Art law is often the intersection of a wide range of statutes and legal authority, and can draw from intellectual property, criminal law, commercial law and corporate law. Legal authority governing the field of art law in California includes, but is not limited to, the following:

• Copyright Act of 1976, 17 U.S.C §§ 101 et seq.;
• Digital Millenium Copyright Act (DMCA), 17 U.S.C §§ 512, 1201-1202;
• Lanham Act, 15 US Code §1051;
• California Resale Royalties Act (CRRA), Cal. Civ. Code §986 (with limitations);
• Visual Rights Act (VARA), 17 U.S.C. §106A;
• California Penal Code §485, which criminalises the retention of lost or misappropriated property, including artworks;
• National Stolen Property Act, 18 U.S.C §2314, et seq., which governs the interstate transfer of stolen goods, including art; and
• CA Penal Code §496, which criminalises receiving, concealing, selling, or aiding in selling stolen property, including artwork.

It is important to emphasise that this provides only a general overview of legal authority under federal and California law. Other states and jurisdictions may have additional or conflicting authorities.

Artists have various rights over their art, many of which are protected under California and US law. By way of example, the Visual Artists Rights Act of 1990 (VARA) is a federal law that is designed to protect the moral rights of artists, for the duration of their life, with regard to their “visual arts”. Specifically, as defined by 17 US Code §101, the term “visual arts” includes “a painting, drawing, print or sculpture”. 

Similarly, the California Art Preservation Act of 1979 (CAPA) was designed to protect the rights of artists with regards to their fine art. Cal. Civil Code § 987 defines “fine art” to include “original paintings, sculptures, or drawing or an original work of art in glass, of recognised quality, but should not include work prepared under contract for commercial use by its purchaser”. CAPA’s protections aim to prevent intentional modifications or destruction to the artwork. CAPA further limits these protections to works that are of a “recognised quality”.

These rights were designed to last for the duration of the artist’s life, plus an additional 50 years.

Moral rights (droit moral) have been adopted by other countries but were initially introduced to the US through CAPA before being adopted at a federal level through VARA. VARA now serves as the principal US law on the topic of an artist’s moral rights. Moral rights are waivable, if fixed in writing, but cannot be transferred. The moral rights protected by both VARA and CAPA include the following.

• Integrity: Under VARA, there are two rights of integrity. First, artists have a right to block deliberate changes to the work which might bias or damage the artist’s reputation. Second, artists have the right to prevent the intentional or grossly negligent destruction of work that is of a “recognised stature”, meaning that a portion of the public considers the work to be significant. CAPA does not adopt VARA’s dual approach, and instead uniformly guards against the alteration and destruction of any fine art to which it applies.
• Attribution: The right of attribution allows the artist to be recognised as the author of their work of art. Additionally, the author may disclaim the work. This often occurs if the work has been altered in some way.

Artists may also be subject to copyright protection, which provides a bundle of rights to the author of a work. These rights include the right to replicate, create imitative works, publicly exhibit the work, or to present the work in instances of performative work. Notably, proprietary rights are distinct from copyright protections. Proprietary rights provide ownership, as well as the ability to use the tangible item. However, ownership of the item does not transfer the copyright.

Collective or Collaborative Artwork Rights

Collective artworks occur when two or more artists merge their work to create one larger compilation. These artworks often occur in employment settings and are common in the film and music industry. When art is collective, the copyright of the arrangement of works belongs to the group. However, under 17 U.S.C §101, each contribution is considered “separate and independent works in themselves”, with the copyright of the individual works belonging to the original author, unless specifically transferred.

It is important to acknowledge that a collective work is distinct from a “derivative work”, given that derivative works alter the pre-existing work or the original, while the collective work consists of a collection of separate works.

Copyright infringement occurs when someone uses a work protected by copyright, without permission from the owner. This infringement of artwork can result in both civil and criminal penalties. The copyright owner can also require the deletion of the work and prevent its distribution. A plaintiff suing for copyright infringement may be entitled to various types of damages, including pecuniary and statutory. These statutory damages can range from USD750 to USD30,000 per work. In fact, these damages can range as high as USD150,000 per work if it is determined that the defendant’s infringement was “wilful”. A victim may also have additional civil claims, depending on the circumstances.

