Will the Real Andy Warhol Please Stand Up?

It can be difficult to establish the authenticity of artwork by Andy Warhol, a pop artist credited with more than 100,000 mass-produced images of soup cans, celebrities, and coke bottles. As a result, there is increasing litigation over whether particular Warhol works of art are real or fake.

Warhol’s silk-screen technique allowed for rapid and repeated production of artwork. Warhol—who questioned whether art was different from any other commercial commodity—had virtually no sustained involvement in the production of his art by the 1970s; he allegedly called this “art by telephone.” Dozens of assistants helped Warhol produce his art at a studio called “The Factory.”

In 2005, John Malanga, a former Warhol assistant, sued art-collector John Chamberlain who had obtained authentication for a purported Warhol painting titled “315 Johns” and subsequently sold the work for $3 million. Malanga asserts the painting is not a genuine Warhol. The lawsuit has been winding its way through court since 2005 and will finally head to trial next month.

Warhol’s factory-produced art raises difficult questions for those seeking to buy and sell “genuine” Warhol artwork. One key issue that will likely arise during the upcoming litigation over “315 Johns” is an opinion from the Andy Warhol Art Authentication Board, Inc. (Board), a non-profit entity formed after Warhol’s death, that the painting is a genuine Warhol. The Board’s determination was required before the multi-million dollar sale could proceed.

Major financial decisions in the art world are based on the opinions of those who authenticate works of art because art authentication directly affects artworks’ monetary value. As a result, the Board has been the subject of several lawsuits and critical articlesPorcella v. Time, Inc., explained that art authentication also generates controversy because there is “no governmental control of this profession, or requirements that a diploma or other authorization from any seat of learning . . . [be] held.”

Art authentication boards are not always the final word on art authenticity. The living artist is, of course, the most qualified expert on authenticity. The European legal doctrine droit moral provides artists with a hereditary right to disavow a work and the right to paternity (including the right to have a name associated with the work). For example, Marguerite Duthuit, the daughter of Henri Matisse, issues certificates of authenticity for Matisee’s works under French law of droit moral. In the United States, the Visual Artists Rights Act provides a similar right to claim or disclaim authorship. Nevertheless, droit moral is not conclusive on a trier of fact in the United States.

Many authentication boards are short-lived, which can reduce accountability to art collectors and increase exposure to liability. The Pollock-Krasner Authentication Board, founded by Jackson Pollock’s widow, Lee Krasner, dissolved in the late 1990s, after ongoing litigation with dissatisfied art collectors told their paintings were not genuine. The Comite Picasso, a group of art experts and members of Picasso’s family, formed to make definitive assessments of the authenticity of Pablo Picasso artwork, but broke up after Picasso’s daughter refused to participate.

Recent decisions may signal the emergence of a new antitrust cause of action against authentication committees who deny the authenticity of submitted artwork. In 2009, Simon-Whelan v. The Andy Warhol Foundation became the first lawsuit based on antitrust allegations to survive the defendant’s motion to dismiss. Art collector Joe Simon-Whelan alleged the Board was denying authenticity of Warhol artwork to cause scarcity in the sub-market for Warhol artwork and to inflate the value of the art collection owned by the Andy Warhol Foundation for the Visual Arts, Inc. Thome v. The Alexander & Louisa Calder Foundation affirmed the dismissal of a lawsuit against the Calder Foundation authentication committee that had denied authenticity of works allegedly by Alexander Calder. In distinguishing the case from Simon-Whelan, the court left the door open to further antitrust claims and provided a roadmap for how to survive  motions to dismiss.

YouTube has an interesting BBC documentary on the difficulties of authenticating Warhol artwork and the background of the Simon-Whelan litigation. Here are additional resources on legal issues surrounding authentication of Andy Warhol artwork and authentication generally:

Gareth S. Lacy is publishing a forthcoming article in the Washington Journal of Law, Technology & Arts, analyzing the issue of antitrust liability for organizations that issue opinions on the authenticity of artwork. The article discusses how antitrust law governing standards-setting and certification outside the art world could also apply to art authentication practices.

