Wednesday, November 22, 2006

New Massachusetts Fine Art Consignment Law

Chapter 104A of the Massachusetts General Laws governs the consignment of fine art. Many states have similar statutes, including New York and California (Cal. Civ. Code Section 1738 et seq.). Although the Massachusetts law does create a trust relationship between the consignor and consignee, the law does not provide any specific remedies and is mostly toothless. In a recent action filed by this firm we shoehorned 104A into a 93A unfair and deceptive trade practices claim. There were other counts based on some general tort principles, but the thrust of the action was that the gallery was in the position of a trustee and therefore had fiduciary duties to the artist which were breached.

Thanks in large part to the Massachusetts Volunteer Lawyers for the Arts, Massachusetts has recently enacted a new art consignment statute which I believe goes into effect in February 2007. The effort to pass the new law gained momentum from the Boston Corporate Art debacle.

The new law is a complete reworking of 104A. The text of the new law can be found here.

Some highlights:
1) Definition of “fine art” is greatly expanded. It will include such things as digital art, conceptual-based art (hmmm), sound work, and other works.

2) Consignor must provide a written statement to consignee which must include at a minimum: the artist’s name and the name of the owner of the work of fine art; the title, if any, of the work of fine art; the medium and dimensions of the work of fine art; the date of completion of the work of fine art; the date of delivery of the work of fine art; and the anticipated fair market value of the work of fine art. The effect of non-compliance with the written statement is unknown.

3) Consignee must maintain a copy of the consignor’s written statement as an acknowledged acceptance of delivery of the art work. If the work of fine art is sold, the consignee shall record the date it sold, for what amount it sold, and name and contact information of who purchased the work of fine art. If the consignor is the creator of the work of fine art or the artist’s heirs or legatees, the consignee shall disclose the name and contact information of the purchaser of the work of fine art to the consignor with payment of the funds owed to the consignor.

4) The consignee shall make all records pertaining to that consignee, including records of accounts, available for the consignor to review during consignee’s normal business hours, within a reasonable time after consignor’s request, and shall provide copies of the account records to the consignor when requested. The consignee shall keep copies of all books and records for at least 4 years after completion of the consignment.

5) The new law maintains the trust relationship, but greatly expands on what this means (due in large part to the BCA matter). The new law addresses the situation where a consignee purchases a consigned work for its own account, does not pay the consignor, and then resells the work to a third party. In this situation the resale funds must be held in trust for the consignor until the fiduciary obligation of the consignee with respect to the transaction is discharged.

6) Works of fine art, or funds received as a result of the sale of a work of fine art, held in trust are considered property held in a statutory trust as defined and contemplated by 11 U.S.C. section 541 and any other relevant bankruptcy law. A work of fine art received as a consignment, or funds derived from the sale of a work of fine art so received, shall not, under any circumstances, without the express written consent of the consignor, become the property of the consignee.

7) It is consignor’s responsibility to keep its contact information up to date with consignee. If the consignee has in good faith attempted to return the consignor’s work and has attempted in writing to notify the consignor of the intent, but has not been able to locate consignor within 1 year of the consignee’s decision to return the unsold artwork, the work shall be considered forfeited and the consignee may dispose of the property in a manner as the consignee considers appropriate. The consignee shall keep on file a record of attempts to contact the consignor.

Consignees should consider VARA when deciding what “appropriate” means.

8) Consignee must account separately for each consignor.

Now the teeth…

9) Failure of consignee to pay consignor within 90 days of receipt by the consignee of proceeds of the sale shall entitle the consignor to be awarded the amount owed to the consignor together with 5% yearly interest calculated from the date when the payment became due, together with court costs and reasonable attorney’s fees incurred by consignor in collecting monies owed. If payment is not made within 180 days, consignor is entitled to triple damages, fees, and costs.

10) Within 90 days of consignee’s business closing, consignee must notify consignor in writing, return consigned works, and pay amounts due.


Monday, November 20, 2006

More on Trademark Protection for a Single Color

Kimberly-Clark has been granted a permanent injunction against ValuMax International's use of the color orange on medical face masks. The color orange is a registered trademark of Kimberly-Clark used in connection with medical face masks. Serial Number 75073145. Kimberly-Clark claimed that ValuMax was using a confusingly similar color on its face masks. The court also ordered ValuMax to destroy all medical face masks of an orange color similar to that used by Kimberly-Clark as well as any product used to produce the orange color.


Monday, November 13, 2006

Organist Seeks a Greener Shade of Pale

Musicians' eyes tend to glaze over when we give them the old "rock band 101" lecture. All that talk about partnership agreements and touring entities isn't nearly as fun as searching Craigslist for a sweet Chevy van. Add to that the different sort of glaze likely in effect as Procol Harum were cranking out the classic "Whiter Shade Of Pale" and you start to understand how they end up being sued for authorship credit and back royalties by their former organist.


Friday, November 10, 2006

A burrito is not a sandwich

Oh, to be an expert witness at this proceeding.


Wednesday, November 08, 2006

The things you find at the PTO

Perhaps you recall earlier this year when Grover Norquist got a bit of press when it was revealed that he had filed an application for federal registration of the "The K Street Project" trademark. At the time, he said "We will jealously guard the real phrasing the way Kleenex and Coca-Cola do. We will sue anyone who says it wrong and make lots of money." It seemed a bit odd that the application was for a design mark (a green street sign), but hey, it's his money.

So today I'm poking around the PTO, looking for marks using the word "street" in International Class 35, and I come across an application, filed by Grover Norquist, for this mark:
The K Street Project promotes the hire of lobbyists at corporations and trade associations who understand free-market economics, who support their principled positions for free trade, against tort law abuse, and for lower and more transparent taxation.
Offered without comment, except to note that Norquist works in Washington D.C., where there is no shortage of trademark attorneys at his disposal.


You know you're an IP lawyer when... of the first things you think about on the day after the House (and possibly the Senate) changes hands is "hmm, what does this mean for future copyright legislation?" Unsurprisingly, William Patry is on the case. He sees the possibility that Congressman Rick Boucher (D-VA) heads up the IP Subcommittee. Boucher was responsible for the Digital Media Consumers' Rights Act of 2002, and the Network Neutrality Act of 2006. That should give you an idea where he's coming from, and where he might lead.

Update: more at TechDirt, with a good look at the history of Congressman Berman, who is in line to head up the IP Subcommittee if he doesn't choose to pass it on to Boucher.


Tuesday, November 07, 2006

Australian Institute of Criminology Report Says Piracy Stats Don't Add Up

Figures for 2005 from the global Business Software Association showing $361 million a year of lost sales in Australia are "unverified and epistemologically unreliable", the report says.

I'm sure we will be hearing a lot more about this report in the near future.


Wednesday, November 01, 2006

Site Feed

Aaron called attention to the lack of a link to this site's feed. I thought I'd taken care of that, but apparently not. Sorry about that. Allow me to rectify the situation now: