Time Warner in copyright dispute over photographs

Legendary photographer Alfred Eisenstaedt (1898 – 1995) captured many iconic images during his long and distinguished career - a large proportion of which he spent working for Life magazine.

Eisenstaedt was also, reportedly, very generous - regularly giving copies of his prints to his friends, family and the subjects of his photographs.

Some of these photographs are now the subject of a legal dispute between Time Warner, the owners of Life magazine, and the family of Eisenstaedt's sister-in-law and friend, Lucille Kaye.

DNAinfo New York reports:

The dispute began in April 2013 when Kaye's family planned to auction off some of the work through Sotheby's.  

Time Warner interceded, claiming that under contracts it signed with Eisenstaedt before his death, it has rights to all the photographs and negatives he took between Jan. 1, 1929 and July 26, 1994. The media titan said that under the terms of the agreement, that includes the disputed photographs.  

But [John] Catterson, who represents Kaye's family, said Eisenstaedt had given the photos — which include the Hitler-Mussolini meet-up — to her.  

"The actual photographs we're talking about were photographs in Miss Kaye's apartment at the time she died in 2012," Catterson said.  

"They had been gifted to her well before [Eisenstaedt] died," he added..."

...In 2012, Kaye died at 92 without any children. She left her possessions, including the photographs worth an estimated $50,000, to her nieces and nephews in South Africa, and made Catterson the executor of her estate.  

In April 2013, Kaye's family decided to auction some of the photos through Sotheby's. They later decided to pull the items from sale, but not before Sotheby's included them in a catalog.  

Time Warner spotted the listing and contacted Sotheby's, claiming ownership.  

Subsequently, Sotheby's refused to return the photos to Kaye's family until they resolved the dispute with Time Warner.  

Catterson filed the April 9 petition in Manhattan Surrogate's Court to have a judge determine ownership and to order the return of the photographs to Kaye's family.  

[Time Warner's lawyers say that] under its agreements with Eisenstaedt, Time Warner does own the copyright to his works and pays his estate 50 percent of all revenue from the licensing of his works.  

However, Catterson [claims] that Kaye's family owns the disputed prints because Eisenstaedt gave them to her before he signed any contracts with Time Warner.  

He also notes that under one of the contracts, Time had a right to all the photographs in rooms located at the Time & Life building and in Eisenstaedt's Jackson Heights' apartment. Catterson said in the filing these photos were kept at Kaye's apartment and there is no evidence they were in Time & Life or Eisenstaedt's apartment.  

He added that Time Warner has no proof of ownership since it has not kept an inventory of Eisenstaedt's photography and cannot "articulate which, if any, of the photographs are part of the collection assigned to Time in the agreements."

Sounds like a very interesting dispute from this initial report. It would be good to get a look at Catterson's petition and any responses from Time Warner. If anyone has access, please pass them on!


Source: DNAinfo New York, 21 April 2014

Miró sale cancelled

In a similar situation to that Detroit (reported here and here), but on a larger scale, the Portuguese government sought to sell 85 works by Spanish surrealist Joan Miró in a bid to cut its debt.

Portugal hired Christie's (who was called in by the Detroit Institute of Arts to value its works) to sell the pieces.

The decision to sell the art drew widespread criticism, and a case was filed in Lisbon to prevent the sale. Although, the court ruled against the claimants, this week Christie's withdrew the artworks from its auctions.


Reuters explains:

The auctioneers withdrew [the artworks] from a London sale even though a Lisbon court threw out a suit by opposition lawmakers, prosecutors and the public trying to block the offer saying the government had violated the rules on classifying the artwork. 

The Miro collection, estimated at more than 35 million euros ($47 million), came into state hands in 2008 when Portugal nationalized the failed bank BPN that owned them. 

... 

"The legal uncertainties created by this ongoing dispute mean that we are not able to safely offer the works for sale," Christie's said only hours before the two-day sale was to start.  

The paintings are being offered by the state holding company Parvalorem, which is in charge of minimizing the impact of BPN's old debts and bad loans on public accounts.  

The court ruled the sale could not be stopped but noted that the state culture secretary's decision had not sought proper authorization to send the paintings to London last week.

The pieces remain at Christie's in London for now. We will have to wait and see whether they are returned to Portugal.

Source: Reuters, 4 February 2014

Sotheby's denies forgery claims

Following allegations that a piece of Chinese calligraphy sold at auction in New York in September 2013 is a fake, Sotheby's have been compelled to issue a statement insisting that the artwork in question is genuine.

By way of background, the Wall Street Journal explained last month:

An ancient Chinese scroll, which went under the hammer for $8.2 million at an art auction in New York, has become the focus of an intense debate between the auction house that sold it, the wealthy collector who bought it, and a trio of museum experts who have denounced it as a fake.  

