Friday, 29 May 2015

US returns looted art to Italy

This week saw the return by the United States of 26 pieces of art to Italy. Each work had been separately looted and subsequently smuggled out of Italy and into the US.

A Repatriation Ceremony was held at the US Embassy in Rome to celebrate the return of the pieces to Italy. The ceremony was a culmination of a lengthy investigation carried out collaboratively between the US Homeland Security Investigations (HSI) and the Carabinieri Tutela Patrimonio Culturale (TPC).

In his speech at the Ceremony, US Ambassador to Italy, John R. Phillips, noted that:
"Italy is blessed with a rich cultural legacy and therefore cursed to suffer the pillaging of important cultural artifacts. The collaboration between agents from HSI and investigators from the TPC has borne fruit in returning some important artifacts to their rightful home in Italy. 
The plundering of historical and cultural artifacts is among the oldest forms of cross-border organized crime. INTERPOL estimates that the illicit trading in cultural property produces more than $9 billion in profits each year – only human trafficking, narcotics and weapons trades generate more illicit revenue. 
The crime may be ancient, but the perpetrators are very modern. The use of the Internet has provided these criminals the ability to acquire, transport, advertise and sell valuable cultural property swiftly, easily and stealthily and while making it easier to evade detection by law enforcement agencies. 
Fortunately, the customs laws of the United States allows agencies such as HSI and CBP the ability to seize, forfeit and ultimately return cultural property that is brought into the United States illegally." 
Some of the artworks that were returned include:

Sleeping Beauty, a 1,800 year-old, ancient Roman marble sarcophagus lid of sleeping Ariadne, which investigation revealed was smuggled out of Italy. HSI New York special agents seized the sarcophagus lid with a warrant issued from the Eastern District of New York.

A 5th century B.C. Etruscan black figured Kalpis, which is believed to have been looted in Italy and smuggled into the United States in 1981. After an investigation, our HSI office in Cleveland, Ohio, seized the Kalpis.


A 5th century B.C. red-figured Attic Volute Krater attributed to the Methyse Painter. This Kalpis was seized by HSI St. Paul, Minnesota.


A 17th century Venetian bronze breech-loading gun, which was seized by CBP officers in Boston as it was being smuggled into the United States. After an HSI Boston investigation, the cannon was successfully forfeited.


Reportedly, no criminal charges have been filed in relation to any of returned artworks since, in some cases, the statute of limitations on any crimes would have expired, and, in others, the paper trail for the piece's import into the US was too difficult to reconstruct. In addition, these pieces represent but a fraction of the art currently circulating on the black market. Nonetheless, as Phillips stated "every victory, every piece that is returned, every bit of cultural history that can be restored to its rightful home is a measure of progress."

Source: The New York Times, 26 May 2015

Tuesday, 19 May 2015

Replica of Old Summer Palace opens despite potential IP infringement claim by Chinese authorities


A full-scale replica of Beijing’s Old Summer Palace has opened to tourists at Hengdian World Studios, a giant film studio located in Zhejiang Province also known as “Chinawood”, amidst threats of legal action by the original Old Summer Palace's administrative office "if the replica infringed intellectual property rights".

Known in Chinese as Yuánmíngyuán (the Gardens of Perfect Brightness), and originally called the Imperial Gardens, the Old Summer Palace in Beijing was destroyed in 1860 during the Second Opium War on the orders of Lord Elgin (who, incidentally, was the son of the Lord Elgin of Elgin Marbles fame).

In a written statement sent to Xinhua News Agency, the Old Summer Palace's administrative office said the complex of pavilions and gardens where the Qing Dynasty emperors resided (the Forbidden City was used for formal ceremonies) is "unique and cannot by replicated. The construction and development of the site should be planned by authoritative national organizations, and any replication of it should reach certain standards."

An aerial view of the replica Old Summer Palace (Photo: AP)
 
The office offered no further explanation as to how its intellectual property rights might be infringed. Xu Xinming, chief lawyer at the China Intellectual Property Lawyers association, dismissed the threat, commenting that China's intellectual property law only covers 50 years from when a work has been completed, but in any case "the original Old Summer Palace has been destroyed and the replica has nothing to do with intellectual property rights."

