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

Robert Armijo v. Ozone Networks, INC., et al., Defendants, No. 3:22-cv-00112-MMD-CLB, 2023 WL 319577 (D. Nev Jan. 19, 2023)

Following a failed attempt at trading one of his NFTs on Discord, Robert Armijo, plaintiff, filed suit against Yuga Labs, OpenSea, and LooksRare, for allegedly not providing adequate prevention of theft, allowing access to NFTs that were stolen and lack of response to theft. Armijo, owner of three Bored Ape Yacht Club  NFTs, clicked a malware link that gave access to Armijo’s Ether wallet, a digital way to store crypto. The thief stole Armijo’s NFTs and sold them as their own on OpenSea and LooksRare, two NFT marketplaces. Armijo filed on the grounds that OpenSea and LooksRare failed “‘to implement common sense and reasonable security measures to prevent the foreseeable fraud and sale of stolen’ property”. Judge Miranda M. Du ruled in favor of Yuga Labs, parent company of Bored Ape Yacht Club, agreeing with  their defense that merely having customers in the state of Nevada is insufficient to claim it is under Nevada jurisdiction, as Yuga Labs is a Delaware incorporated business and has no corporate relationship to Nevada aside from servicing the limited number of customers who are domiciled in the state. Armijo also filed a negligence claim against OpenSea, in response to Armijo immediately flagging the theft to OpenSea and not hearing back until the stolen NFT had been sold via their marketplace. Prior to March 2021, OpenSea had an owner verification process, which now no longer exists. Judge Du ruled in favor of OpenSea’s motion to dismiss, stating plaintiffs can only receive damages if the negligence causes physical harm to one’s body or property. Judge Du did not mention LooksRare in her decision. Read more HERE.

Kenneth C. Griffen v. Internal Revenue Service and U.S. Department of the Treasury, No. 1:22-cv-24023-KMW (S.D. Fla Dec. 13, 2022)

Ken Griffen, art collector,  filed an action against the IRS claiming the IRS violated his right to privacy after ProPublica published his tax and records in 2022. Griffen is one of the top donors to various institutions such as the Art Institute of Chicago, MOMA New York, The Museum of Contemporary Art Chicago and many more. Griffen is also known for his major acquisitions in the art sphere, including sought-after pieces such as Boy and Dog in Johnnypump, a John-Michel Basquiat piece which Griffen purchased for $100 million in 2020, and a $300 million Willem de Kooning painting.Propublica claims that the information that they published, including Griffen’s annual income, was submitted by an anonymous third party.  Griffen  claims the published information is inaccurate and alleges that the IRS committed “unlawful disclosure” of his financial information and “willful and intentional failure to establish appropriate administrative, technical, and or physical safeguards over its record system to insure the security and confidentiality”. Read the Complaint HERE.

Andersen et al. v. Stability AI Ltd. et al., No. 3:23-cv-00201 (N.D. Cal. Jan. 13, 2023).

Three artists filed a class-action suit against Stability AI, Midjourney, and DeviantArt, companies that operate open-source image generators, in federal court in San Francisco, alleging copyright infringement, violation of publicity rights, and violation of Unfair Competition law. Stability AI built a software engine that creates images based on a string of user-generated text and pulls images from across the internet to populate an inventory of reference images. The AI -system uses the files as “training images” that are stored and incorporated into the software as compressed copies. The engine has been used to create web-based apps such as Stable Diffusion, Dreamstudio, and Dreamup. Stable Diffusion also offers a feature to create artworks “in the style of” a particular artist. Plaintiffs claim that the software scraped over five billion of images from public websites without consent. and that the new images are derivative works of the source images, which the software only collages together. Getty images also filed a copyright infringement lawsuit in the U.K. against Stability AI, after it discovered that at least 15,000 images on the platform came from Getty Images argues that Stability AI ignored existing licensing options. Stability AI is used by over ten million people, and Bloomberg recently valued the company at one billion dollars. See the filings HERE.