 

The public spat began Saturday when three art experts from the Shanghai Museum alleged that the calligraphy work, titled “Gong Fu Tie,” [pictured above] was a forgery. Purchased at a Sotheby’s auction in September by collector Liu Yiqian, the piece is attributed to the Song Dynasty poet Su Shi, who lived from 1037 to 1101 and is known by the literary name Su Dongpo.  

The three specialists scrutinized the work in the Xinmin Evening News, a state-owned newspaper based in Shanghai. They added that they plan to release a research paper giving more details about why they believe the piece to be a counterfeit. 

Last week, the three experts published their findings in the China Cultural Relics News. They maintain that the calligraphy is a forgery produced using a special technique from the late Qing Dynasty. In response, Sotheby's insisted that the piece is genuine, and have said that their experts will also provide a more detailed response within 10 days.

This very public debate over the authenticity of an artwork sold at auction to a private collector is quite unusual. It seems particularly rare for a major museum to stand up to such a big auction house. However, it remains to be seen whether the intervention will have any effect on a sale that has already taken place.


Source: Wall Street Journal, 23 December 2013, Want China Times, 4 January 2014

Dia challenge, a summary

Readers of this blog may have heard mutterings about the recent controversy surrounding the auction by Sotheby's of a number of artworks owned by the Dia Art Foundation. In brief, this is what happened.

Earlier this month, two of the founders of the Dia Art Foundation filed suit in the Manhattan state court to prevent the organisation from selling a number of artworks from its collection.

The Foundation, a nonprofit organisation, which was established in 1974 to initiate, support, present and preserve art projects, had decided to sell some of its works at Sotheby’s to raise money. Founders Heiner Friedrich and Fariha de Menil Friedrich, sought an injunction against the Foundation and Sotheby’s to prevent the sale of the artworks. At the time, it was reported:

Many of the works named in the lawsuit were donated by Mr. and Ms. Friedrich when they created the foundation with the art historian Helen Winkler. The lawsuit claims that selling the works to private collectors would remove them “from public access and viewing in direct contravention of Dia’s entire intent and purpose.” The auction would be a breach of an “implied covenant of good faith and fair dealing” with the Friedrichs and the artists who made the works, the suit states.

The case was, however, dropped. The New York Times reported:

The founders, Heiner Friedrich and Fariha de Menil Friedrich, said in a written statement through their lawyers on Tuesday morning that while they consider the sale “utterly wrong” and “against Dia’s mission,” the foundation is “our precious child, and we do not wish to continue to oppose it through legal action.”

Accordingly, the sale of the works went ahead. It appears, from Sotheby's catalogue that the foundation raised a significant amount of money. Indeed Cy Twombly's Poems to the Sea (below) raised almost $22 million alone. Let's hope the foundation puts the money to good use.

Source:   The New York Times, 7 November 2013 & 12 November 2013

Christie's conditions of sale found to be reasonable

The recent case of Avrora Fine Arts Investment Ltd v Christie, Manson & Woods Ltd (2012) saw Christie's' terms and conditions of sale put under scrutiny by the English High Court.

The case concerned a painting called “Odalisque” which the claimant, Avrora Fine Arts Investment Limited (“Avrora”), bought at an auction held by Christie's. The painting was said to be by a famous Russian artist Boris Mikhailovich Kustodiev. However, after the sale, an art dealer who had been asked to view Avrora's collection expressed doubts about the authenticity of the painting, and certificates were later obtained from Russian museums stating that the painting was not by Kustodiev.

The sale was conducted pursuant to Christie's' conditions of sale. These included a limited warranty enabling a buyer to cancel a sale and obtain a refund in the event that the item sold was found not to be authentic. They also provided that all statements made were statements of opinion; that, subject to the limited warranty, Christie's would not be responsible for errors and omissions in the catalogue; that each item would be sold "as is"; and that, subject to the limited warranty, no representation, warranty or guarantee would be given in respect of matters such as attribution, authenticity and provenance.

Avrora brought the claim to cancel its purchase of the painting and get a refund pursuant to the warranty given by Christie's. It also made claims against Christie’s for negligence and misrepresentation under the Misrepresentation Act 1967.

In respect of the first claim, the Court held that since the evidence indicated quite strongly that Kustodiev was not the painter, Avrora was entitled to cancel its purchase of the painting and to recover the money paid.

The Court then turned to Avrora’s claims under the Misrepresentation Act – that Christie's (i) had been negligent in attributing Odalisque unequivocally to Kustodievd; and (ii) had impliedly represented that it had reasonable grounds for attributing “Odalisque” unequivocally to Kustodiev when it did not in fact have such grounds. Both claims raise issues relating to the “requirement of reasonableness” in the Unfair Contract Terms Act 1977 (“UCTA”).

