal.

Once you finish, you may change your mind about selling or prefer to sell the work to another buyer. It is possible that the client might let you walk away from the contract for nothing more than return of the fee you already received. But he also can bring you to court and demand either damages or specific performance, which would be a court order to deliver the artwork. Specific performance is only possible when a contract involves something unique (it is usually used to force the seller of real estate to complete a sale contract), but if you have not completed the work, your client generally cannot force you to finish.

In some cases, the client may try to get out of the contract and sue you for money damages — perhaps the difference between the price you had agreed to and the price demanded by another artist to create a similar work. However, it can be difficult for the buyer to prove that the other artist’s work is comparable to what you would have created, giving you defenses to the amount of damages you are obligated to pay.

Is there justice for a crooked client?

What happens if your client hates the piece? Maybe he declares it is "too weird" or not the "right colors." Maybe he takes the work, but the check bounces or never arrives. These complaints may not be a legal excuse for him to escape the contract. After you give your client a reasonable opportunity to accept and pay for the work, ask your new lawyer to prepare and send a certified letter demanding payment or offering a compromise. Hopefully, the letter will shake loose good will or fear from your client, bringing him to the bargaining table or the bank. Consider the substantial expense and time saved by avoiding litigation and make sure your settlement agreement is written by a lawyer.

Sometimes litigation becomes inevitable or at least the right choice. Both sides will have a chance to tell the court their recollection of the oral contract, and why the finished piece conforms, or fails to conform, to its terms. It is possible that neither side will be happy with the litigation result, particularly after paying legal fees. Even if you win in court, you won’t be winning the lottery. Legally, you are entitled to recover only the benefit of your bargain — enough to return you to the position you would have been in had the client upheld his end of the bargain. And, win or lose, you will have to pay your own legal fees.

If, after litigation, you have not delivered the work to your client, you will probably not be able to recover the commission price and keep the artwork. You may be required to make reasonable efforts to sell the painting for the best possible price in order to mitigate your damages. Following sale, your damages would be any amount by which the commission price exceeded the actual sale price, plus potentially your reasonable costs to store and sell the work.

However, if the artwork cannot be resold (for example, if it is ephemeral, like an ice sculpture), you may be entitled to receive damages valued at the entire commission price. Finally, if your client has the work, but refuses to pay, you could seek to recover the commission price, or fight to get the work back through a legal action for replevin, but not both.

The least you can do . . .

There are some steps you can take now to try and minimize problems resulting from your commission without a written contract. Although none of these will reduce all of your risks, they may help you manage them:

• Write down all of the details you remember about your conversations with your client and what you think you and your client agreed to during those conversations. Consider whether you should confirm your understanding of your bargain with your client by e-mail.
• Maintain full insurance coverage for studio, materials, works in process and finished artwork, and keep insurance schedules of your works up to date.
  Arrange to show your work to your client one or more times while it is in progress to avoid any surprises at the end.
• Resolve all issues about copyright ownership, including entitlement to registration.
  Provide your client with instructions for restoration and maintenance of your artwork in accordance with the Visual Artists Rights Act, to preserve and protect your work to the fullest extent of the law.
• Most importantly, make sure you get an experienced, art-savvy lawyer to help you sort through these issues — and draft your written contract for the next commission. 

William F. Zieske, Coco Soodek & Matt Petersen, Bryan Cave LLP Art Law Group
www.bryancave.com.  This article is for informational purposes only and is not legal advice.

A business is assumed to be a general partnership or sole proprietorship if it isn’t legally formed as another type of entity. So if you do nothing to create an entity, you will be presumed liable for any debts or liabilities of the festival, which puts your nest egg and inventory on the line.

We recommend you choose an entity that offers limited liability. Limited liability is the right of shareholders to be free from value already invested or promised to invest in a company. The most common entities offering limited liability are corporations and limited liability companies. Setting up one of these entities requires filing a form with an appropriate state government and paying a fee (usually between $150 and $750).

An advantage of both entities is that they can be set up and managed by just one person or by a team of people. Consult a good corporate attorney and accountant for help deciding which form best suits your needs, and assistance in preparing the necessary paperwork to register with the state.

Step Two: Follow the Rules
Once you’ve organized as a business, act the part! Follow the tax rules and state filing requirements, and keep funds and bookkeeping for the entity separate from your own and other entities’. If the company is run as a sham to obtain tax advantages and insulation from liability, those advantages will be lost. If run properly, the entity will shield the festival owners from liability for losses, mistakes and accidents that may upon the festival entity.

