Exotic Dance isn't Art: It's Official.

Last month, New York strip club Nite Moves argued in court that it should be exempt from paying taxes. As reported in Art and Artifice, the club said that exotic dance was an art form and, since New York law exempts revenue from 'dramatical [and] musical arts performances' from taxation, the club's income should be tax free.

Sadly, the New York Court of Appeals disagreed, and the club will have to pay its back taxes after all. The Court noted that the tax break for the arts was intended to promote 'cultural and artistic performances in local communities' and the majority judgment was that the lap dances do not do so .  Consequently, Nite Moves was not entitled to tax exemption. '[P]erformances by women gyrating on a pole to music, however artistic or athletic their practice moves are, [is] not a qualifying performance entitled to exempt status,' they concluded.

However, the decision was close. Three of the seven appeal judges dissented, Judge Smith's dissenting judgment being particularly strong. He argued that there should be no distinction between highbrow and lowbrow dance, saying that 'a dance is a dance' whether 'artistic or crude, boring or erotic'.

The club's attorney W. Andrew McCullough agrees. The result of the judgment is that 'The state of New York still gets to be a dance critic,' said McCullough (as reported in US Metro ),' and that is not the legitimate function of state of New York.'

3D Printed Art

With only a few colours to choose from
many simply opted for white

Last Sunday, I went to 3D Print Show. In case the name doesn’t say it all – this was a show dedicated to 3D printing. Different stands demonstrated myriad applications for 3D design, image capture, post processing and printing. There was a 3D printed fashion show (sadly I missed it), a 3D printed rock band – the guitars not the band members – and a range of items from 3D lampshades, architecture models to more straightforward sculpture.

The show was an educational experience in many respects not least for the various opportunities that it offers for artistic expression (and the incredibly large number of IP and other legal issues that this new technology raises).

3D printing is more or less what it says it is, you print layers of a material to build up a structure, layer upon layer. There appeared to be at least three methods of printing. (1) building up layers of the same plastic which is fed in from spools of coloured plastic ‘wire’ (2) a method using powder and mixing the plastic – after two explanations I still don’t really understand how this works and (3) a more traditional ink jet printer approach – these guys considered themselves to be the true 3D printers.

The Replicator 2.
Not quite Star Trek (but not far off)

The most common printer on display, MakerBot’s Replicator 2, works by building up layers of plastic (i.e. method 1) but it can only work in the specific colours of the original PLA plastic – mixing of the colour pigments doesn’t seem to be possible yet for this sort of printer. This made for interesting trinkets on display and, more significantly, the potential to develop slightly gaudy prototype models for designers working on everything from toys to space stations. Those at the more traditional end of the creative spectrum had even printed copies of old roman statues in a plain colour and then post processed (i.e. painted) the surface. Not quite Rodin but an intriguing start and it certainly has enormous potential to help sculptors to develop ideas in the same way that it is already helping architects and designers to plan buildings and develop toys.

3D printed guitar

Most of the materials on display were made from a plastic called PLA but it was possible to use metals, ceramics and a range of other plastics. The impression that I got from the event was that this is just the tip of the iceberg.

Artistic applications ranged considerably from complicated geometric designs which looked incredible the first time but less so by the hundredth, to fashion design – particularly shoes – and a host of fusion items such as mixed ceramics/PLA vases and an incredible piece which looked like a lump of plastic which had been stretched in a number of directions but when viewed through a reflective cylinder showed a hand creeping out in all directions.

3D printed hand (in reflection)
Rejuvenation by Jonty Hurwitz

3D printing is a huge opportunity for the art world. However, there is also enormous potential for concern. Several of the stands were at pains to show how easy it is to copy a 3D design into a digital file. This can be done with pin point precision via various scanners but also, less accurately/more alarmingly, by scanning in a digital photograph and reconstructing the rest of the 3D image via a computer program. The ability to infringe copyright in designs and sculpture – even ones which have not been originally 3D printed is therefore enormous.

The resolution on the printed items is good but still far from mould quality. For the time being, the technology is not quite detailed enough to be, in my opinion, a viable medium for quality art. However, the potential for using 3D design to develop ideas and explore concepts in three dimensions is extraordinary.

It also opens up huge possibilities for appreciating and reimagining our cultural legacy. Imagine a 3D Starry Starry Night or Matisse’s the Snail, a Picasso line drawing that can move. Some will be extremely tacky but the ability to interact with these artistic works is an educational opportunity that the galleries of the world might like to think about. It is worth remembering that many public galleries’ key works are out of copyright and the ability for third parties to use the works will be difficult.

There were even 3D foetuses
taken from ultrasounds!

I am not aware of any intellectual property cases revolving around 3D print technology whether from the patent side or the copyright/design right infringement side but if anyone out there has heard of a case somewhere around the world please get in touch and/or share the details via the comments section below.

