Art Law Update: Fall 2022
Christopher Hartmann, Untitled (No. 3), 2022. Oil on linen. 140x105cm. © 2022 Christopher Hartmann. Courtesy the artist, Nassima Landau, Art Intelligence Global and T&Y Projects.
Our Summer Briefing reports on recent art law developments from the around the world with insights from our practice.
We begin with a burning question. Damien Hirst’s first non-fungible token (NFT) initiative – wryly titled The Currency – comprised 10,000 NFTs, each corresponding to one of 10,000 similar but unique spot works on handmade A4 paper created in 2016. Launched in July 2021 at a primary price of USD 2,000 per NFT (payable in fiat or crypto currency), Hirst gave collectors a choice: keep the NFT and burn the corresponding physical work; or “burn” the NFT and receive the work on paper. The exchange period closed at 3pm GMT on 27 July 2022 and The Currency’s final composition has been confirmed: 5,149 physical works and 4,851 NFTs.
Totally gonna sell you: The Currency’s final composition of NFTs and Physicals.
As the art market’s appetite for NFTs has perhaps inevitably cooled since the extraordinary US69M Beeple sale in March 2020, the choice may have been harder for some than others. We were monitoring the final stages and over 1,000 NFTs were exchanged for physical artwork in the last 24 hours. Hirst disclosed on Instagram that he holds 10% of The Currency and decided at the last moment to keep all 1,000 as NFTs “to show my 100 percent support and confidence in the NFT world”. Stripping-out Hirst’s 10% momentarily, the public choice was accordingly 5,149 physical works and 3,851 NFTs - or a 57%/43% split. Including Hirst’s holding, the near 50/50 split should allow markets for the NFTs and “Physicals” to develop and it will be interesting to track prices and confidence in each medium now edition numbers are concretised.
Currency by name: this “Physical” recently sold at auction for €47,880
Hirst will be exhibiting the 4,851 works on paper marked for destruction at his Newport Street Gallery from 9 September 2022 and burning (cue: nervous art lawyers) a selection each day until the exhibition closes during Frieze week in mid-October. As Hirst put it in an interview with Stephen Fry: “The whole thing is the artwork”.
Maurizio Cattelan, La Nona Ora (The Ninth Hour), 1999. Mark B. Schlemmer CC BY 2.0.
Crossing the Channel, we recently reported on the proceedings filed in the Paris courts by Daniel Druet - the artist-sculptor commissioned by Maurizio Cattelan and his gallery (Perrotin) to produce nine hyper-realistic wax sculptures which Cattelan incorporated into some of his most famous and highly valued works including La Nona Ora (1999) – shown above featuring Pope Jean Paul II felled by an errant meteor – and Him (2001) portraying a penitent, kneeling Adolf Hitler with child’s body. Produced in an edition of 3 + 1 Artist’s Proof, the AP of Him sold for USD17.2M at Christie’s Bound to Fail sale masterminded by Loïc Gouzer in May 2016. It remains Cattelan’s auction record.
From its Renzo Piano-designed HQ, the Paris Judicial Court’s 3rd Chamber - which specialises in intellectual property disputes - rendered its decision on 8 July 2022. The Court noted that pursuant to article L. 113-1 of the French Intellectual Property Code, the person in whose name an artwork is disclosed to the public is the presumptive author. Since all nine contested works were disclosed to the public in Cattelan’s name, the starting point under French law is that Cattelan is the sole author and it is for Druet to overturn the presumption. Druet filed his proceedings against three French parties: (a) Perrotin; (b) Perrotin’s publishing company, Turenne Editions; and (c) the museum Monnaie de Paris which exhibited four of the disputed works in its 2016/17 show “Maurizio Cattelan: Not Afraid of Love” without crediting Druet. Whilst Cattelan was joined to the proceedings by the museum as a forced intervener under a contractual indemnity, he was not included as a primary defendant by Druet. Since Druet’s claims against the three defendants depend on him proving that he is sole author of the disputed works to Cattelan’s detriment, the Court considered it essential that Cattelan - as the presumptive copyright owner - also be called as a primary defendant by Druet. Absent Cattelan, the Court ruled Druet’s claims were “inadmissible”.
Across the courtyard on the right: La galerie Perrotin at 76 Rue de Turenne
So what does this all mean in practice? Emmanuel Perrotin has said the decision rejects “in every respect the inadmissible and unfounded arguments of Daniel Druet” and “puts an end to this controversy which has threatened a large number of contemporary artists”. As others have noted, this is an optimistic analysis since the Court has yet to consider the key intellectual property question of whether Druet has IP rights in the wax effigies and/or the final works. The Court noted that by framing his claim around the titles of the nine works, Druet was effectively claiming sole ownership of the final artworks as they were staged and disclosed to the public by Cattelan. It remains to be seen whether Druet will now refile and reframe his claim - perhaps seeking sole authorship of the wax effigies alone and/or co-authorship of the final composite works.
Götz Valien, "Paris Bar", Variante 3, 1993–2010
On the subject of co-authorship, we recently reported on the “Paris Bar” paintings which Martin Kippenberger commissioned Götz Valien to paint in 1991 and 1993. Valien made an identical version of the 1991 work in 2010 which he attributed to himself (alone), raising the question of whether the 2010 work infringed copyright in the 1991 work.