Whilst the threat of legal action appears to hold little weight, the incident has led to a wider debate within China about the merits of the project, with Xinhua saying that many have accused Hengdian World Studios, the world's largest outdoor film studio, of "bastardizing a site associated with patriotism."

Visitors leave after a multimedia show at Hengdian's replica Old Summer Palace (Photo: AP)

Hengdian’s studio sets include replicas of the Forbidden City and the Tian'anmen Gate Tower, and Chinese blockbusters such as Zhang Yimou’s 2002 movie “Hero” have been filmed at Hengdian. Xu Wenrong of the Hengdian Group, the conglomerate behind the project, stated: “The Chinese government has never agreed to rebuild the site because its destruction is a national shame. But generations of people have all heard about the garden, they haven't been there and they expect it to be rebuilt."

He said it was natural to charge an entrance fee to an attraction, but asserted that the replica had been built "for the benefit of the people and future generations" rather than to make money. A press officer from Beijing's cultural relics bureau responded that the replica had been built for the purposes of filmmaking and tourism. "It's fully commercial and can hardly be regarded as a decent replica because it's not situated within the Old Summer Palace."

The destruction of the Old Summer Palace is still a very sensitive issue in China today, and is frequently referenced in patriotic education campaigns. The Chinese government continues to put a lot of effort into locating and recovering the 1.5 million cultural relics it estimates were looted from the palace by British and French troops in 1860, and by an allied force including troops from the United States, Russia and Britain in 1900.

Monday, 18 May 2015

Romero Britto sues Apple over copyright infringement

Apple was recently sued by the Pop artist Romero Britto over its "Start something new" campaign for using an artwork from the design duo Craig & Karl, that allegedly copies the design style which Britto is famous for. 

A screenshot of Apple's website of the "Start something new" campaign

Britto became aware of the copycat art when Apple launched its worldwide promotional campaign, but he discovered that the two artists had been systematically making art similar to his own for years.


Excerpt of the comparison offered in Britto's complaint


Britto is a Miami-based pop artist, internationally well-known, who works with several brands on advertising campaigns, using bright colours, strong lines and simple designs. According to his complaint, Britto's specific trade dress is "strong, fanciful, non-functional, and inherently distinctive. In addition, the Britto Trade Dress has acquired distinctiveness as a result of uninterrupted promotion and sale of Britto brand products and services".    

The lawsuit was recently filed in the US District Court, Southern District of Florida, against Apple and the graphic design duo for trade dress infringement, trade dress dilution, as well as unfair competition and copyright infringement.

Britto accused the two artists of violating the Britto trade dress and Apple for commercially exploiting the allegedly infringing image. Indeed, Apple uses Craig & Karl's image – representing a patchwork hand on a bright yellow background on one of its iPads in the graphics – to promote its new advertising campaign, describing how this image was realized on iPad Air 2 using IOS apps.

Further to Apple's massive advertising campaign and to the use of Craig & Karl's image in retail stores, many people contacted Britto under the false impression that he had created the infringing artwork. Britto received many incorrect congratulations on his new deal with Apple, as well as messages of dismay from business partners, and inquiries from collectors wanting to know if the image displayed in the Apple stores or on the Apple website came from him.

Britto contacted Apple asking the company to cease using the infringing image, but he did not receive a response. Therefore, he decided to file a lawsuit, asking for an injunction preventing Apple from using the infringing artwork and Craig & Karl from producing or using other copycat artworks, along with damages and attorneys' fees. 



The Reach of the Lens

One of The Neighbors
Huge thanks to Molly Torsen Stech for the following guest post on the Svenson saga. For those not aware of this US case it is what might have happened in Rear Window if Jimmy Stewart was an artist.