Protect your art via a new small claims procedure in England and Wales

Will one of these RCA secret artists benefit
from the new procedure?

On 1 October 2012, a new procedure was introduced for most intellectual property claims in England and Wales. I wrote an article for The Guardian, which explains the background and the details. You can read it here.

Essentially the small claims track is a simplified judicial process which has previously been available for a wide range of low value legal claims in the UK but, significantly, not IP. As I said in The Guardian:

“It is hoped that the new system will provide access to justice for people such as photographers and designers whose works are regularly infringed, but for whom the costs of bringing legal action are often too great compared to the potential benefit of, for example, a licence fee for the photograph. I acted on a pro bono basis for a photographer who took a series of photographs for a business brochure, but subsequently saw the images on a commercial website and in a range of other publications, all without his permission. The new system will make it easier for people like him to take action to stop that happening.

The small claims track will only cover claims for straightforward copyright, registered trade mark and/or unregistered design infringement. The Patents County Court (PCC) will hear all IP claims made under the small claims track. Patents, registered designs and other claims not covered by the small claims procedure can still be brought under a streamlined procedure in the PCC, potentially with an agreed cost or damages cap. However, this procedure is more complex and expensive."

Key points:

• It covers claims worth up to £5,000 (rising to £10,000) in 2013, the exact date is currently unclear. 
• It only applies to very simple cases. The small claims track is not suitable if, for example, you can’t easily prove ownership, the infringement isn’t complete copying or there are other difficulties such as the infringer may be able to rely on one of the many obscure defences hidden within the copyright designs and patents act. 
• It doesn’t cover patents and registered designs.  However, a whole range of rights from performer’s and moral rights to plant varieties are covered by the new procedure. 

Finally, there are a number of groups who help guide artists through the thorny rights issues such as Anti Copying in Design (ACID) and the Design and Copyright Society (DACS). These groups help to support artists and, in the case of DACS, collect royalties on behalf of artists. Links to these groups and many more are available on the Art & Artifice side bar.

Have you used the new small claims system? If you have any questions or comments - let us know.

Hands off the paintings: France's short lived art tax

France's art world has been in uproar this week over a proposal that art works should be subject to a wealth tax.

Currently, only assets such as real estate and cash are included when calculating a person's wealth for tax purposes. But a new bill to reform the wealth tax was to have provided that where a person owned any art work worth over €50,000 that too would be factored in when assessing their wealth for tax purposes.
The bill had been backed by budget minister Jérôme Cahuzac and passed by the Assemblée Nationale (France's lower house) as a means of reducing France's budget deficit. But France's top museums, including the Pompidou, Musée d'Orsay, Versailles and the Louvre wrote a letter to the government saying that the proposal would seriously damage the art world in France. The letter, quoted in daily paper Libération, said that the museums feared that the proposed tax would lead to art collections leaving the country as owners no longer wished to keep them in France. It also argued that French owners of artworks would no longer be willing to lend to French museums and galleries, 'for fear that if they are put on display they [the owners] will be identified'.

Daily paper Libération said the proposal was 'grotesque' and would 'disorganise the fragile ecosystem that allow exhibitions to come together, art historians to work, and [France's] cultural institutions to draw in visitors', Reuters reported.
Responding to the growing outrage, Prime Minister Jean-Marc Ayrault stated this week that the government will oppose the proposal. Arguably of course those owning over €50,000 worth of art would in fact be well placed to pay additional tax. But it seems that such a publicly unpopular measure was not worth the negative publicity, especially since in any case the addition of artworks to the wealth tax was expected to raise only a few million euros.

Read more here, here and here.

Apple sued for infringing copyright in photograph

A swiss photographer, Sabine Liewald, has sued Apple for copyright infringement in the U.S. District Court for the Southern District of New York, accusing the company of infringing the copyright in her photo Eye Closeup (below) by "[copying, publishing and exploiting] the photo, including in its Macbook Pro advertising campaign, keynote address and related advertising materials without permission or compensation."

According to the claim, Apple obtained the photo from Liewald's agent for "comping" (or layout) purposes only. It did not obtain any additional permissions from Liewald or her agent, and, indeed, subsequently informer her agent that it did not intend to use the photo in its Macbook Pro advertising campaign. Nevertheless, Apple proceeded to use the photo, as follows:

Liewald is seeking actual damages and for any profits attributable to infringements of her copyright in the photo, as well as for statutory damages for each infringing use of the photo.

Read the full claim here.

Hong Kong's art market boom as China slows?

At the beginning of October, leading Chinese auctioneer China Guardian held its debut auction in Hong Kong, having been lured by Hong Kong's international buyers, low tax regime and stable regulatory framework.

Landscape series by Qi Bashi, Album of Mountains and Rivers
1922, which led China Guardian's auction

Reuters reports on the apparent shift in the Chinese art market as follows:

China Guardian's sale of Chinese art and classical furniture in the former British colony follows its rise as the world's third largest auction house on the crest of China's art market boom, with sales of $1.77 billion last year...

