Intellectual Property Rights in Real Property: How to Avoid Paying Millions to Graffiti Artists

• Publication year: 2019
• Author: Thomas E. Lombardi and E. Daniel Robinson

Intellectual Property Rights in Real Property: How to Avoid Paying Millions to Graffiti Artists

Thomas E. Lombardi and E. Daniel Robinson

Thomas E. Lombardi is a founding Partner of Lombardi & Donohue LLP. Mr. Lombardi's practice emphasizes real property law and litigation. Mr. Lombardi litigates commercial real estate disputes for REITs, private equity and institutional investors, developers, advisors, asset managers, trust companies, and regional and family office companies.

E. Daniel Robinson is senior counsel at Lombardi & Donohue LLP focusing on real property and intellectual property litigation. He litigates disputes for commercial property owners, including disputes involving ownership and commercial tenancies. Mr. Robinson also has substantial experience litigating intellectual property disputes for IP owners and defendants.

I. MILLIONS FOR GRAFFITI?

In February 2018, a court in the Eastern District of New York startled commercial real estate owners across the country when it awarded 6.7 million dollars to creators of "aerosol art" covering a building whitewashed over by the owner. The "5Pointz" case was brought under the Visual Artists' Rights Act, which was added to the Copyright Act in 1990. Also in 2018, a number of graffiti artists received undisclosed settlements after bringing copyright infringement claims for use of their graffiti in advertising.

In this article, we explain intellectual property rights that have been applied to art painted on buildings, including traditional copyright and protections relatively new in the United States—moral rights. Then we dig deeper into the specifics of the federal Visual Artists' Rights Act ("VARA") and its California analog, the California Art Protection Act ("CAPA"). Finally, we point out issues to be aware of in this relatively untested area of law, and set forth some recommendations to help property owners avoid liability.

II. INTELLECTUAL PROPERTY PROTECTIONS GOVERNING ART ON BUILDINGS

A. Overview of Federal Copyright Protections

A number of legal rights can attach to graffiti and other art on buildings, including copyright. The Federal Copyright Act¹ (the "Act") protects "original works of authorship."² The Act gives the copyright owner the exclusive right to copy, distribute, display, and create derivatives of the work, and applies to most forms of content that are fixed in a "medium of tangible expression," including books, music, drama, paintings, sculpture, photographs, architectural drawings, video, and software.³ Authors need not register a work or add a "©" to have a copyright. Every work of authorship is automatically protected by copyright from the moment of its authorship.⁴

Remedies for copyright infringement can be substantial, and may include injunctive relief as well as damages.⁵ Under some circumstances, a plaintiff can seek statutory damages of $750-$150,000 per infringed work, regardless of actual harm.⁶ In some cases, costs and attorney fees may be awarded.⁷

B. Application of Federal Copyright Protections to Architecture and Visual Art on Buildings

Copyright applies to the blueprint and design for a building, but not to the building itself. In particular, 17 U.S.C. § 120(a) sets forth what is known as the "architectural exception" to copyright law. Although the Act protects "the design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings,"⁸ the architectural exception prohibits copyright holders in buildings from preventing the making, distribution, or public display of pictorial representations of buildings that are located in or ordinarily visible from a public place.⁹ In other words, under most circumstances someone can take a photo or sketch a picture of a publicly visible building and use it without fear of infringing the copyright on the building. What happens, though, when someone creates artwork on the outside of the building? Does traditional copyright protection attach to that new painting the moment it is created, as it would with any other painting? Or should the artwork be subject to the same exception to protection as the building on which it is painted? And what if the painting is illegal, like unauthorized graffiti? Does that illegal work receive copyright protection?