Molly is a copyright and trade mark policy attorney based in New York City. She recently joined INTA as Editor-in-Chief and is involved in pro bono work for Volunteer Lawyers for the Arts of New York (VLANY). Before moving to New York, she was Counsel in the Office of Policy and International Affairs at the US Copyright Office, where her portfolio included Europe, Russia, Canada, relevant WIPO committees, and the OECD.

On 9 April 2015, an appeals court in New York State decided a controversy that highlights one of the many discrete qualities of photography that challenges current law. Copyright law itself is not implicated; rather, the jurisprudence in question is based in privacy interests. Artist and photographer Arne Svenson was born in 1952 in Santa Monica, California, and has worked in New York City for three decades.  His work is quite varied; the stylistic approach that best captures it is, to my eye, accurately reflected in his biography: “First and foremost in Svenson's practice is to seek out the inner life, the essence, of his subjects, whether they be human, inanimate, or something in between.” If Mr. Svenson was surprised by the litigation, it could well be that the exhibition that prompted the lawsuit was not dramatically different from some of his prior work


In the first half of 2012, Mr. Svenson began photographing people in the apartment building across from his own in Manhattan. The building’s façade is mostly glass, and Mr. Svenson photographed his subjects without their knowledge, although his lens could of course only capture what was viewable in front of various windows facing him. He selected some of these images to comprise an exhibition he called The Neighbors, which was exhibited in galleries in Los Angeles and New York. During the New York exhibition, various subjects of the photographs learned that their images were included in the show and demanded the withdrawal of those works. The artist and gallery agreed to remove some of them, including one where siblings were photographed together (which they presumably agreed to remove based on a potential viewer’s enhanced ability to recognize them together rather than separately).  In an interview in March of this year, Mr. Svenson noted that he shot the photographs “for the tiny nuances of gesture and posture that define who we are, collectively. The subjects are to be seen as representations of humankind, non-identifiable as the actual people photographed.” His purported aim, then, was not to photograph these particular individuals; rather to photograph vignettes of people, generally, in their homes. 

In May 2013, some of the photographs that Mr. Svenson had not removed from the exhibition were shown on television broadcasts, which prompted the lawsuit; plaintiff tenants (and subjects of Mr. Svenson’s photographs) sought damages pursuant to the statutory tort of invasion of privacy, and the common law tort of intentional infliction of emotional distress. The trial court granted the defendant’s cross-motion to dismiss the complaint in August 2013, but the appellate court then granted a preliminary appellate injunction. The New York privacy statute, however, focuses on restricting activities that have “advertising purposes;” and activities “for the purposes of trade.” The appellate court noted that the legislature’s use of the “broad, unqualified terms for advertising and trade purposes, on their face, appear to support plaintiffs’ contention” that the statutory terms should apply across the board to items bought and sold, including artistic photographs. But it found that courts “have refused to adopt a literal construction of these terms because the advertising and trade limitations of the privacy statute were drafted with the First Amendment in mind.” It ultimately granted Mr. Svenson’s cross motion to dismiss the complaint. 



Not to be confused with these
Neighbours
There are several questions raised by this case which were not presented to the court. For example, many art critics note the “painterly” quality of Mr. Svenson’s photographs, likening some of his work to the paintings of John Singer Sargent. Extrapolating from this characterization, would paintings based on his photograph also engender claims of invasion of privacy? In January of this year, a civil court in Antwerp surprisingly (at least to this lawyer) found that a Luc Tuymans painting based on a photograph of a politician infringed the copyright in that photograph. In different jurisdictions, could Mr. Svenson make paintings of his photographs to avoid the privacy claim? In other words, is it the nature of photography itself that is the offender here? Or is it the resultant recognizable likeness of the individual, whether on Panalure paper or canvas? Obviously, New York and Antwerp operate under different laws, but the question of what the offense is – the likeness or the medium – is interesting. Recalling the 2004 UK case Campbell v Mirror Group Newspapers Ltd, I wonder whether Mr. Svenson’s photographs would receive more hostile treatment on the other side of the Atlantic (acknowledging, however, that Ms. Campbell is a celebrity, which certainly distinguishes the cases.) 