Copyright Registration

To register a piece of artwork with the US Copyright Office, an applicant must first create an original work that is fixed in a tangible medium. Next, the applicant should complete an application on the US Copyright website with a copy of the work, and any required payments attached with it. Once the Copyright Office receives a complete application, copy of the work and filing fee, it will issue a Certificate of Registration to the applicant. While copyright protections start when a work is created, 17 US Code § 411(a) states that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration of registration of the copyright claim has been made…”

Please note that these instructions are intended to provide a general overview, and anyone interested in understanding how to register a piece of artwork should consult a lawyer experienced in copyright matters and filing applications.

Droit de suite, a 1920’s statute originating in France, allows visual artists a continued financial interest in the resale of their artwork. This commission is significant to the authors of these works as visual artists often do not receive any profits after the initial sale of their artwork. The real value of visual art often appears after a duration of time has passed and the artist is rediscovered.

Despite the meaningful and historic impact of droit de suite, the United States has not yet implemented it on a federal level, and this right is not a part of United States law. However, the US Copyright Office has reconsidered the issue in the recent past, and in 2013 released a report discussing the benefits and challenges of enacting droit de suite in the United States. While the issue has garnered attention from Congress, it has so far failed to act on it.

While droit de suite is not yet federally recognised, California created the California Resale Royalty Act (CRRA) as early as 1976. This statute allows an artist the right to a 5% commission on the resale of fine artwork sold for USD1,000 or more. As previously mentioned, the definition of fine art includes paintings, drawings, sculptures or an original work of art in glass. The definition, however, does not include “performance art”. Presently, California is the only jurisdiction to have implemented a version of droit de suite. In 2018, the Ninth Circuit ruled, however, that CRRA is pre-empted by the Federal Copyright Act of 1976, so the CRRA applies to only a very limited number of works.

Copyright Permission Needed for Use

Permission to use a copyrighted artwork can be obtained through an explicit license provided by the copyright holder. In order to obtain this licensing, one must identify and contact the copyright holder to acquire the proper permissions.

A copyright holder may be identified through:

• the Writers Artists and Their Copyright Holders file (“WATCH file”); and
• the Stanford Copyright Renewal Database and Catalogue of Copyright Entries (for works from 1978 through to the present).

Prior to the request, a licensee should be prepared to inform the copyright holder of their intended use. Additionally, it is important to note that while an individual may acquire an original artwork, this does not equate to acquiring the copyright, and they will still need to obtain a licence for their intended use from the proper copyright holder.

The right to authenticate an artist’s work after death may differ from state to state or from one artist to another. However, most often, the right to authenticate artwork often passes to heirs, living relatives or spouses, workers of the artist, or other individuals who are legally recognised as an authority figure for the matter.

Compulsion for Catalogue Raisonné

A foundation, entity or person cannot be compelled to include a specific artwork in the artist’s catalogue raisonné or to issue a favourable opinion regarding a certificate of authenticity. This answer is supported by a case entitled Thome v The Alexander and Laura Calder Foundation, 70 A.D.2d 88, 890 N.Y.S.2d 16 (1st Dep’t 2009), which, although not a California or federal case, and therefore not binding authority in Californian jurisdiction, is frequently cited for its persuasive reasoning on this issue. The case concluded that those with authority over a catalogue raisonné have no legal obligation to authenticate artwork and incorporate a specific artwork into the artist’s catalogue raisonné and cannot be compelled to do so unless there is an individual legal duty. 

Civil Remedies For Inauthentic Artworks

There are a variety of remedies available in cases where artworks are declared “inauthentic” after their purchase, but these remedies often vary by circumstance and jurisdiction. However, in the United States, good faith buyers who are victimised by forgery can typically find remedies through contract and tort principals, as well as related federal and state laws. For instance:

• under contract law, the doctrine of “mutual mistake” can cancel a contract if the buyer and seller were unaware of a material fact;
• in California, the statutory codification of the Uniform Commercial Code can safeguard art consumers and provides remedies for fraudulent transactions;
• US Copyright Law provides additional safeguards for original works, and those who produce a copy may be in violation absent a fair use exception; and
• statutes that protect buyers against fraud, such as California Penal Code § 350, which makes it a crime to intentionally sell counterfeit goods.

Important notes:

• an inauthentic piece of art is not automatically a “counterfeit”, meaning it is created for deceitful purposes;
• while California’s Uniform Commercial Code safeguards purchasers in art acquisitions, sellers may revise warranties to reduce consumer protections; and
• additionally, “implied warranties” are challenging to enforce in art transactions due to the difficulty in establishing fraud or suitability for “ordinary purposes.”