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Recent cases have explored the question of federal copyright protection for graffiti art on buildings, although—because each settled before resolution—the answers remain unclear. Three cases in 2014 alleged copyright infringement of graffiti and street art. Each case involved established artists whose works had been displayed in museum collections, lauded by critics, or even registered in the United States Copyright Office. In Anagasti v. American Eagle Outfitters, Inc., the artist sued a clothing retailer for copyright infringement for using his work, painted on the side of a building, in world-wide advertising.¹⁰ A month later, in Hayuk v. Coach Services, a muralist leveled the same charge against the handbag retailer for using her "Chem Trails NYC" mural in its advertisements.¹¹ And a week after that, in Williams v. Roberto Cavalli, S.p.A., three graffiti artists sued a fashion designer and retailers for use of their graffiti on apparel.¹² As all three cases settled out of court, however, none provide definitive answers to questions surrounding copyright protection of graffiti art on buildings.

A few years later, graffiti artist "Revok"—who had been one of the plaintiffs in the earlier Williams case—sent a cease and desist to retailer H&M after seeing his graffiti in an H&M advertisement.¹³ H&M sued for declaratory judgment in March 2018, based in part on the contention that the graffiti was illegal and thus should not be protected.¹⁴ H&M ultimately dropped the suit—and the ad—under public pressure.¹⁵

More recently, an artist sued General Motors for copyright infringement of his mural when it appeared in GM advertising.¹⁶ The artist had painted the mural legally, with permission, on the side of a building visible in the advertisement. The case settled in November 2018.¹⁷ These recent cases show that the question of copyright protection for legal and illegal graffiti therefore remains an open question for now.

Questions remain regarding the scope of copyright protection for graffiti, particularly when it is illegal. It is important to note, however, that courts and parties have often assumed, without explicitly deciding, that legal graffiti and street art are subject to the same copyright protection as any other artwork.¹⁸ Owners of buildings and others should therefore be cautious about making use of such artwork without permission. If a building owner commissions a work of art, it would be wise to make explicit in writing either that the copyright to the work is conveyed to the building owner, or that the building owner is licensed to use photographs, video, or other depictions of the artwork as it sees fit.

C. A Different Type of Intellectual Property: Moral Rights 1. An Overview of Moral Rights

A second type of intellectual property right has protected visual art in the United States since 1990, and in California since 1980: moral rights. Moral rights have existed in Europe for over a century and give an artist life-long rights to protect the integrity of his or her art, regardless of who owns the physical work. Artistic works in the United States, however, have traditionally been subject to the "first sale" rule; an author cannot restrict what a purchaser of a particular copy of a work can do with that copy.¹⁹ For instance, if you buy a book in the United States, it is your property, and you can burn it, throw it away, or sell it without having to pay anything to the copyright holder or artist.

But in France and most other European countries, there is a major exception to the first sale rule in the form of moral rights. Moral rights protect the rights of artists in their works after they have given up legal title.²⁰ There are two primary moral rights:

(a) "The right of integrity allows the artist to prevent any deforming or mutilating changes to his work, even after title in the work has been transferred;" ²¹ and
(b) "The right of attribution allows the artist to be recognized by name as the creator of a work. It includes an artist's right to prevent the use of his or her name on distorted pieces of art originally produced by him or her."²²

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Unlike any other property rights, moral rights are held by the author of a work for his or her natural life and they cannot be transferred. The artist maintains the right to prevent the distortion, mutilation, or destruction of his or her work regardless how many times that work is sold or who the owner is. The artist can sue for damages if that right is infringed.

Because moral rights conflict with traditional common law property rights, American law has resisted recognizing them.²³ In 1988, however, the United States joined the Berne Convention for the Protection of Literary and Artistic Works, which contains a moral rights provision.²⁴ To implement this provision of the Berne Convention, in 1990 Congress enacted the Visual Artist Rights Act.²⁵ California had enacted nearly identical protections for moral rights a decade earlier in the California Arts Preservation Act.²⁶

2. Preservation Protections in California and Federal Statutes

Both the United States Code and the California Civil Code provide statutory protections for artists' rights to the preservation of their works of art, including works that are on and in buildings of commercial property owners. It is of critical importance for commercial real estate owners to consider these statutes when commissioning works for their buildings, and to comply with them when taking action to remove or otherwise alter or destroy works of art. While there are nuances with respect to the application of the federal and California statutes, they provide similar protections for artists, and similar safe...