Thaler v. Perlmutter, No. 1:22-cv-01564 (D.D.C., 10 Jan. 2023).

Stephen Thaler, a computer scientist, continues to fight for the right to obtain copyright protection for artwork created by DABUS, an artificial intelligence system that he built. Thaler’s copyright application for the artwork, “A Recent Entrance to Paradise”, was denied by the U.S. Copyright Office in November 2018  because it lacks “human authorship.” On Tuesday, January 10, 2023, Thaler filed a motion for summary judgment in the U.S. District Court for the District of Washington, D.C. asking the court to decide, as a matter of law, that the artwork is protectable under U.S. copyright law. Read the case HERE

Silver et al v. Basil and Elise Goulandris Foundation et al v. Basil and Elise Goulandris Foundation and The Metropolitan Museum of Art, No. 3:2022cv08914 (N.D. Cal., 15 Dec. 2022).

The heirs of Hedwig Stern, a Jewish woman who was forced out of Germany by Nazi persecution in 1936, filed a complaint in December 2022 against the Metropolitan Museum of Art and the Basil and Elise Goulandris Foundation. In their complaint, the Stern heirs seek to recover a valuable Vincent van Gogh painting from the Defendant, the Basil and Elise Goulandris Foundation, as well as restitution for unjust enrichment, which is alleged to have occurred when the Metropolitan Museum of Art secretly sold the painting to the Foundation for over $75,000 in 1972, for the purpose of avoiding restituting the painting to Stern. Read the case HERE.

Schoeps et al. v. Sompo Holdings, Inc. et al. No. 1:2022cv07013 (N.D. III. Dec. 13, 2022).

In December 2022, the heirs of Paul Mendelssohn-Bartholdy, a prominent Berlin banker, filed suit against Japanese-based insurance company, Sompo Holdings, in the U.S. District Court for the Northern District of Illinois. In the complaint, the heirs request the return of Vincent van Gogh’s painting, “Sunflowers” and $750 million in punitive damages. The complaint explains that Mendelssohn-Bartholdy hastily sold the painting, as well as the rest of his art collection, in an effort to protect his remaining assets from Nazis in 1934. The complaint asserts that even though the painting was purchased legally, Sompo disregarded the painting’s historical origin. Read the case HERE.

Deadria Farmer-Paellmann & Restitution Stud. Grp. v. Smithsonian Inst., No. 1:22-cv-3048 (D.D.C. Oct. 7, 2022).

A New York-based nonprofit, the Restitution Study Group (RSG), has filed a class action complaint against the Smithsonian Institution alleging a “breach of trust” after the museum determined that twenty-nine Benin Bronzes, worth over $200 million total, should be repatriated to Nigeria. The action seeks equitable relief only, namely a permanent injunction against the return of any of the Benin Bronzes held by the Smithsonian. RSG’s  allegations state that the bronzes were crafted from the currency used by slave traders to buy Nigerian slaves brought to America and, therefore, constitute an important piece of Black American history, and should not be sent back to those who sold their ancestors into slavery. However, the Smithsonian continued with the return, which was finalized on October 11, 2023. RSG’s request for an injunction was denied on October 14, 2023, as the judge stated that the injury was not “concrete or particularized” and that the Smithsonian had not acted beyond its authority. However, the judge did invite RSG to amend and refile its complaint, which RSG has stated it plans to do. Read the case HERE.

Brown v. Sotheby’s, Inc., No. 1:22-cv-4799 (S.D.N.Y. Aug. 10, 2022).