Is your “exclusive license” really “exclusive?”

Credit: Federal Circuit Website

In WiAV Solutions LLC v. Motorola, Inc. (Fed. Cir. 2010), the United States Court of Appeals for the Federal Circuit (CAFC) recently defined the term “exclusive” in patent licensing agreements to mean a party who holds any exclusionary rights to the patent, rather than sole exclusionary rights.  The precise definition of exclusivity is critical because only exclusive licensees have standing to sue for patent infringement.

The issue arose when WiAV Solutions, LLC alleged it was the exclusive licensee of seven patents owned by Mindspeed Technologies, Inc. and sued multiple companies including Motorola, Inc., Nokia Corporation, Palm, Inc., and Sony Ericsson Mobile Communications, Inc. for infringement of the Mindspeed patents.

The district court held WiAV was not an “exclusive licensee” under Textile Productions, Inc. v. Mead Corp. and therefore lacked constitutional standing enforce the patents–because the original owner of the Mindspeed patents had assigned the patents and a subsidiary of the assignee had received a limited, non-exclusive license. Because licensees other than WiAV retained a limited licensing right, WiAV could not be an exclusive licensee.

CAFC reversed the district court decision and held “a licensee is an exclusive licensee of a patent if it holds any of the exclusionary rights that accompany a patent.”  WiAV did not lose its constitutional standing to sue for infringement just because its exclusive license was subject to certain rights and limitations in existence at the time of the license.

CAFC reasoned that a party may hold one or more exclusionary rights, such as an exclusive licensee, and as long as that party suffers a legally cognizable injury when an unauthorized party uses its rights, there is standing to sue.  Thus the test of legal standing for patent infringement suits is whether a party can prove it has any exclusive right to a  patent, and suffers legal injury because others violate that right.

CAFC further reasoned that a superior right of exclusion is also a key factor for determine exclusivity: “[d]epending on the scope of its exclusionary rights, an exclusive licensee may have standing to sue some parties and not others…[i]f an exclusive licensee has the right to exclude others from practicing a patent, and a party accused of infringement does not possess, and is incapable of obtaining, a license of those rights from any other party, the exclusive licensee’s exclusionary right is violated.”

Therefore, CAFC held that “an exclusive licensee does not lack constitutional standing to assert its rights under the licensed patent merely because its license is subject not only to rights in existence at the time of the license but also to future licenses that may be granted only to parties other than the accused.” CAFC concluded that none of the preexisting licenses gave the Defendants the right to practice the patents in WiAV’s field of exclusivity, and therefore reversed the district court decision.

Nevertheless, CAFC retained a limitation on this broad rule of standing by stating that “[b]ecause an exclusive licensee derives its standing from the exclusionary rights it holds, it follows that its standing will ordinarily be coterminous with those rights.” CAFC gave two examples of situations in which an exclusive licensee would still lack standing. First, if the party being sued held a preexisting license under the patent to engage in the allegedly infringing activity, there would be no standing to sue that party. Second, an exclusive licensee would lack standing to sue a party who could obtain such a license from another party with the right to grant it. The key point is that an exclusive licensee must have an exclusionary right with respect to the alleged infringer in order to have standing to sue.

Government Seizes File-Sharing Domain Addresses

The United States Immigration and Customs Enforcement (ICE) recently seized a number of website domains that were purported to contain pirated or counterfeited products.  The seized domains, like http://www.torrent-finder.com, now display the following message:

“This domain name has been seized by ICE — Homeland Security Investigations, pursuant to a seizure warrant issued by a United States District Court under the authority of 18 U.S.C §§ 981 and 2323.”

Chapter 18 U.S.C §981 and §2323 both govern civil forfeiture.  Other sites that were targeted include onsmash.com, rapgodfathers.com, dajaz1.com, burberryoutletshop.com, cheapscarfshop.com, dvdcollectionsale.com, handbagcom.com, mydreamwatches.com, sunglasses-mall.com, and usaoutlets.net.

