“You can sue for that?”

Flying under the radar with some of intellectual property’s most obscure claims

Last spring, my firm was settling a case brought under the Visual Artists Rights Act, 17 U.S.C. § I06A. We obtained a $1.1 million settlement for our client, artist Kent Twitchell, whose 70-foot mural had been painted over on a building owned by the federal government.

After the settlement was complete, I was talking about the case with my friend, Kevin Boyle, of plaintiff’s firm Panish, Shea & Boyle, LLP. I expressed some doubt that ilie amount of the settlement was sufficient to drive home the point of artist protection to building owners in the future. Kevin’s response was both blunt and eye opening. He said, “That do you mean? You got over $1 million because the government painted its own wall.”

To me, this reaction starkly highlights the differences between being a plaintiff’s attorney and an intellectual property attorney. I was worried about the protection of an abstract right that few people even know about, much less understand. But in the world of the plaintiff’s attorney – where clients can have broken bones, missing limbs or, at the very least, soft tissue injuries and injured careers – it is remarkable to obtain a seven-figure settlement for something as seemingly intangible as a mural. Moreovel~ obtaining such a settlement is not something to ponder endlessly; it is something to celebrate and enjoy, and then move on.

The plaintiff’s lawyer and the IP lawyer have much to learn from each other. Last year, I actually tried a plaintiff’s IP case with Panish, Shea & Boyle, and working around such seasoned trial lawyers, I learned a lot about trying a case. However this is a magazine largely for plaintiff’s attorneys; you don’t need another article on trying a case, especially from someone who tries comparatively few. But you may benefit h-om an explanation of some of the obscure intellectual-property rights floating around the ether every day. Like in law school, you don’t want to miss an issue. In the real world, such an oversight means more than missing a good grade – it means missing a case.

Lately, I’ve worked on two major pieces of IP litigation on the plaintiff’s side, and I’ve learned about some other laws that surprised me. There are a variety of intellectual-property rights that do not make the headlines. We all hear about the major patent verdicts and copyright claims. For a plaintiff’s attorney, these cases are hard to get, as more defense firms seek a piece of the action, and they can be very expensive to pursue. But plaintiffs’ intellectual property is not solely the province of big firms trying to cash in. A variety of claims can be brought that are off the beaten path, and also serve to level the playing field as the plaintiff is less likely to run into a defense team that spends its time litigatin similar cases. Some of these issues are explained below.

The Visual Artists Rights Act

The case mentioned above, Twitchell v. West Coast General, et al., involved a six-story-tall figure of Los Angeles artist Ed Ruscha, which was painted over a nine-year period by Kent Twitchell. Many people know TwitcheLl for his portraits of musicians located above the 110 Freeway in downtown Los Angeles. The mural in our case, The Ed Ruscha Monument CERM”), was considered by some to be more artistically important because it depicted an artist from Los Angeles and represented a major work done directly on concrete (the musicians were transferred from studio paintings).

Using a hyper-realist technique, Twitchell painted the mural with a small watercolor brush, guided by photos that he took. He hung his own scaffold each day and even paid for his own parking. The mural had appeared in many books and articles and was world famous, despite its somewhat out-of-the-way locale in downtown Los Angeles at the intersection of Olympic and Hill. Yet on June 2, 2006, contractors unceremoniously painted over the ERM.

Just under two years after the mural’s destruction, a group of defendants including the U.S. government, agreed to pay $1.1 million to settle a lawsuit brought by Twitchell. The lawsuit accused the defendants of violating

Twitchell’s rights under the federal Visual Artists Rights Act (YARA), passed by Congress in 1990, and the California Art Preservation Act (CAPA, found at Civ. Code, § 987). Both statutes require, among other things, that artists must be given 90-days advance notice before a property owner can take any action that may destroy or damage a qualifying work of art.

The law

Both VARA and CAPA provide that if qualifying artwork is freestanding, such as a piece of sculpture that is not part of a building, intentional damage or destruction is most likely prohibited – even if the property owner owns the artwork. This may seem odd, but these laws deal with “moral rights,” which are more like bullet points on a resume than property rights. The artist has a right to protect his or her reputation via protection of the right of “integrity” (i.e., avoiding defacement of the work) and the right of “attribution” (i.e., having the work associated with the author). Destroying or mutilating a piece of art affects the artist’s reputation forever, regardless of who owns the art.

Who is protected and what rights are protected?

VARA creates rights for “the author of a work of visual art.” The Copyright Act does not define “author” but does define a “work of visual art” at 17 U.S.C. § 101. The definition is specific and includes what most of us would call “art.” It also imports the substantial body of copyright law on the question of works for hire, which are not “works of visual art.”