Sotheby’s, Inc. resolved a class action lawsuit from a group of visually-impaired and legally blind class members, accusing Sotheby’s  website of being inaccessible under The Americans with Disabilities Act (ADA). Plaintiff Lamar Brown, a visually-impaired and legally blind person who requires screen-reading software to read website content, represented the class and claimed that he was unable to participate in “The Macklowe Collection Auction” at Sotheby’s on May 16, 2022, after encountering numerous access barriers on the website. Allegations of website access barriers included a lack of alt-text on graphics, inaccessible drop-down menus, a lack of navigation links, a lack of adequate prompting and labeling, denial of keyboard access for interactive elements, incorrect page titles, and the requirement that transactions be performed solely with a mouse. The class demanded injunctive relief, compensatory damages, and civil penalties. After settlement negotiations commenced in October 2022, the case was dismissed with prejudice on December, 13, 2022. The MacLowe Collection Auction at Sotheby’s achieved a total of $922.2 million across two auctions and became the most valuable collection ever sold at auction. Read the complaint HERE

United States v. Filippo Bernardini, No. 1:21-cr-00458-CM (S.D.N.Y. July 14, 2021).

The “Spine Thief,” as Filippo Bernardini has been nicknamed, has pled guilty to one federal charge of wire fraud. From August 2016 to his arrest in January 2022, Bernadini has impersonated literary agents and publishing domains by creating deceptively similar websites and emails meant to dupe authors into sending him unpublished manuscripts. Bernardini was originally charged with one count of wire fraud and one count of aggravated identity theft. In the plea made on January 6, 2023, Bernadini additionally agreed to pay $88,000 in restitution. The maximum sentence for the charge of wire fraud is 20 years, and Bernardini is set to be sentenced on April 5, 2023 in the U.S. Southern District of New York by Judge Colleen McMahon. Read the case HERE.

teamLab Inc. v. Museum of Dream Space, LLC et al., No. 2:19-cv-06906 (C.D. Cal. Oct. 28, 2019).

Japanese art collective teamLab is suing the Museum of Dream Space (MODS), a for-profit museum in Beverly Hills, California, and its parent company Dahooo American Corporation, alleging copyright infringement based on similarities of their immersive digital art and light exhibits. Teamlab creates interactive artworks with exhibitions around the world and has a 107,000 square foot interactive museum in Tokyo. TeamLab’s installations are known for their unusual spatiality, image projections, lighting, and color changes. Teamlab argued that the museum’s installations resemble multiple projects including their 2017 exhibition Boundaries, first shown at Pace Gallery in London. Teamlab alleged that the museum copied their works verbatim and attempted to pass them off as their own “in order to draw attention and ticket sales to the nascent MODS Museum and its planned grand opening.” The court ruled that Japanese copyright law controls, as the country with the closest relationship to the works. The court first held that teamLab failed to establish that the artworks were “foreign works” and thus exempt from the pre-suit registration requirement, as they never received copyright registration. On November 16, 2022, the U.S. District Court for Central California, Los Angeles, granted Plaintiff’s motion for reconsideration. The court ultimately found that the images and exhibits qualify as foreign material and are allowed to move forward. On January 6, 2023, the court issued a motion for summary judgment for copyright validity, ownership, and infringement in favor of teamLab. The court found that teamLab is provided broad copyright protection due to its level of creativity. However, the court denied summary judgment regarding a music video of pop musician Justin Bieber that was filmed among the installations, which is not the first time the teamLab’s art has been used as a backdrop for a music video. In 2018, teamlab was featured in a music video for Swizz Beatz’s song Echo featuring Nas, set in the Mori Building Digital Art Museum in Tokyo. Read the complaint HERE.

Fearn v. Bd. of Trs. of the Tate Gallery, [2023] UKSC 4 (Eng.).

After two losses in England’s lower courts, residents of four luxury apartments facing the Tate Modern’s “viewing gallery” won their case before the Supreme Court on February 1, 2023. The residents of Neo Bankside had brought a nuisance complaint and petition for injunction against the Tate Modern in 2019 for installing a balcony that looked almost directly into the glass-walled apartments, and which the museum used as a “gallery” to view the city. Over 500,000 visitors to the Tate Modern visited the “viewing gallery”, peering into the apartments. The 3-2 decision stated that a viewing gallery was not a normal feature of an art museum, and residents should not have to “live behind net curtains or with their blinds drawn all day” just to have some basic privacy. The case has now been remanded to the High Court to determine a solution and any damages. Read the decision HERE.