Another open question is the relative importance of artistic intent or meaning. In the recent Second Circuit Cariou v. Prince copyright fair use decision, the court emphasized that an artist’s commentary on his own art is not necessarily the key to answering the fair use factors under copyright law, but it spent quite a bit of time remarking on the different genres of audiences that the artists in question tended to attract, and did not provide clear guidance on who the appropriate “observer” is in qualifying the four factors of the fair use doctrine. (“Prince’s work appeals to an entirely different sort of collector than Cariou’s. Certain of the Canal Zone artworks have sold for two million or more dollars. The invitation list for a dinner that Gagosian hosted in conjunction with the opening of the Canal Zone show included a number of the wealthy and famous. . .”) In the Svenson case, the appellate court acknowledges Mr. Svenson’s status as a “renowned fine arts photographer” as a factor that favors protecting his work under the First Amendment, but the court leaves the analysis there, declining to go on to focus on the audiences that his work might reach. Copyright case law and privacy case law may simply part ways on that scale. 


As a last point: none of these struggles of balance between art and privacy are new. The Svenson appellate court, at the opening of its decision, references the renowned 1890 Harvard Law Review article by Samuel D. Warren and Louis D. Brandies, The Right to Privacy. Although it does not specifically cite this passage, I find it relevant, and as appropriate in 2015 as it was in 1890: 

If you may not reproduce a woman's face photographically without her consent, how much less should be tolerated the reproduction of her face, her form, and her actions, by graphic descriptions colored to suit a gross and depraved imagination ... [However], it is only the more flagrant breaches of decency and propriety that could in practice be reached [by a right to privacy], and it is not perhaps desirable even to attempt to repress everything which the nicest taste and keenest sense of the respect due to private life would condemn.

Saturday, 16 May 2015

Greece rules out legal action to recover Elgin Marbles


As reported by Jeremy, the Greek government publicly stated this week that it would not be pursuing restitution of the Elgin Marbles through international courts, despite being advised by their high-profile British legal team that it is a “now or never” opportunity.  

The Greek culture minister Nikos Xydakis told Greece’s Mega TV: "One cannot go to court over whatever issue. Besides, in international courts the outcome is uncertain", adding “the road to reclaiming the return of the sculptures is diplomatic and political.” The Greek government would instead switch to “low-key, persistent work” to effect the Marbles’ return to Athens.

The comments came 48 hours after a 148-page report prepared by Geoffrey Robertson QC, Norman Palmer QC and Amal Clooney was presented to the Greek government, urging it to consider legal action against the British Museum through the International Court of Justice or the European Court of Human Rights in Strasbourg. 


Elgin Marbles east pediment (Image: Andrew Dunn/Wikimedia)

Background to the report

The Greek government has made longstanding appeals for the return of the controversial Elgin Marbles, the sculptures removed by Lord Elgin from the Parthenon in the early 1800s that, following their purchase by the British Government in 1816, became part of the British Museum’s collection. 

The dossier, commissioned following a high-profile visit to Athens by the team of lawyers last October, is reported by the Independent to make a compelling case for the Greek government to pursue legal action and sets out which steps needed to be taken. “The British adhere to international law…The Greek government has never taken advantage of this Achilles’ heel,” the report is quoted as saying. “You must take legal action now or you may lose the opportunity to do so due to future legal obstacles.”

The report proposes first making a formal request for the Marbles’ return, then lodging a claim at the International Court of Justice. If the Court were to refuse jurisdiction, an approach should be made to the European Court of Human Rights (ECtHR). A “75-80 per cent chance” of success is estimated if an international court accepts jurisdiction, and the report cites a 1962 International Court of Justice ruling which forced Thailand to return sculptures removed from the Preah Vihear temple in Cambodia. The advice also suggests the case would also be looked upon favourably under the European Convention on Human Rights.

One possible future obstacle is the new Conservative government’s election pledge to repeal the Human Rights Act 1998 and to consider making Strasbourg judgments non-binding on UK courts. The new Culture Secretary, John Whittingdale, has also previously made clear that he supports the British Museum in the dispute.