Whether you choose a public or a privately-owned location, you will have to deal with local government. You’ll need to deal with sales tax and business licenses, as well as permits for serving food or alcohol. Parks and other public spaces are often the most appealing locations because they appeal to pedestrian traffic. Unfortunately, reserving a public space usually requires obtaining government-use permits, which often come with requirements about security, parking, electricity, water, waste disposal and restrooms. All of these might require dealing with bureaucratic departments, and more fees.

It is crucial to understand the requirements and risks associated with your permits and local laws before structuring your insurance and drafting contracts with vendors and exhibitors. For instance, if the municipality can cancel the permit because of weather, a conflicting event or other reasons beyond your control, you will want to get similar escape clauses from your vendors.

Keep in mind that visitors retain certain First Amendment rights in public spaces, which could reduce your control over what your exhibitors and visitors can display or express. When the organizer of a street art festival in a Columbus, Ohio, park asked police to remove a man for peacefully distributing leaflets, displaying signs and speaking with visitors about his religious beliefs, it became a federal case. A federal appeals court rightly found that the street was a public forum regardless of the festival’s permit to use the area, and therefore the police had violated the man’s constitutional rights by removing him (Parks v. City of Columbus, 395 F.3d 643 (6th Cir. 2005)).

If you prefer to avoid the municipal red tape and the need to provide for bathrooms, water and other needs, paying an expo center or private exhibition hall can simplify things. For cheap and visible private venues, you may even want to consider under-utilized parking lots. Privately-owned locations will require you to sign a lease or get a license, and obtain insurance and a city permit. Any space you use might also require you to use union workers in the construction or transport of your festival, for instance if the owner of the facility has entered into a collective bargaining agreement.

Step Three: Protect the Fest
Your new entity has assets and risks of its own, and needs to have insurance to protect it against the unforeseen or chaotic.

For instance, in 2007, a sudden, violent hail and wind storm slammed an art festival in Evanston, Illinois. Exhibitor tents, artwork, merchandise and chairs flew across a city block. Several people were injured; four were hospitalized. Much of the artwork was destroyed, and buildings were damaged. The festival shut down, and artists and vendors lost expected sales. Legal issues are still being sorted out, but ultimately the festival could be liable for some or all of these losses.

Bad weather is far from the only risk. Theft, personal injury, contract disputes, bad weather, loss of power and breakage — even disputes over the content of artwork — can have drastic consequences for the festival. However, these can be limited and managed beforehand, through well-drafted contracts and insurance coverage.

To determine what insurance coverage the festival is likely to need, brainstorm the risks. Workers’ compensation is generally required for every employer, and commercial general liability coverage is essential and often required to get a permit or lease a space. Beyond these, an attorney and a trusted insurance broker can help with the perplexing array of choices. Policies can usually be purchased on an event-specific basis, reducing the premium. Before signing, ask the broker to explain (and, optimally, an attorney to review) the policy coverage along with any confusing endorsements and exclusions.

While insurance deflects certain risks to an insurance company, contracts can be used to allocate risks among the festival and its participants. When buying insurance, you balance the cost of coverage versus the likelihood and magnitude of the covered risk. Risk-allocation by contract is not so formulaic — risks should be placed as much as possible upon each individual exhibitor without frightening them away. See sidebar for an explanation of the four most commonly-used risk allocation tools — warranties, waivers, indemnities and limitation of liability.

The theft of two Chagall lithographs from a New York expo in 1984 illustrates how insurance, liability waivers and warranties interact. The Chicago gallery that owned the Chagalls had signed an exhibition contract stating that the organizer would provide security, but warning that exhibitors should provide their own insurance. When the Chagalls, worth $38,000, were stolen at the expo, the gallery’s insurer paid the loss, then tried to recoup it by suing the organizer for not providing enough security. The organizer argued back, successfully, that the gallery had agreed in the exhibition contract to waive lawsuits against the organizer for any stolen artwork. Although the organizer was obligated by the contract to provide security, it was not obligated to provide perfect or even good security. In other words, there was no warranty about security and, accordingly, the organizer had not done anything in violation of the contract (Unigard Mut. Ins. Co. v. Int’l Art Exposition, Inc., 1986 U.S. Dist. LEXIS 29767 (N.D. Ill.).

Like the expo in the Chagall case, if you encourage exhibitors’ confidence by describing the security to be provided, be clear about who is financially responsible for losses due to crime.

The level of security you provide to protect festival-goers is defined by state negligence law. Translation: If someone is injured, a judge or jury will decide whether security was adequate, based on a fuzzy legal standard and guided by previous cases, at the end of expensive litigation. Accordingly, security personnel should be selected carefully, be well-versed in the festival’s rules, and have good communication skills.

