Buy Low, Sell High: Another Student's View

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Buy Low, Sell High: Another Student's View

Oct 29, 2014

Madeleine LaFerney

Madeleine LaFerney, a student in Jon Pfeiffer's Fall 2014 Media Law class at Pepperdine University, wrote the following essay in response to the prompt: "Nash is a struggling painter who lives in Chicago. He cleans swimming pools during the day, and paints at night. Nash has a few paintings for sale in galleries around town, but his paintings rarely sell. A few months ago, Donald, a well-known art dealer, offered to buy one of Nash's paintings called "Desert Sun.' Nash refused at first but since pool cleaning was slow, Nash agreed to sell the painting to Donald for $100. Later, Nash discovered that Donald re-sold it to the National Gallery of Art in Washington D.C. for $5 million. Is Nash entitled to any of the $5 million? Who does and should own the copyright now?"

Under the United States Copyright Law, an artist's work is automatically copyrighted the moment it is completed; however, this does not mean the art is formally registered. The best way to protect artists' work from acts of infringement is to formally register it. Furthermore, if it is ever necessary to take legal action, the artist will have to formally register it before proceeding to the federal court anyways. Registering is especially important for artists who believe that it is very likely for their art to be copied or replicated without permission. When it comes to selling the original art piece to a dealer or gallery, negotiating an arrangement with the buyer is even more important for the artist than formally registering the work.

Based upon the information provided, Nash should have known Donald was an art dealer, meaning Nash should have known to negotiate some sort of contract with Donald before selling his painting. It appears that Nash sold his painting, "Desert Sun," without discussing copyright ownership or potential profit. Donald's purchase gave him the right to sell the painting; however, Nash still has copyright ownership. Since Nash didn't negotiate a predetermined percentage of sales, Donald is fully entitled to the profit on his five million dollar sale. As the copyright owner, Nash has the exclusive right to display the copyrighted work publicly, even after selling the work. The National Gallery of Art in Washington, D.C. does not have the right to publicly display the painting without Nash's permission.

One way Nash could undo the sale would be if he proved that Donald lied or misled him when negotiating the painting's price. If Donald made the artist believer that his art was only worth a hundred dollars but knew he could sell it for much, much more, then Nash could take legal action. In this case, the sale would be fraud. Even if this wasn't the case, this situation still seems unfair. Nash should be entitled to a percentage of sales of his own work, even if it wasn't predetermined or negotiated, because he is the owner of the copyright.

Madeleine LaFerney is a senior at Pepperdine University majoring in Integrated Marketing Communication.

Jon Pfeiffer is an experienced entertainment and copyright trial attorney practicing in Santa Monica. Jon is also an adjunct professor at Pepperdine University in Malibu, California where he teaches Media Law. The class covers First Amendment issues as well as copyright, defamation and privacy.

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