The California State Law & Historic Preservation Statutes, Regulations and Administrative Policies, defines Cultural Heritage as, “pertaining to the sum total of traditions, body of knowledge, etc., inherited as possessions, characteristics, or conditions expressing a traditional way of life subject to gradual, but continuous modifications by succeeding generations”. Additionally, under California Code Regulations § 15064.5 a resource is historically significant if it is associated with significant historical events, important figures, distinctive characteristics of a specific time or style or it has potential to yield valuable historical or prehistoric information.

This can be a complex and nuanced area, and the law continues to evolve. California has a variety of laws safeguarding cultural heritage items which make it difficult to employ adverse possession against them.

By way of example, California Public Resources Code Article 7 § 5079.60 acknowledges that “California’s archaeological resources are endangered by urban development and population growth and by natural forces... [T]hese resources need to be preserved to illuminate and increase public knowledge concerning the historic and prehistoric past of California”. California Penal Code § 622 ½ states “[e]very person, not the owner thereof, who willfully injures, disfigures, defaces, or destroys any object or thing of archaeological or historical interest or value, whether situated on private lands or within any public park or place, is guilty of a misdemeanor”.

Another example includes the California Public Resources Code § 5097.5(a) which states that a person, “shall not knowingly and willfully excavate upon, or remove, destroy, injure, or deface, any historic or prehistoric ruins, burial grounds, archaeological or vertebrate paleontological site... except with the express permission of the public agency having jurisdiction over the lands”.

Thus, California’s laws and public policies make it doubtful that an individual could effectively take title to cultural heritage items using adverse possession laws. 

The following is a non-exhaustive list of California’s rights when a cultural heritage item is discovered by a private individual.

• California Public Resources Code § 5024.1 – code establishes a California Register of Historic Resources, an authoritative guide for state, local agencies, private groups and citizens to reference when identifying “historical resources and to indicate what properties are to be protected”.
• California Public Resources Code § 5097.98 – provides that when Native American remains are discovered, the county coroner must notify the Native American Heritage Commission, which then identifies the most likely descendants. The descendants have the right to inspect the site and recommend treatment of the remains and any associated grave goods. 
• California Public Resources Code § 5097.993 – allows the state to charge an individual with a misdemeanour for “maliciously excavat[ing] upon, remov[ing], destroy[ing], injur[ing], or defac[ing] a Native American historic, cultural, or sacred site, that is listed or may be eligible for listing in the California Register of Historic Resources”.
• California Public Resources Code § 5097.5 – defends archaeological and historical items discovered on public property by prohibiting their unauthorised excavation, removal, destruction, injury or defacement. Violations can result in misdemeanours and may give rise to a restitution obligation.
• California Health and Safety Code, § 7050.5 – states that when human remains, or associated items, are in California, the local coroner must be notified. If they are revealed to be of Native American origin, the coroner shall notify the Native American Heritage Commission (NAHC), to determine how the remains and any related objects are processed.

The main provisions in contracts for the sale of artwork include:

• description;
• purchase price;
• payment terms;
• methods;
• timing of the title transfer (eg, upon shipping or otherwise);
• representations and warranties of the parties;
• any potential guarantee;
• condition report;
• shipping, delivery, custom issues, and insurance requirements; and
• indemnity.

The key issues in the sale of an artwork when the pieces must be transferred abroad include the following.

• Compliance with custom and import regulations – it is important to acknowledge that regulations can differ from one country to another. For example, the EU implements a VAT on art imports.
• Ensuring secure shipping – artwork sales often involve delicate and valuable pieces that may require specialised handling and transportation.
• Authentication, verification, and provenance – purchasers should use their due diligence when researching artwork and always obtain a certificate of authenticity and expert appraisal.
• Currency exchange rates and international payments – individuals should be mindful of possible fees resulting from cross-border transfers.

Given the international nature of the art market, different countries will have different methodologies for determining whether a good title exists for a given work. Just because an ownership history has been traced, it does not imply there is a clear title.

Auction houses and galleries which intentionally sell inauthentic artworks could face liability for fraud and misrepresentation. Even unintentional sales of inauthentic works could harm their reputation in the industry, create financial loss and lead to exposure for civil claims, including negligence, indemnity and contribution issues. Additionally, buyers who purchased the inauthentic work may be able to seek recourse to obtain refunds, compensation or additional remedies. However, the potential liability faced by auction houses and galleries for the sale of inauthentic or plagiarised artworks can vary significantly depending on the circumstances.