Reaction

Despite such obstacles, the Greek government’s comments have been somewhat unexpected. Alexis Tsipras, the Greek prime minister, led far-left Syriza to power in January on the back of nationalist sentiment and declared his intention to secure the return of the Elgin Marbles. In March Mr Xydakis responded to the British Museum’s refusal to consider mediation by condemning British “negativism” and “lack of respect for the role of mediators”. Furthermore, a considerable amount of goodwill has been generated by recent efforts (not least Amal Clooney’s highly-publicised involvement in the matter), with public opinion in the UK also supporting the return of the Elgin Marbles to Athens.

It has been speculated that the Greek volte-face is the result of pressure from the EU and IMF over Greece’s massive debts and the looming possibility of an exit from the eurozone. However, the report was funded by a third party, and there have been several offers to assist in funding any legal action. It remains to be seen whether the Greek government will follow any of the report’s recommendations. For now this development counts as a major victory for supporters of the British Museum, but it is evident that the dispute is nowhere near its conclusion. 

Friday, 15 May 2015

Hot off the Presses! On Art Attacks: At the Confluence of Shock, Appropriation, and the Law

As some of our readers may recall, after a museum patron wrote on a Mark Rothko painting at the Tate Modern, I published an entry on A&A about the incident, idly musing on the broader intellectual property implications of such acts.  I presented more in depth research on this very challenging form of appropriation art at the John Marshall Review of Intellectual Property Law symposium last fall and the journal's symposium issue, which is devoted entirely to art law topics has just become available online.  My article explores broader legal issues associated with making artwork on top of other original works of art, including legal and ethical issues such as copyright, moral rights, freedom of expression, and preservation of cultural heritage.  With an entire journal issue devoted to art law topics, I hope our readers will find some enjoyable weekend reading.

Abstract

Does the law adequately recognize the expansive nature of art, especially in scenarios involving controversial acts of appropriation art? Of particular curiosity is just how the law should treat acts of artistic appropriation involving the creation of artwork on top of other original works of art, or art attacks. This is an issue that has been largely unaddressed by the courts outside the realm of criminal proceedings. However, the legal implications of such acts reach far beyond crimes and property torts, involving copyright, moral rights, freedom of expression, and the preservation of cultural heritage. Indeed, the issues are not just far reaching, but complex as well. Art attacks yield double-hinged questions as to intellectual property rights and moral rights. Whether art attacks are protected by the First Amendment largely splits along the lines of property ownership, while international treaties concerning the preservation of cultural heritage weigh heavily and numerously against the lawfulness, or acceptability, of any art attacks. In 1903 the Supreme Court admonished that those trained only in the law should not “constitute themselves final judges” of the worth of artistic creations—with this in mind, it is crucial to consider all the legal dimensions presented by these challenging acts of appropriation art.

Thursday, 14 May 2015

Elgin Marbles: no litigation after all, but diplomacy to continue

"Shall we go back to Athens, then?
It's positively 'friezing' here in London ..."
"Elgin Marbles legal action ruled out by Greece" is the news from the BBC website today. The article, by an unnamed author, can be read here. It states, in relevant part:
Greece has ruled out taking legal action against the UK to reclaim the Elgin Marbles from the British Museum. In an unexpected move, Greece's culture minister said the country would pursue a "diplomatic and political" approach to retrieving the sculptures instead.

In doing so, the country has rejected the advice of barrister Amal Clooney, who had urged Greece to take Britain to the International Court of Justice.

Lord Elgin acquired the Marbles from the Ottoman Empire 200 years ago.

Greece insists the Parthenon Sculptures - as they are properly known - were taken illegally and has pursued a high-profile campaign in recent years for their return, latterly with the help of Mrs Clooney. Mrs Clooney reportedly submitted a 150-page report to the Greek government this week urging it to formally request the repatriation of the marbles and take Britain to the International Court of Justice if it refused. But Greece's culture minister Nikos Xydakis told the country's Mega TV: 
"One cannot go to court over whatever issue. Besides, in international courts the outcome is uncertain".
He said he believed attitudes to the future of the Marbles were slowly changing and would favour Greece in a diplomatic approach. ...
An earlier initiative to have the dispute mediated by UNESCO was rejected by the British (on which see Marian's post here). This blogger was sad about this, since mediation never hurts: a mediator cannot impose an outcome on an unwilling party and the process itself often enables both sides to be more sensitive to the interests and the anxieties of the other.