The message from ICE that is now displayed on the seized domain names warns about the penalties for willful copyright infringement and knowingly trafficking counterfeit goods, and it cites the pertinent United States Code sections.  The laws governing punishment for copyright infringement include 17 U.S.C. § 506, criminal offenses, and 18 U.S.C § 2319, criminal infringement of copyright.  The law governing punishment for trafficking in counterfeits is 18 U.S.C § 2320, trafficking in counterfeit goods or services.

ICE performed a similar domain name seizure in June as part of “Operation in Our Sites,” an initiative against Internet counterfeiting and piracy.  A spokeswoman for ICE would not comment [Insert link] on whether the recent domain seizures were also part of the Operation.

The recent domain seizures coincide with the Combating Online Infringements and Counterfeits Act making its way through Congress. The bill, which was approved by the Senate, would allow the government to shut down sites that are “dedicated to infringing activities.”  All of these developments reflect the U.S. government’s current focus on keeping America’s biggest export–intellectual property–safe and profitable, especially in the current economic climate.

For more information on the recent domain seizures, see the following stories:

D.C. Circuit Denies Petition to Rehear GPS Warrantless Tracking Case

Washington D.C. — On Friday, November 19, 2010, a divided U.S. Court of Appeals for the District of Columbia issued an order rejecting the U.S. Justice Department’s request for an en banc review of an August ruling requiring law enforcement authorities to get a warrant before using GPS devices to track a suspect.

On August 6, 2010, a three-judge panel of the D.C. Circuit Court unanimously overturned Antoine Jones’ life sentence on the ground that law enforcement authorities had violated Jones’ Fourth Amendment right to privacy by attaching a GPS device to Jones’ car without a warrant and using that device to track him for four weeks. The court’s August ruling can be found here.

Antoine Jones, a D.C. area nightclub owner, was arrested for drug possession after police attached a GPS tracking device to his vehicle. Local authorities had monitored Antoine Jones for a month without a warrant before they nabbed him. Judge Ginsburg in his decision wrote that “[a] reasonable person does not expect anyone to monitor and retain a record of every time he drives his car, including his origin, route, destination, and each place he stops and how long he stays there; rather, he expects each of those movements to remain disconnected and anonymous.”       

The U.S. Justice Department asked the full D.C. Circuit to reconsider the case, but the request was denied by a 5-4 majority. The court’s order denying the request can be found here.

Chief Circuit Judge David Bryan Sentelle, writing for the court’s four dissenters, complained that the panel’s ruling is inconsistent with other appellate court decisions as well as “controlling Supreme Court precedent.” Chief Judge Sentelle referred to United States v. Knotts, 460 U.S.  276 (1993) (found here) as the controlling Supreme Court precedent inconsistent with the panel’s decision.

In Knotts, the Supreme Court reviewed a case in which law enforcement officers placed a radio transmitter inside a chloroform container that was subsequently sold to Armstrong, who law enforcement authorities believed was purchasing chloroform to manufacture illegal drugs. Armstrong placed the chloroform in his car and authorities used both visual surveillance and the monitoring of the radio transmitter to track Armstrong to his secluded cabin in Wisconsin. After three days of intermittent visual surveillance of the cabin, the authorities secured a search warrant, discovering the chloroform container and other chemicals and formulas used for creating methamphetamines inside the cabin. The Supreme Court held that the radio transmitter’s signals did not invade any legitimate expectation of privacy on behalf of Armstrong, and therefore there was neither a search nor seizure within the contemplation of the Fourth Amendment. 

Chief Judge Sentelle stated that “[E]verything the Supreme Court stated in Knotts is equally applicable to the facts of the present controversy,” noting that the tracking of movements with a radio transmitter is immaterially different from tracking someone with a GPS device. He further notes that there cannot be an invasion of privacy without a reasonable expectation of privacy, and since Jones was driving on public roads, there was no reasonable expectation of privacy, and therefore no invasion of privacy. 