On the first point, the Court said that Christie's' conditions of sale made it clear that it was not assuming responsibility to Avrora. Therefore, the negligence claim must fail unless the conditions were found to be contrary to UCTA. However, on the second claim, the court found that a misrepresentation had been made as it was clear that Christie's had not only warranted that Odalisque was by Kustodiev but had represented that this was its opinion. Since Christie's was giving its opinion as well as a warranty, it had impliedly represented that it had reasonable grounds for holding that opinion.

The Court then considered UCTA. Avrora had submitted, that UCTA applied and Christie's' conditions failed the requirement of reasonableness as required under the Act since they would, if effective, preclude a negligence claim against Christie's. Christie's said that UCTA did not apply. The Court found that UCTA did apply as: "the conditions did “[part] company with reality” insofar as they negated the assumption of responsibility. The reality was that Christie’s had taken responsibility for the attribution of “Odalisque” to Kustodiev. It stated that that was its opinion; it gave Avrora a warranty to that effect; it indicated that its views reflected research (for example, by presenting itself as a centre of excellence and, more specifically, by explaining in the “Important Notes and Explanation of Cataloguing Practice” that more qualified catalogue entries – e.g. “Attributed to …” - were “based upon careful study” and represented “the opinion of experts”, tending to suggest that an unequivocal attribution would be too); and it was intending to charge the buyer a substantial premium."

The next question was, therefore, the “requirement of reasonableness” under UCTA was met. If Christie's' conditions failed to meet this requirement, the conditions could not bar a claim for negligence under the Misrepresentation Act. The Court found that the requirement of reasonableness was met. The court listed a number of reasons for this conclusion, including:

- there was no question of Avrora being left without a remedy if “Odalisque” proved not to be by Kustodiev, since Christie’s was giving a warranty;
- it was not unreasonable for Christie’s to exclude its liability in the event that the authenticity of the painting was incorrect;
- while Christie’s only contracted on its own standard terms, Avrora is a vehicle for a particularly rich man and it was under no economic imperative to deal with Christie’s if it did not wish to; and
- Avrora appeared to have some familiarity with Christie’s’ terms, and in any event could reasonably be expected to know of them.

Accordingly, the relevant parts of the conditions were not invalidated by UCTA and so could serve to bar the claims for negligence and misrepresentation.

To summarise, therefore, Christie's can continue to conduct business under its standard conditions of sale, under which it can contract out of liability in relation to the lots it sells. However, if it is established that a painting bought at a Christie's auction, under those conditions, is a forgery, the purchaser should be entitled to cancel the purchase and claim a refund of the money paid.

Litigating the Californian "droit de suite" ?

Christie's Inc and Sotheby's Inc were sued last Tuesday in U.S. District Court, Central District of California, by a class of artists: New York painter Chuck Close, the L.A. artist Laddie John Dill, the estate of Robert Graham and the Sam Francis Foundation (only for Christie's).

The proposed class action was filed alleging that, the auction houses violated the California Resale Royalty Act, unlawfully failing to pay artists resale royalties for their works' sales in California.

1977 California resale royalty law grants  to visual artists 5% of the proceeds from the resale of artworks under certain conditions, that: the seller lives in California or the sale occurs there, and only for specific kind of art defined as "an original painting, sculpture or drawing or work of art in glass". This resale right is extended for 20 years after the artist's death, also to the artist's heirs. 

This law was inspired to the European visual artists royalties known as the French "droit de suite" now spread throughout the European Union, thanks to the implementation of the European Directive 2001 /84, that took effect, also in Ireland and Great Britain, which previously didn't allow visual artist's resale royalties.

The plaintiffs charge the auction houses ruotinely violate the law hiding the identity of the sellers and their residencies. In their turn, Christie's and Sotheby's have announced they will charge this law for constitutionality issue, since it could conflict with U.S. federal copyright law.

Finally, if successful, these suits could shift business elsewhere, opening a new scenario in American art market.

Read  more on L.A. times here

Read more on Artjournal here
Read the complaint against Sotheby's here

French Auction Houses allowed to sell by mutual agreement

Pierre-Paul Prud'hon,
Esquisse pour le portrait de
 l'Impératrice Joséphine à la Malmaison

France State has just bought three works of art thanks to voluntary sales through Christie’s France. These acquisitions are part of a larger operation of purchase of the Marquet de Vasselot's collection for the most famous French Museums: the Louvre and the National Library. The remaining part of the collection will be auctioned next month.

France passed a new law on July 6th, which entered into force on September 1st, modifying the previous law on July 10th, 2000. The aim of such new law was to allow auction houses to conduct sales by mutual agreement. i.e. private sales between the seller and the buyer, whereas previously such transactions were restricted in France to galleries and other private dealers. The law brings France into line with other European countries as England, which already allow auction houses to handle private sales.

Since they are fast and secure, private sales have special appeal for clients seeking privacy. Museums, which often must establish a budget in consultation with their boards, often lack flexibility during auctions and prefer private negotiations.