CAPA does not incorporate the work for hire concept, but it excludes some commercial works. CAPA provides rights to an “artist,” who is an “individual or individuals who create a work of fine art.” (Civ. Code, § 987(b)(l).) A “work of [me art” “shall not include work prepared under contract for commercial use by its purchaser.” (Civ. Code, § 987(b)(2).) Finally, “commercial use” means fine art created under a work-for-hire arrangement and for use in advertising, magazines, newspapers, or other print and electronic vmedia. (Civ. Code, § 987(b)(7).)

What rights are protected?

VARA and CAPA protect slightly different rights. The most important distinction relates to the right to prevent damage or destruction of the work. Seemingly similar, these provisions may be quite different.

VARA does not explicitly include rights against those who authorize the damage, as contrasted with those who perform the intentional acts. Also, VARA differentiates between works of visual art and such works which also are of “recognized stature.” A literal reading ofVARA protects against intentional distortion, mutilation or other modification of a work of visual art generally, but not the destruction thereof; only works of “recognized stature” are protected against intentional or grossly negligent destruction. There is no comparable dichotomy in CAPA. To be a work of fine art under CAPA, the work has to be of “recognized quality,” which can be subject to expert and artist opinion. (Civ. Code, § 987(£).)

Effective dates and duration of rights

VARA and CAPA provide rights of different duration, with different effective dates. CAPA applies regardless of when the work was created, as long as the acts occurred on or after January I, 1980. (Civ.Code, § 987U).) CAPA has a single term, which expires on “the 50th anniversary of the artist’s death.” (Civ. Code, § 987(g)(l ).)

VARA, on the other hand, applies to works created after its effective date of June I, 1991, and works created before that date but title to which had not, as of that date, been transferred from the author. Rights for works after the effective date endure for the life of the author. Rights for works created before the effective date, endure the same length as a copyright, which is now life of the author plus 70 years. (17 U.S.C. § 106A(d); 17 U.S.C. § 302(a).)

Remedies

Because VARA is part of the Copyright Act, remedies are basically the same as for copyright infringement, though a detailed determination must be made of the effect on the violation to the artist’s reputation. (17 U.S.C. § 501.) This is expensive and requires expert opinion into the abstract question of the effect of an absence from the artist’s resume.

CAPA is self-contained and provides for injunctive relief; actual damages; punitive damages (to be paid in judicial discretion to an organization engaged in charitable or educational activities involving the fine arts); reasonable attorneys’ fees and expert witness fees; and “any other relief which the court deems proper.”

Final recommendations on VARA and CAPA

If you ever represent a plaintiff who has had their rights violated under the moral rights’ statutes, there are several other points to seriously consider. First, bring suit under both VARA and CAPA. It is difficult to know at first which will apply, and VARA’s federal preemption clause is not clear. Further, CAPA provides better remedies. Second, bring state tort claims as well, like conversion. We brought a conversion claim in the Twitchell matter and the Court found that it was not preempted. Finally, damages are difficult to calculate because they may be partly based upon the artist’s reputation. Keep track of your time because both statutes allow for attorneys’ fees.

Protections for consumers of art

Several laws provide consumer protections regarding the authenticity of art and collectibles. One such law is Civil Code sections 1740 et seq. providing for the authenticity of fine art prints for sale at $100 or more. This law was recently the subject of a publicized class action suit against the Los Angeles Museum of Contemporary Art (MaCA).

In the suit, MaCA was charged with selling art prints without the required certificates of authenticity. The fines for violating the authenticity statute can be severe: up to $1,000 per incident with possible trebling of damages.

Under Civil Code section 1742, an art dealer cannot sell or consign a “multiple” unless a certificate of authenticity is provided before the sale. A “multiple” is defined as a “fine print, photograph (positive or negative), sculpture cast, collage, or similar art object produced in more than one copy.” A “fine print” is produced by “engraving, etching, woodcutting, lithography, and serigraphy” as well as multiples produced by photographic means. (Civ. Code, § 1740.)