The sale, though relatively small, is seen as a symbolic foray by China's top auction company into the turf of goliaths Christie's and Sotheby's who have long dominated international auction hubs like Hong Kong, New York and London.

China Guardian's key rival, Poly International is also planning an inaugural Hong Kong sale in late November, while A&F Auction and Beijing Rongbao Auction aim to enter Hong Kong in one or two years, according to art market reports.

China's wave of millionaire buyers and investors have helped propel Hong Kong into the world's fourth largest art auction hub, with nearly 7 percent of global art auction revenue in 2011, according to French art database Artprice.com...

Art dealers and experts say the Chinese expansion into Hong Kong is also being driven by a tightening regulatory environment in China, that has grappled with widespread art crimes including tax evasion, a proliferation of fakes, money laundering and manipulative bidding practices...

In April, a large-scale Chinese customs probe into tax evasion on art imports delivered a blow to the art market, with at least six prominent art dealers, collectors and artists being investigated, according to art dealers and Chinese media reports. "The tax probe had a huge impact on the spring auctions in China," said the owner of an art gallery in Taipei who is a frequent buyer in the Chinese art market, but who declined to be identified because of the sensitivity of the matter. "Everyone finds himself in danger so the market is extremely cold." According to market researcher ArtTactic, total auction sales this spring from the biggest four auction houses in the China market dropped to $1.5 billion, 32 percent lower than the autumn season in 2011 and 43 percent less than a year before...

Art market experts, however, say Hong Kong's laissez-faire economy, solid regulatory framework and zero-tariffs on art imports, make it a secure and stable alternative for China's auction firms. Although Beijing has lowered its import duties on arts to 6 percent from 12 percent since the beginning of 2012, another 17 percent of value-added tax still poses a huge burden to Chinese auction houses.

It certainly seems that the Hong Kong market can only continue to grow, especially in light of its favourable tax regime as compared to China, as well as, obviously, its proximity.

Source: Reuters, 7 October 2012

US Court of Appeal rejects Nazi theft claims

The US Court of Appeals for Second Circuit last week affirmed in its entirety the judgment of the District Court in relation to an ownership dispute concerning this 1917 drawing by Egon Schiele known as Seated Woman With Bent Left Leg (Torso):

 

As we reported here, the case was brought by David Bakalar who sought a declaration that he was the lawful owner of the work having purchasing it from a dealer.

On the other side, were Milos Vavra and Leon Fischer who were the heirs to Fritz Grunbaum, a prominent Austrian Jewish art collector, who owned the work before he was murdered by the Nazis in 1941. Vavra and Fischer claimed in the alternative that either (i) the work had been stolen by the Nazis after Grunbaum's arrest in Vienna in 1938 or (ii) the drawing had been stolen from the Grunbaum estate.

The District Court for the Southern District of New York awarded judgment to Bakalar on the basis of laches. In this respect, the Court noted that Vavra and Fischer ancestors' were aware of, or should have been aware of, their potential intestate rights to Grunbaum's property, and were not diligent in pursuing their claims to the work, which meant that Bakalar was Prejudiced in his ability to garner evidence to vindicate his rights in the work. The District Court also found that was not looted by the Nazis.

Vavra and Fischer appealed on the basis that that the District Court committed two errors of law bearing on the laches defense and challenged the finding that Bakalar was prejudiced by their ancestors’ delay in pursuing the work.

The Court of Appeals rejected the appeal in full finding no merit in Vavra and Fischer’s arguments. It held that there was no clear error in the findings that Vavra and Fischer’s ancestors knew or should have known of a potential claim to the Drawing, that they took no action in pursuing it, and that Bakalar was prejudiced in the litigation as a result of that delay. It was therefore sound to recognize Bakalar’s title on the basis of his laches defense.

This is an important decision for the New York art market which favours the rights of dispossessed former owners over the rights of good faith purchasers of stolen property, to ensure there is a balance between both parties' rights. Claims can be made by dispossessed owners, but they need to be made in good time in order not to prejudice the purchasers' ability to defend their rights.

The decision of the US Appeals Court can be found here.

US considers the Artist's Resale Right

The US Copyright Office has published a Federal Register notice of inquiry requesting comments on the resale royalty right.

The summary of the inquiry in the Federal Register notes:

The U.S. Copyright Office is undertaking an inquiry at the request of Congress to review how current copyright law affects and supports visual artists; and how a federal resale royalty right for visual artists would affect current and future practices of groups or individuals involved in the creation, licensing, sale, exhibition, dissemination, and preservation of works of visual art. The Office thus seeks comments from the public on the means by which visual artists exploit their works under existing law as well as the issues and obstacles that may be encountered when considering a federal resale royalty right in the United States.

Comments (which can be submitted here) are due by 5:00pm EST on 5 November 2012.