Chief Judge Sentelle also refers to three circuit court decisions in which the courts did not recognize the tracking of suspects through GPS surveillance as a search. See United States v. Garcia, 474 F.3d 994 (7th Cir.), cert denied, 128 S.Ct. 291 (2007), found here; United States v. Marquez, 605 F.3d 604 (8th Cir. 2010), found here; United States v. Pineda-Moreno, 591 F.3d 1212 (9th Cir. 2010), found here.

Fired for a Facebook Post? The NLRA and Internet Communications

The National Labor Relations Board (NLRB) recently accused an ambulance service company, American Medical Response of Connecticut (AMR), of illegally firing one of its employees on the basis of her Facebook activity. The labor law community considers this case to be ground-breaking because of its potential for setting precedent in the critical battle over the survival of unionization in the American workplace.

AMR terminated the employee, Dawnmarie Souza, for breaking a company rule against “depicting the company in any way” on an Internet site featuring the employee’s picture. The alleged “depiction” in this case was several disparaging, mocking, and profane remarks Souza made on her Facebook page about her supervisor who would not allow a union representative to help Souza respond to a customer who complained about her. The NLRB alleged AMR violated NLRA laws prohibiting employers from punishing employees for discussing working conditions among themselves. In particular, NLRB argues the AMR company policy prohibiting employees from making disparaging or discriminatory comments when discussing the company or the employee’s superiors and co-workers violates Section 8(a)(1) of the NLRA.

Online organizing and activities are key issues in today’s labor movement. The presence of organized labor in the U.S. has declined over the past five decades from about 35 percent of the work force during the 1950s to 12.5 percent in 2005, including only 7.8 percent in the private sector. Labor unions, realizing that handing out leaflets and calling on employees will not succeed in organizing the modern generation of employees, have been utilizing emerging electronic technologies to augment these traditional tactics. For example, labor organizers are now using blogs and social networking sites to publicize their causes and inform, educate, and enlist non-union employees about the importance of unionization. The increasing influence of these sites, as well as efforts of employers to counteract this influence, raise issues related to employees’ rights to collectively bargain under the National Labor Relations Act (NLRA).

If the facts presented by AMR show reasonable grounds for dismissal, the judge may dismiss the case at summary judgment and thus never resolve whether the employee should have been allowed to post her work-related comments to her Facebook page. On the other hand, if AMR cannot prove that its decision to fire Souza was justified, the court may rule against the employer for an unfair labor practice (ULP) under Section 8(a)(1) of the NLRA for constraining concerted action among employees to discuss work conditions.

Although Section 8(a)(1) of the NLRA protects the  employee’s Section 7 right to “engage in . . . concerted activities for the purpose of collective bargaining”, this right is not without bounds. The NLRB, in its Atlantic Steel board decision, established a four-factor balancing test to determine whether employee speech is protected under the NLRA: “(1) the place of the discussion; (2) the subject matter of the discussion; (3) the nature of the employee’s outburst; and (4) whether the outburst was, in any way, provoked by an employer’s unfair labor practice.” In Media General Operations, Inc. v. NLRB, the NLRB held the defendant in violation of NLRA Section 8(a)(1) for having fired an employee because of an outburst he made to his supervisor. The Fourth Circuit overruled based on the third NLRB balancing factor, holding that the employee’s outburst was sufficiently “profane and derogatory” that he had “forfeited the protections of the NLRA.”

An administrative law judge is scheduled to begin hearing the case on Jan. 25, 2011. Regardless of the outcome of this case, the NLRB and the courts will continue their efforts to balance the right of employees to collectively bargain with the right of the employer to further its economic interests. Therefore, the field of labor law will likely have several opportunities in the near future to develop the legal boundaries between Internet communication that comprises protected labor organization activity and that which is libelous, disloyal, or otherwise damaging behavior not protected under the NLRA.