The contents of the certificate of authenticity are identified in Civil Code section 1744. Under that section, the certificate of authenticity must state, generally: (i) the artist’s name; (ii) if the artist’s name appears on tlle multiple, an explanation of whether it was signed or how the name got there; (iii) a description of the medium or process through which the multiple was produced; (iv) if the multiple or sculpture represents a reproduction from a different medium, a statement establishing the different media; (v) if (iv) applies and the multiple is unsigned, a statement ofwhether the artist approved the multiple; (vi) if the author was dead when the multiple was made, a statement establishing this; (vii) if applicable, a statement that the master was created during the artist’s life and multiple after death; (viii) applicable statements if the multiple was created from prior limited editions or multiples; (ix) as to multiples created after 1949, a statement of the year or approximate year it was produced (before 1950, a statement of the year or period when the particular master was made is sufficient); (x) whether the multiple is part of a limited edition, statements regarding the edition size and use of the artist’s signature; and (xi) whether the master has been destroyed or altered after the current edition.

Any dealer or dealer consignee who sells or offers to sell a multiple without a certificate of authenticity or provides untrue information related to authenticity must refund the purchase price and pay interest in exchange for return of the print. If the acts or omissions were willful, the amount paid for the print will be trebled. The prevailing purchaser may also be entitled to attorneys’ fees and expert fees. Violators may also be liable for a civil penalty of $1,000 per incident.

In the recent class action brought under the statute, the plaintiff (a Los Angeles art collector) alleges that the Los Angeles Museum of Contemporary Art and Louis Vuitton North America were responsible for a failure to follow Section 1740. The Plaintiff bought prints at an exhibition by Japanese artist, Takashi Murakami. The prints depicted Louis Vuitton handbags that were designed by Murakami; the intent of the prints was to show the intersection of Murakami’s artistic work with commerce. Two limited edition prints costing $6,000 each were signed but not numbered, although the certificates of authenticity indicated the prints were numbered. Two other prints selling for $855 each, came with no certificates of authenticity.

A similar statute in federal court warranting mention is the Indian Arts & Crafts Enforcement Act of 2000, codified at 25 U.s.c. section 305e. This Act operates essentially as a false advertising law directed at protecting Native Americans, except that it contains much more explicit and harsh damages provisions than found in the Lanham Act. Under Section 305e, a civil action may be brought against anyone who “directly or indirectly, offers or displays for sale or sells a good, with or without a Government trademark, in a manner that falsely suggests it is Indian produced, an Indian product, or the product of a particular Indian or Indian tribe or Indian arts and crafts organization.” The suit may be brought by the Attorney General or “(B) by an Indian tribe on behalf of itself, an Indian who is a member of the tribe, or on behalf of an Indian arts and crafts organization; or (C) by an Indian arts and crafts organization on behalf of itself: or by an Indian on behalf’ of himself or herself.”

Violation of Section 305e imposes strict liability for each commercial transaction involving a “false suggestion” that merchandise was manufactured by Indians. (Native American Arts, Inc. v. Village Originals, Inc. (N.D. Ill. 1998) 25 F.Supp.2d 876.) Damages include the greater of: treble the gross profits earned by the defendant “as a result of the activities found to violate the subsection” or “in the case of each aggrieved individual Indian, Indian u-ibe, or Indian arts and crafts organization, not less than $1,000 for each day on which the offer or display for sale or sale continues.” Finally, the punitive damages and attorneys’ fees are expressly provided for under the statute. One court has found that the punitive damages language is not unconstitutionally vague. Punitive damages provision of Indian Arts and Crafts Act (IACA) was not unconstitutionally vague, although statute did not spell out standards for such an award; act did not call for excessive damages, but merely authorized their award. (Native American Arts, Inc. v. BundyHoward, Inc. (N.D.Il1.2001) 168 F.Supp.2d 905.)

Trademark reverse confusion

Finally, I will make a short mention of trademark reverse confusion. “Reverse confusion” is a doctrine of trademark law whereby a small company using a trademark (registered or unregistered) has a cause of action against a larger company that enters a similar market using a similar mark.

The theory is that the small company with superior trademark rights will fall into the “shadow” of the larger company with more marketing muscle, and consumers will come to believe that the small company is actually the second in the market.

This theory of liability should become increasingly viable as the Internet “converges” with other media. Companies and services that used similar marks but were previously separatedby locale or business may now be put side-by-side via the Web, thus increasing the potential for trademark confusion. As the Ninth Circuit has stated: “[w]hereas in the world of bricks and mortar, one may be able to distinguish easily between an expensive restaurant in New York and a mediocre one in Los Angeles, … the Web is a very different world.” (GoTo.com, Inc. v. Walt Disney Co. (9th Cir. 2000) 202 F.3d 1199, 1206-07.)

Last year, I was co-counsel with Panish, Shea & Boyle on a reverse confusion trial. I have written a separate article on the trial, with some tips on how to approach such a case. That article appears in the August / September edition of the CAOC’s Forum magazine. Rather than copy my own article, I will summarize some of the highlights below.

