Your Browser Does Not Support JavaScript. Please Update Your Browser and reload page. Have a nice day! August 2023 – Center for Art Law

U.S. v. Wendy Halsted Beard, 2:22−mj−30439 (E.D. Mich. filed Oct. 12, 2022). 

Wendy Halstead Beard, a former art dealer in Birmingham, Michigan accused of defrauding ten customers, pleaded guilty to one count of wire fraud as part of her plea deal on July 13, 2023, . Beard was entrusted with selling fine art photographs on consignment, the entire collection valuing over 1.5 million dollars. She sold the photos and kept the proceeds for herself, without informing  the original owners that the photographs had been sold. Beard allegedly created elaborate lies to avoid telling the owners about the sales. For example, Beard falsely claimed (via communications from fake email accounts, posing as her assistants)  to be undergoing a lung transplant or being in a coma, to avoid communications with the owners. One customer was especially vulnerable due to their advanced age and Alzheimer’s disease. Sentencing is set for December 2023. Read the complaint here and read more here. (DS)

Alexis Hunley et al. v. Instagram LLC, No.22-15293 (9th Cir., February 6, 2023).

The U.S. Court of Appeals for the Ninth Circuit has sided with Instagram over two photographers who accused the company of copyright infringement for permitting websites to embed their posted photos. The plaintiffs, Alexis Hunley and Matthew Scott Brauer, both of whom have public profiles, granted Instagram a royalty-free license to display photographs that they post, pursuant to the platform’s terms of use. Although Instagram does not grant third parties a license to users’ works, its technology permits third parties to embed public posts.  Hunley and Brauer sued Instagram, stating they wanted the case to become a class action on behalf of copyright owners whose work is “caused to be displayed via Instagram’s embedding tool on a third-party website without the copyright owner’s consent.” They argued that Instagram’s embedding tool violates the Copyright Act. The plaintiffs  referred to two instances where other platforms, namely BuzzFeed and Time, embedded Hunley and Bauer’s Instagram posts on their websites. However, last year, U.S. District Judge Charles found that neither BuzzFeed or Time displayed a copy of the images; they simply embedded Instagram posts. The Court of Appeals affirmed that decision,  emphasizing that the BuzzFeed and Time  sites did not store a copy of the files (citing the Server Test adopted in Perfect 10. v. Amazon).  Read the Opinion here. (COH)

Dreamtitle Publ’g, LLC v. Penguin Random House LLC, No. 1:22-CV-7500-GHW, 2023 WL 4350734 (S.D.N.Y. July 5, 2023).

Betty Bynum, the owner of Plaintiff Dreamtitle Publishing, LLC, wrote an illustrated children’s book about the day in the life of a black boy named Joshua. The book was intended to promote self-esteem for black boys by showing Joshua do a number of activities with his friends throughout his day. When the Defendant published an illustrated children’s book with the same general theme, Plaintiff sued, claiming that Defendant’s book violated their copyright. The court found that the theme itself was an idea that is not protectable through copyright and, further, the two books are not substantially similar when comparing the total look and feel of the works. For example, the Plaintiff’s illustrations have a cartoon style, while the Defendant’s have a painterly brushstroke style. The Defendant’s motion to dismiss was granted. Read the opinion here. (DS)

Silverman et al., v. OpenAI INC, et al., No. 3:23-cv-03416 (C.D. Cal, July 7, 2023).

Comedian and author Sarah Silverman, along with authors Christopher Golden and Richard Kadrey are suing OpenAI and Meta for  copyright infringement. The Plaintiffs maintain that the Defendant’s AI systems were trained on illegally acquired datasets containing their works. In both claims, the authors say that they “did not consent to the use of their copyrighted books as training material” for the companies’ AI models. Read the Complaint here. (COH)

Cyrus Hodes v. Stability AI LTD, et al., No. 3:23-cv-03481 (N.D. Cal, July 13, 2023).

Tech entrepreneur Cyrus Hodes, who co-founded Stability AI with CEO Mohammad Emad Mostaque in 2020, is suing Stability AI. The company is known for the text-to-image generation product Stable Diffusion. Hodes alleged that Mostaque willfully deceived him about the value of the company, which led to Hodes selling off his 15 percent stake in the company in 2021 and 2022 for $100. This was his only compensation for 18 months of work. Afterwards, the company engaged in funding rounds with a much higher valuation. Hodes’ learned that his former stake was worth over half a billion dollars. Hodes is seeking to reinstate his stake, or receive an equivalent reward for rescissory damages, and additional rewards for monetary and punitive damages. Read the Complaint here. (VT)

Krista Perry v. Shein Distribution Corporation, 2:23-cv-05551(C.D. Cal. July 11, 2023). 

Three artists have sued the clothing manufacturer and distributor Shein for copyright infringement, trademark infringement, and violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). The Plaintiffs allege that Shein utilizes AI algorithms to comb the internet for art to make merchandise in a direct copying scheme that is difficult to detect because of the thousands of items uploaded to the Shein website daily. Shein is alleged to make small batches of infringing merchandise and wait to see if the original artist notices, either ramping up production or lessening it depending on the response. Read more here and read the complaint here. (DS)  

Alan Philipp v. Stiftung Preussischer Kulturbesitz, 22-7126 (D.C. Cir.  Jul 14, 2023).

In 1935, a consortium of German art firms owned by Jewish individuals sold several artifacts to Prussia. In 2015, the plaintiffs—two U.S. citizens and one U.K. citizen—initiated a lawsuit in the federal district court, claiming that their ancestors, part of the consortium, were forced into selling the artifacts by members of the Nazi government for much less than their true market value. The original complaint named both the Federal Republic of Germany and Stiftung Preussischer Kulturbesitz (SPK), which currently administers the museum where the artifacts are displayed, as defendants. In this appeal, defendant  SPK  asserted an immunity defense under the Foreign Sovereign Immunities Act (FSIA). The Supreme Court noted that the FSIA establishes a presumption of immunity from lawsuits for foreign states and recognized the domestic takings rule, which maintains immunity for foreign states and their agencies in cases involving a foreign sovereign’s taking of its own nationals’ property (Federal Republic of Germany v. Philipp (Philipp III), 141 S. Ct. 703 (2021)). To evade this bar, the plaintiffs presented a new argument claiming that their ancestors were not German nationals at the time of the 1935 sale. The district court ruled that this claim was not preserved, as it was not raised in their original or amended complaints. On July 14, 2023, the Court of Appeals upheld the decisions of the district court,  deciding that ____, as the plaintiffs could have raised their non-German-nationals theory from the beginning, but failed to do so Read the Opinion here. (KSN)