This blogger is however curious to know the precise legal basis upon which a legal claim for repatriation of the Elgin Marbles would be made, and whether the same argument would effectively provide a basis for repatriating quantities of other museum holdings. Can any reader advise?

Monday, 27 April 2015

Virtual restoration of Mosul Museum to help track looted items

An EU-led initiative plans to virtually restore the artefacts damaged by ISIS at Iraq’s Mosul Museum. Using crowd-sourced images to recreate lost and destroyed items, researchers hope that these 3D ‘virtual museums’ will aid efforts to identify and track down looted items.

Project Mosul is a collaborative effort between researchers from the ITN-DCH (Initial Training Network for Digital Cultural Heritage: Projecting our Past to the Future), EUROPEANA SPACE and 4D-CH-WORLD projects. The project was launched two weeks after a video was released on Youtube showing the sacking of Iraq’s 300-year old Mosul Museum by Islamic State. Extremists filmed themselves using sledgehammers to destroy a series of ancient sculptures - some almost 3,000 years old and dating from the Assyrian Empire.


Screen shot of the video released by Islamic State (Image: YouTube)
The project website reads: “We assume that much of the museum's contents were looted, and anything small enough to be easily removed will be appearing soon on the antiquities market. Anything too large to remove for sale, appears to have met a violent end at the hand of ISIS extremists. In both cases, it is possible to virtually recreate the lost items through the application of photogrammetry and crowdsourcing. Given enough photographs, digital or scans of analogues, it is possible to reconstruct the artefacts and create digital surrogates of those artefacts. This provides two immediate benefits: helping to identify looted items and recreating destroyed items.”

Importantly, the project team also points out the importance of keeping the memory of these objects and their meaning alive, rather than seeing virtual reconstruction as an end in itself. For communities faced with loss of their cultural heritage, this project will provide a tool to preserve, disseminate and re-engage with their history.

However, the Mosul Museum has been closed since the outbreak of the Iraq war in 2003, meaning that relevant images can prove very difficult to locate. Pictures of the destroyed museum objects, including Assyrian and Hatrene artefacts, will be retrieved from Open Access repositories of FLICKR and PICASA, the EU digital library Europeana and anyone else willing to contribute images of their own. These 3D reconstructions will then be presented in an online museum where the data will be freely accessible to the public. 


Reconstruction of lion statue destroyed by the Islamic State
(Image: ingg/Sketchfab)
The team is calling on volunteers to help them with a variety of tasks: finding photos, processing data, contributing to the website and generally helping out with organising the effort to identify the museum artefacts.
To get involved, visit the Project Mosul website:

Tuesday, 21 April 2015

The dirty side of artistic copyright: septic tank technical drawings are artistic works says the UK privy council

It's all hands to the pump if the septic tank stops working...
Judges are not art critics.  For that reason, the definition of an 'artistic' work has traditionally been given a fairly generous interpretation by the courts, the view being that it should not be for a judge to decide what is and is not 'art'.  That said, not everyone would suspect that even the drawings for something as prosaic as a septic tank could become a battleground for testing the limits of artistic copyright.

For various historical reasons the final court of appeal for the Bahamas (and much of the Caribbean) is still the UK's privy council. This means that various UK judges occasionally provide the final word on cases which involve different laws and parties located thousands of miles away. Gold Rock Corp Ltd v Hylton is such a case.

The first instance judge made a pretty unequivocal finding of copying but Hylton had successfully argued (at his first appeal) that he could not have infringed copyright as technical drawings of septic tanks were not artistic works within the meaning of the Bahamian Copyright Act.

The relevant sections of the act are set out below.