Besides physical damage and injury, there are tax and copyright issues to handle in the exhibitor and vendor contracts. Unless all sales will be shared by the festival as a collective, the exhibitor agreements should require each seller to show proof of their own sales tax number, and state that the seller is responsible for sales taxes.

If an artist displays or sells a work that infringes someone’s copyright, the festival might be held vicariously responsible, even if it doesn’t know about the copyright infringement or make any commission on the sale (Perfect 10, Inc. v. Visa Int’l Serv. Ass’n, 494 F3d 788, 802 (9th Cir.2007) and Fonovisa, Inc. v. Cherry Auction, Inc., 76 F. 3d 259, 263-64 (9th Cir. 1996)). To deflect this, exhibitor contracts should include each exhibitor’s warranty that its works are not infringing, and indemnification of the festival for vicarious infringement liability.

Of course, there are many other things to cover in your contracts: rules and consequences for their violation, fees, competition rules, display specifications, and hazard restrictions. It is impossible to predict every problem, so consider a provision that says each display is subject to inspection at all times, and that exhibitors must comply with reasonable requests for the protection of the festival or the public.

Finally, art, like life, has risks. Be comfortable with the risks, manage and limit them, and get a good lawyer who you trust to guide you through the maze.

It’s a month after writing this blog the first time, and I just deleted all but those first paragraphs. This morning, as I set the same mug on its ceramic disk – which also reminds me that this is, in fact, Bryan Cave – the litigator inside me cried out, “strike that!” and scuttled the abstract philosophical approach.

In the meantime, I’ve avoided looking up any definitions of art (although I’m sure I have been influenced by opinions I encountered in life), and concentrated on what art is to me. My first thought was to define it by how it is created, then by the artist’s intent in creating it, then decided it really had more to do with how something reacted on my own mind than what the artist’s mind intended. It took me way too long to realize that art is determined by its relation to both the artist and the viewer – that, like all the best things in life, art really depends on two people.

So here’s my latest definition: Art is an abstracted communication – the creation of one mind, the artist’s, while freed of practical concerns, that when communicated helps other minds, the audience’s, to be freed from practical concerns. But this is one form of communication where a total disconnect is perfectly fine. What’s meant by the artist, if any one definite thing is intended, doesn’t have to be picked up by the audience, and everyone in the audience can take away completely different things from the work, without demeaning it in the least.

There seems to be an artistic continuum, from fine art to the merely artistic, based on how free the artist’s mind is in the art of creating the work, how broad an audience it speaks to, and how much it transports the viewers’ minds.

It’s the best I can do. If you disagree with my view of what art is, that’s great. I’m a lawyer, and I eat disagreements for breakfast, lunch and dinner. Disagreements aren’t art, but they are, like art, part of what defines us all as human and keeps the world infinitely interesting.

So as we enter the New Year, here’s to art, artists and audience, and to dialogue, disagreements and disputes. To Art, and Law.

Cheers!

First, I am not monogamous in the least when it comes to artists. I collect them. I rarely discard, but over-familiarity has made an initial passion die out entirely over decades, such as my adolescent love for Van Gogh.

Second, I’m still exploring, so there is a lot out there that hasn’t hit my palate yet. Third, there are so many artists whose works I’ve experienced, loved and even kept intact in my mind – collected from museums, in travels, at art fairs and in restaurants – whose names I simply cannot remember. As it is, this list is limited to “recognized” visual artists that remain foremost in my mind today.

Art movements and genres: German expressionism; Russian avant-garde, English Arts & Crafts movement; Art Nouveau; 1960s-1970s album cover psychedelia; Ukiyo-e of the late Edo period.

Painters: Max Beckman; Erich Heckel; Vassily Kandinsky; Natalya Gocharova; Frida Kahlo; Georgia O’Keeffe; Edvard Munch; Amedeo Modigliani; Gerhard Richter; Chuck Close

Sculptors: Keith Haring; Ya’akov Agam; Juan Munoz; Virginio Ferrari; Henry Moore; Lorado Taft;

Photographers: Alfred Stieglitz; Julia Margaret Cameron

Installation Artist: Christo & Jean Claude

Mosaic & Tapestry Artist: Marc Chagall

Print Artists: Andy Warhol, Utagawa Kuniyoshi

Friends, a neighbor, as well as clients, appear in my list of world-recognized artists. I count myself lucky to be able to see great works by nearly every artist listed here within a short walk of either my office in downtown Chicago or my home in Hyde Park. But I am even more fortunate to be surrounded by artists in my private life – my wife, my mother, my niece – whom I appreciate even more than any of the above.