First, remember: the key to trademark law is use in connection with a good or service. Trademark rights begin the moment such use begins. The strength of those rights is determined by the extensiveness of the use and arbitrariness of the mark. A trademark registration will give the user stronger rights nationally, but an unregistered mark can be just as strong if it is supported by strong customer recognition, advertising and national use.

Second, trademark infringement turns on a “likelihood of confusion.” In the Ninth Circuit, likelihood of confusion is assessed under the so-called “Sleekcraft factors,” drawn from the decision in AMF Inc. v. Sleekcraft Boats (9th Cir. I979) 599 F.2d 341, 348 -349. (Trademark cases can be brought in state court as well, though the wisdom of doing so varies with every case, and cases involving federally registered marks can be removed to federal court.)

Sleekcmft requires that, when assessing likelihood of confusion, the following factors be considered:

• strength of the mark;
• proximity of the goods;
• similarity of the marks;
• evidence of actual confusion;
• marketing channels used;
• type of goods and the degree of care likely to be exercised by the purchaser;
• defendant’s intent in selecting the mark; and
• likelihood of expansion of the product lines.

Reverse confusion was first recognized in the Ninth Circuit’s Dreamwerks case, wherein the Court reversed a defense summary judgment for the first Dreamwerks, a small company that put on “Star Trek” conventions. (Dreamwerks Production Group, Inc. v. SKG Studio (9th Cir. 1998) 142 F.3d 1127, 1130.)

Finally, here are key strategic considerations when pursuing a reverse confusion case for the Plaintiff:

• Consider the injunction your chief remedy
  In reverse confusion, damages are difficult to prove. This is because the larger company is really snuffing out the potential of the small company. However, even though damages are hard to prove in reverse confusion, a finding of inh-ingement will almost certainly result in an injunction. If you are dealing with a large company and advertising budget, the company should be willing to come forward with a reasonable settlement to protect its name.
• Simplify the case for the court
  With eight factors, trademark cases are difficult to try. Reverse confusion is even more difficult. But a “David vs. Goliath” story lends itself nicely to a reverse confusion case. Also, be aware that typical trademark jury instructions can be tweaked for the reverse confusion scenario. Do the research and deal with instructions early.
• Bifurcation is preferred
  Oftentimes, a plaintiff’s attorney will resist bifurcation of liability and damages on the idea that it is good to get the damages evidence before the jury in the first phase. This is not a good strategy in reverse confusion. The plaintiff will look like it is “swinging for the bleachers” on damages against a large rival. Bifurcation wi1l save tedious expert testimony for later in the case, and it will alleviate the plaintiff’s attorney from having to worry about asking for too much in damages.

Claims based on state law causes of action

As seen by the use of “title” in the discussion of the mural case above, the federal VARA law appears to distinguish between title and possession of a work of art, in the traditional manner of personal property. Indeed, in the Twitchell case, we brought a claim for conversion, and the Court denied a motion to dismiss and agreed with us that there exists a distinct property right in the mural itself, in addition to copyright and other rights. We were even able to show that it may be possible to move the mural through the use of techniques originally devised for moving frescoes in Venice.

Thus, a plaintiff’s attorney should always remember to search for common-law claims in any intellectual property case. For instance, California has a comprehensive trademark statute Uust updated last year), although patent and copyright laws are generally preempted by federal statute. However, several common-law claims are typically brought in conjunction with intellectual property cases, including: common law unfair competition (as distinguished from Section 17200 unfair competition) in a trademark infringement case because punitive damages are available under the common law; breach of implied contract or conversion in an idea theft case (because copyright protection can be very narrow); interference with contract or business advantage in any intellectual property case involving a market of third parties; unauthorized use of another’s name, voice, signature, photograph or likeness in advertising (Civ. Code, § 3344), and, of course, a Section 17200 claim in any case (at least for the prospect of injunctive relief).

Conclusion

Intellectual-property law is not just a playground for the big law firms. Many of the skills developed in representing plaintifTs transfer over to intellectual property cases, especially the ability to present an effective “David vs. Goliath” case. Moreover the plaintiff’s lawyer should be aware that many protections exist for rights that go beyond the typical big federal patent, copyright and trademark cases that appear in the media headlines. I hope that by reviewing some of the claims and remedies discussed in this article, the plaintiff’s attorney will be made aware of these and related issues to explore when a client comes through the door.

By Eric Bjorgum, first published in The Advocate (Jan. 2009).