Key factors to consider include:

• the jurisdiction involved, including where the transaction took place and the place of business or residence of any parties involved in the transaction;
• any affirmative representations made by the auction house or gallery; and
• the terms and conditions set forth in the sales contracts seeking to limit the auction house or gallery’s liability.

Although outside the jurisdiction of California or federal law, one prominent case, De Sole v Knoedler Gallery, LLC, 974 F. Supp. 2d 274 (S.D.N.Y. 2013), involved the widely recognised and long-established Knoedler Gallery in New York, which was revealed to have sold forged artworks attributed to highly acclaimed artists. While the Knoedler Gallery settled and the case did not result in a final verdict, the case emphasised liabilities art galleries may be subject to, as the court allowed claims such as fraud to proceed against Knoedler.

Best Practices for Verification of Artworks

Although the art market currently lacks a standardised legal framework for due diligence, auction houses should engage in a series of checks and verifications before offering artistic goods for sale. This often involves:

• provenance confirmation – tracing the ownership history through exhibition records, prior sales and other recordkeeping materials;
• authentication – this may include stylistic analysis, material testing, expert evaluations and comparison against verified works of the same artist; and
• condition assessment – detailed documentation of the artwork’s overall appearance, restoration work and photographs for the future buyer’s reference.

Given the central role auction houses and galleries have in the market, they are in a unique position that allows them to develop policies and standards that prevent art theft and illicit trades. They also have access to and familiarity with research methods that make them well-equipped to identify inauthentic or stolen pieces. Engaging in due diligence can protect buyers and original owners.

The role and responsibility of an art adviser involves selecting pieces of art that are likely to align with a collector’s style and interests, and may involve authentication, provenance, appraisal and other consulting services specific to that client.

Regulation and Oversight for Money Laundering in the Art Market

Much of the information regarding the obligations and challenges for art market participants in complying with anti-money laundering regulations can be found in the US Senate publication entitled: The Art Industry and US Policies that Undermine Sanctions, Staff Report (the “US Senate Report”). According to the US Senate Report, the United States art market can be complex and nuanced, sometimes heavily regulated in areas and shockingly unregulated in other areas. 

For example, the market is not subject to the Bank Secrecy Act (BSA), which requires parties to comply with specific procedures to confirm identities and prevent the possibility of money laundering. In fact, the art market commonly relies on using art advisers as intermediaries, allowing the identity of the buyer and purchaser to remain unknown to one another. This prevents the seller from looking into the purchaser and provides ample opportunity for the buyer to use the transaction as a format for laundering money. In fact, the anonymous nature of the transactions makes tracking ownership of unknown shell companies, as well as those related to high-value art sales, highly complicated.

Notably, while there is no legal requirement to comply with the BSA in the United States, the four largest auction houses have willingly implemented an anti-money laundering programme. These auction houses include Sotheby’s, Christie’s, Phillips and Bonhams.

Despite the US Senate Report recognising these concerns, the art industry remains largely unregulated, and the issue remains active.

Cultural Heritage Protection for Art Collections

Collections are protected as cultural heritage when they are recognised as significant to the cultural legacy of a group of people, as defined by the 1954 Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict (the “Treaty”). This international Treaty was intended to protect cultural heritage during armed conflict, and to ensure its protection during times of peace. The protected property includes collections such as libraries and art galleries.

Under Article 1 of the Treaty, it applies to both movable or immovable property, including: “monuments of architecture, art or history, whether religious or secular; archaeological sites; groups of buildings which, as a whole, are of historical or artistic interest; works of art; manuscripts, books and other objects of artistic, historical or archaeological interest; as well as scientific collections and important collections of books or archives or of reproductions of the property...”

Although the United States signed the 1954 Hague Convention shortly after its formation, ratification was delayed due to military and political concerns. It was not until 2008 that the US Senate voted to ratify the treaty.

Copyright Protections for Photography

Federal copyright law provides a bundle of rights to original works of authorship, such as photographs. According to the US Copyright Office, a work is original if “it is independently created and sufficiently creative”.

Once a work is fixed in a “tangible medium”, which for photographers occurs at the time the photograph is captured, it is generally protected by copyright, even absent a formal registration. However, § 105 of the Copyright Act provides an exception for works created by federal government workers as part of their employment, stating that those images are a part of the public domain.

