Art &
the Law
WFU Community
Law Clinic
Spring 2014
Associated Artists of Winston Salem
March 19, 2014
Disclaimer
This presentation is for informational
purposes only. No information
conveyed today should be taken as
legal advice. Please consult an
attorney about your specific situation.
What is Art Law?
Intellectual Property
Trademark and Copyrights
Trademarks
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Prevent consumer confusion
Words, phrases, symbols, and designs on
goods/services in the marketplace
Requirements:
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Distinctive
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Use in commerce
Rights last indefinitely (as long as the mark is
still being used)
Copyrights
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“Copyright Clause” in the U.S. Constitution
Protect the expression of an idea
“Original work of authorship”
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Literary works
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Musical works/sound recordings
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Dramatic works
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Pictorial, graphic, sculptural works
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Motion picture/audiovisual works
Copyrights
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Requirements:
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Original
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Fixed
Author owns the
rights unless “work
made for hire”
Rights last for a
limited time
Infringement
Exclusive rights to:
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Reproduce the work
Create derivative works
based upon the work
Distribute copies of the
work
Perform the work
publicly
Display the work
publicly
Contracts and
Contract Negotiation
Understanding Your Bargaining
Power
Contracts for the Sale of Art
Questions to consider:
● What rights do I retain after the sale of my
artwork?
● What happens if the buyer wants to resell my
art?
● What if the owner wants to loan my art to an
exhibit?
Consignment Agreements
Questions to consider:
● What rights am I giving up to the gallery?
● Who sets the price for my art?
● What percentage commission does the gallery
get?
Insurance
Protecting You and Your Art
Insurance – What if?
● An electrical fire burned your home garage
studio and its artwork to the ground?
● Accumulated ice caused a tree to fall into your
leased studio destroying your tools and work
in progress?
● Your art show tent is knocked over destroying
blown glass in your neighbor’s booth and
injures a child?
Insurance – Basics
● Homeowners insurance usually excludes most
business property and liability
○ For insurance purposes, you are “in business”
if you offer goods or services for sale
● Insurance held by a landlord does not cover a
tenant’s property
● Many art distribution agreements, whether for a
short term lease or consignment, do not protect
or insure the artist or their work
Insurance – Business Coverage
● Property
○ Building / Structure
○ Personal Property
○ Inland Marine (Fine Arts)
○ Personal Property of Others
Insurance – Business Coverage
● Liability
○ General
○ Product and Operations
○ Errors and Omissions
○ Umbrella
Insurance – Lease, Loan &
Consignment
● Generally, an artist and their work are not insured by
the representative and they cannot be held liable
○ Even if the representative has its own insurance,
artwork leased or on consignment might be
excluded from coverage
● Artists should ascertain the specifics of the
representatives insurance policy, including:
○ Policy Limits
○ Types of Risks Insured
○ Exclusions
○ Value Basis
Insurance – Lease, Loan &
Consignment
● To ensure that the representative’s
statements are accurate, request a
certificate of insurance evidencing the
terms of the policy
● To ensure the policy is not unilaterally
amended or cancelled, Request written
notification of any change in the policy
conditions.
Insurance – Lease, Loan &
Consignment
Sample Contractual Language (In Favor of Artist)
RISK OF LOSS OR DAMAGE; INSURANCE
The Gallery shall be responsible for the safekeeping of all consigned
Artworks while they are in its custody. The Gallery shall be strictly liable to
the Artist for loss of or damage to the Artworks (except for damage
resulting from flaws inherent in the Artworks), to the full amount the Artist
would have received from the Gallery if the Artworks had been sold. The
Gallery shall provide the Artist with all relevant information about its
insurance coverage for the Artworks if the Artist requests this information.
Insurance – Transportation
Sample Contractual Language
TRANSPORTATION RESPONSIBILITIES
Packing and shipping charges, insurance costs, other handling
expenses, and risk of loss or damage incurred in delivery are the
responsibility of the Artist for delivery of the Artworks from the
Artist to the Gallery, and are the responsibility of the Gallery for
delivery of the Artworks from the Gallery to the Artist.
Insurance – Closing Thoughts
● Understand the Scope of Your Existing Coverage
○ Home / Business / Property / Liability?
● Be Cognizant of All Loan or Consignment
Agreement Terms
○ Burden of Liability / Insurance?
● Acquire Appropriate Coverage
○ Inland Marine Fine Arts / General Liability?
Tax Issues
Income from the sale of art, and the
deductions that may be available to
you.
Tax – Business Deductions
Ex. IRS 1040 - Schedule C
Examples of expenses that you can deduct from your income…
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Home office
Insurance premiums
Interest on a business loan
Travel expenses
Training
Some tools and equipment
Examples of expenses you can’t deduct....
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Your time, skill, and experience
Personal travel
Personal use of your home
Tax – Depreciation
Ex. IRS form 4562
When you can take a depreciation deduction…
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It’s a business asset (computer, printer, etc.)
It’s “wearing out”
You purchased it
Calculating your depreciation deduction…
1. Take the total cost to you…
2. Divide by the item’s “useful life”...
3. Deduct this amount each year of the useful life
Tax – Clinic Services
The WFU Community Law & Business
Clinic can help with a variety of tax (and
tax-related) issues, including…
• Self-employment tax
• Organizing your business into a new
type of entity (LLC, corporation, etc.)
• Applying for tax-exempt status for
your charitable organization
Estate Planning
Art lasts forever, you will not.
What happens when we die?
Specifically, to our assets
• Intestate Succession
– The default distribution of assets when
there is no valid will
– Complex and can be Hard to Predict
•Varies state by state
Estate Planning
• Goals
– Orderly transfer of assets following
death
– Minimize taxation and expenses
• Wills
– Wills Generally
– Will Requirments
Estate Planning
• Each person’s situation is unique. If you
are concerned about the transfer of assets
upon your death, you should likely seek
professional assistance.
– An enforceable Will has strict
requirements.
When You Should Get Professional
Help
• Common Issues
– The issues discussed throughout the
presentation
– Formal agreements
– Legal documents
• Lawyers
– A Lawyer knows Your rights and the Law
– Each person’s issues are unique.
Wake Forest Community Law and
Business Clinic
• Address:
– 8 West Third Street, Suite 100A
Winston-Salem, NC 27101
• Phone:
– (336) 631-1953
• Ext. 1 & 3 – To leave a voice message
• Ext. 5 – To speak with a receptionist
• Website:
– community-clinic.law.wfu.edu