Section 2(1) defines "artistic works" as follows:
'artistic works' include two-dimensional and three-dimensional work of fine, graphic and applied art, photographs, prints and art reproductions, maps, globes, charts, diagrams, models, architectural plans and technical drawings.
Section 2(1) contains a further definition:
'useful article' means an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or convey information and an article that is [not] normally a part of a useful article is considered a 'useful article'
Section 2(1) also says"the terms 'including' and 'such as' are illustrative and not limiting."

Finally section 2(3) states that:
The term 'artistic works' as defined in subsection (1) shall include works of artistic craftsmanship in so far as their form but not their mechanical or utilitarian aspects are concerned; and the design of a useful article, as defined in this section, shall be considered an artistic work only if, and only to the extent that, such design incorporates artistic features that can be identified separately from and are capable of existing independently of, the utilitarian aspects of the article.

A lot of time appears to have been spent debating whether or not technical drawings for a septic tank were a 'useful article' within the meaning of section 2(3).

The privy council noted that a technical drawing is not a useful article in itself (although septic tanks are undeniably useful items!) and thus would not fall within section 2(3).  Their view was that:
  1. section 2(3) concerned three dimensional objects like works of artistic craftsmanship and non-utilitarian design; and 
  2. the section actually widened the definition of artistic works by including things like works of artistic craftsmanship which were not explicitly set out in the definition of artistic works at section 2(1). 
As septic tank drawings fit squarely within the definition of 'technical drawings', and no other exceptions applied, they were protected by Bahamian copyright law.  The finding of infringement then easily followed (amongst other things the Hylton copy had reproduced spelling mistakes in the original drawings).

Whilst the decision may not have a direct bearing on other jurisdictions, the board did take into account various US authorities for the proposition that even if a septic tanks' technical plans do not offer the author protection to stop reproduction of the septic tank itself, they do offer protection against copying of the plans themselves.  The rationale for looking at US case law was that both US and Bahamian law are derived from the Berne Convention and implement it in a similar way.

It is also worth bearing in mind that there is considerable overlap between the members of the privy council and the UK's Supreme Court and Court of Appeal.  So whilst the Bahamian Copyright Act is different to the UK's Copyright Designs and Patents Act it offers an insight into the court's possible interpretation of technical drawings in the the future.

Saturday, 11 April 2015

Henderskelfe: Back from the dead

The long-running tax dispute over Sir Joshua Reynolds' Portrait of Omai, sold at auction for £9.4 million in 2001, finally came to an end earlier this year. The last judgment found for the taxpayer, confirming that no capital gains tax was payable in respect of the sale. Later HMRC was refused permission to appeal the decision – and the story was over.

The result was a valuable win for that particular taxpayer. But, perhaps more concerning for HMRC, it also left the door open for other owners of artworks to create, or take advantage of, a scenario similar to that of Henderskelfe. If an owner loaned an artwork to a business (such as a gallery or stately home open to the public) and, some time later, ended the loan and sold the art work, they too might be able to avoid giving rise to a liability for capital gains tax on the sale. This is because the art work, being in long-term or permanent use by a business, could qualify as "plant" under case law tests, which in turn would mean that it qualified as a "wasting asset" for capital gains tax purposes - and sales of wasting assets do not give rise to capital gains tax. While this specific scenario might not be commonly used, the amount of tax at stake could be high as a result of the high value such an artwork might carry.

But with the publication of Finance Act 2015, it looks as though HMRC has risen from the dead to block this possibility. As of 6 April 2015 a change to the law will aim to prevent a recurrence of Henderskelfe. The key to the change is that the owner of an artwork can no longer loan the artwork to a third party business and benefit from the wasting asset exemption. "To qualify for the capital gains tax exemption for gains accruing on the disposal of certain wasting assets," HMRC states, "an asset must have been used in the business of the person disposing of it".

This means that if an art owner ran their own business of (say) opening their stately home to the public, and a painting they owned was on display in that house for the public to see, then the wasting asset exemption might still be available. But loans to other businesses will not be enough to give rise to a capital gains tax exemption.