Notably, misappropriation of photography does not occur:

• if the same object or subject is photographed by another;
• if another photograph captures the same concept; and
• if a photograph is in the “public domain”, as those images are no longer eligible for copyright protections, either due to termination of the copyright term, or because they were never eligible for protection to begin with. 

Additional Protections for Photography

California and federal laws that apply to other types of photographs may include:

• right of publicity laws, which under CA Civ. Code Sect. 3344.1, safeguards the right to publicity up until 70 years from the date of their passing. If the subject of one’s photograph is recognisable, one would want to ensure that one is not infringing on the right of publicity before attempting to use the photograph for commercial purposes; and
• privacy laws – California law protects against the “intrusion upon seclusion” of another. For instance, if a photo is taken of someone through the window of their home, that may be unreasonably intruding on the individual’s rights. The right to privacy exists for the duration of the individual’s life, and in California, this right typically does not continue after death.

It is important to be mindful of potential infringement of others’ rights. Additionally, note that the laws referenced represent only a selection of those relevant to the art market and are not an exhaustive list. Relevant laws may also vary widely across different jurisdictions. Additionally, other jurisdictions may have additional resources aimed at protecting photographs.

Generally, the term NFT or non-fungible token is a term coined for digital assets that are often attached to the ownership of art such as music and photography. This ownership is documented on a “blockchain” which serves as a digital ledger that stores data across a network without relying on a central authority. The non-fungible nature of an NFT means that it possesses individual characteristics that prevent it from being identical to similar tokens.

Inauthentic and counterfeit NFTs can circulate the market. For example, a common “Rug Pull” scam occurs when a group of individuals works together to create a high demand for particular NFTs, causing prices to soar. Once the NFT hits a pre-decided price point, the group cashes out, pulling their money and leaving the remaining purchasers with a severely devalued asset. Another common scheme involves con artists creating social media profiles that appear to belong to genuine NFT organisations and using them to sell fake NFT artwork, promote fake NFT endorsements, and advertise bogus NFT giveaways.

It is important to acknowledge that NFT markets often lack essential safeguards and governance mechanisms, as they often fail to provide two-factor authentication methods and do not request the information necessary for identity verification. The laws relating to this issue continue to evolve and are in a very nascent stage at the time of writing.

Planning for the generational transfer of an artwork or art collection requires the transferring party to establish a governance plan that includes key elements such as cataloguing, authentication, provenance documentation, copyright considerations, licensing rights and archiving strategies. This plan should clearly define the transferring parties’ goals; for instance, the party may wish to maintain the integrity of the collection.

Additional measures that may assist in the generational transfer of artwork include:

• evaluating the market value of the artwork;
• obtaining guidance from professionals such as art consultants, lawyers and accountants who specialise in art asset management; and
• drafting a detailed will or trust that formalises the transfer

To ensure the generational transfer of artwork is handled properly and in accordance with the legal requirements of the jurisdiction, individuals are strongly encouraged to consult with an experienced estate planning attorney who can tailor a plan to their specific collection and goals.

Artwork succession can be complex, particularly without a will or trust.

“Intestate” refers to the legal process that occurs when a person dies without a valid will in place, leaving the distribution of their property and assets to be determined by the relevant jurisdiction’s intestate succession laws. Because intestate proceedings can be complex and vary significantly by jurisdiction, it is advisable to consult with a qualified estate planning or probate attorney, including regarding the preparation of a trust to protect an art collection.

The federal and state tax implications of gifts and donations of artwork can be complex and nuanced. Anyone interested in understanding how, whether and to what extent a particular transaction would be considered a taxable event should consult a tax lawyer and/or certified public accountant.

The federal and state tax implications of the inheritance and donation of artwork can also be complex and nuanced. Anyone interested in understanding how and whether a particular transaction would be considered a taxable event should consult a tax lawyer and/or certified public accountant.

Generally, artworks can be placed into a trust through documents prepared by a qualified trust and estates lawyer. The issues regarding transfers to a trust, and the federal and state tax implications of inheritance and donations of artwork can likewise be complex and nuanced, particularly because tax treatment and availability of specific kinds of trusts at any given time can change dramatically. Anyone interested in understanding how and whether a particular artwork can be transferred to a trust should consult an estate planning lawyer, and in the event of any issues relating to tax treatment of that transfer should consult a tax lawyer and/or certified public accountant.