We thought it unlikely that the Kippenberger Estate would bring proceedings against Valien. In fact, the opposite has occurred: Valien filed proceedings this month in the Copyright Chamber of Munich’s Regional Court against the Kippenberger Estate which manages Kippenberger’s copyright estate and publishes the artist’s catalogue raisonné. The action seeks to prevent the Estate from exploiting the “Paris Bar” paintings without naming Götz Valien as co-author. Highlighting the art world’s global nature, the press release from Valien’s German lawyers cites the Druet/Cattelan dispute as evidence of “the bad habit… among conceptual artists of refusing to recognize the co-authorship of the actual creators of their works.” We are following the proceedings with our German correspondents with interest.
The UK’s first institutional show of American abstract painter Howardena Pindell (b.1943) opened at Kettle’s Yard in Cambridge this month and will run to 30 October 2022. Represented by Garth Greenan Gallery in New York since 2012 and (jointly) by Victoria Miro Gallery since January 2019, Pindell’s market is on the rise with an early work setting a new auction record of USD1.1M in May 2022.
Prior to joining Garth Greenan, Pindell worked with the N’Namdi Galleries in the US from 1987 to 2006, consigning works over a 20-year period for solo and travelling exhibitions. Pindell filed US proceedings against the N’Namdi Galleries before New York’s Southern District Court in January 2020 alleging they had provided “misleading and inaccurate” information on sales and acted in their self-interest in breach of their fiduciary duties to her. Pindell’s claim referenced the sale of five works by the N’Namdis to a single collector between April 2014 and July 2015 for an aggregate USD 765,000. All five works had been consigned to the N’Namdis by Pindell between 1993 and 2006 and Pindell claimed the gallery should have reported the 2014-15 sales and paid her share of the proceeds. The five works appear to have been acquired on behalf of Pindell/Garth Greenan Gallery.
The N’Namdis defended themselves robustly. They called Pindell’s claim “a classic case of seller’s remorse” where the artist sought to recover earlier work to resell at today’s prices. The N’Namdis argued Pindell’s claims were time-barred and that – in any event – they had sold Pindell’s work on the primary market at the then prevailing market prices and paid her the agreed percentage. According to the N’Namdis, all subsequent sales (including the five sales in 2014-15) were secondary market consignments from the collectors to whom the works were originally sold. Pindell settled her claims against the N’Namdis in December 2021. Her claim against a collector called Arthur Primas for the recovery of three works which he acquired from the N’Namdis at an alleged deep discount remains pending, engaging the law of agency and an agent’s ability to convey title to a third party where they (allegedly) exceed the authority from their principal.
Pindell’s claim highlights the legitimate question of who benefits from an artwork’s increased value on the secondary market. Whilst a modest Artist Resale Right capped at €12,500 has applied to secondary market sales by art market professionals in the UK and EU since 2006, it only applies to artists who are UK or EEA nationals. As a US citizen, Pindell would not therefore benefit if her work is sold by a dealer or auction house in the UK or EU. Where an artist’s market rises steadily over the course of a career, artists and their dealers can benefit from rising secondary prices in real time by adjusting primary prices upwards. This avenue is of course less available for artists like Pindell whose work attains significant value at a later stage.
Pindell filed her New York proceedings against the N’Namdis as her fellow abstract painter Frank Bowling (b.1934) was preparing to file his proceedings in the UK High Court against Hales Gallery. An ocean apart, the two cases bear some similarities. Both artists are experiencing long-overdue institutional and market recognition following the sustained support and investment of their galleries; and both artist/dealer duos operated on the basis of oral (i.e. unwritten) representation agreements based on their course of dealing, email correspondence and in-person conversations which left the door open for misunderstanding of the legally binding terms.
Court filings reveal that a key area of dispute between Bowling and Hales became whether Hales was obliged to disclose the details of collectors to whom work was sold. Hales considered such disclosure was never part of the agreement (which began in 2010 or 2012) and Bowling sought to terminate the representation in 2019 on account of Hales’ alleged breach. Hales alleged Bowling and his family were acting in bad faith to replace them as primary gallery without an appropriate notice period in favour of a larger gallery to navigate the Bowling family’s succession plan. Hauser & Wirth announced their representation of Bowling in October 2020. We understand Hales and Bowling reached a confidential settlement by mediation.
In our experience, most artist/dealer disputes arise from misunderstanding rather than bad intentions. The proceedings filed by Pindell and Bowling certainly highlight the value of reaching agreement on - and writing down - key commercial terms such as pricing, discounting, buyer disclosure and the ability of each party to end the agreement. Provisions to encourage the private resolution of disputes (for example, by mediation) can save significant time and cost. Given the inherent newsworthiness of art disputes, they may also avoid the public disclosure of private matters.
Finally, we have previously reported on the UK’s anti-money laundering (AML) regime for “art market participants” (AMPs) trading in works of art above the €10,000 threshold. The UK government-approved British Art Market Federation Guidance on Anti-Money Laundering published in early 2020 has just been updated and is available here. Phillips’ Chief General Counsel Martin Wilson has written an insightful summary of the practical changes with one of the leading experts in this field Rakhi Talwar which we encourage AMP readers to review (the leading auction houses have been ahead of the AML curve for some years now). For our readers in London, Phillips will be hosting the London Committee seminar of the Responsible Art Market on Wednesday 21 September 2022. It would be great to see you there.
Please get in touch if you have any questions or would like copies of any of the publicly-available Court documents or decisions described above.
This briefing and any information accessed through the links is for information only and does not constitute legal or any other professional advice. Legal advice on your particular circumstances should be sought before taking or refraining from any action. Art Law Studio Ltd is a specialist art law firm advising artists, advisors, collectors and dealers on contracts, copyright and disputes.
