The Multibillion-Dollar Face-Off : A precedent-setting case between artists and corporate America is scheduled before the Supreme Court

Who owns the copyright to an artwork--the artist who created it or the group that commissioned it?

The question will be answered in an upcoming U.S. Supreme Court case that could be a bonanza for free-lance creators and a disaster for business.

Community for Creative Nonviolence vs. Reid may sound like a street fight between an advocacy group for the homeless and a sculptor from Baltimore. But the argument over who owns the copyright to James Earl Reid’s socially critical Nativity scene, “Third World America,” is shaping up as a battle between the creative and corporate forces of America.

The case involves a cast-polymer-and-fiberglass, life-size sculpture that depicts a homeless family seeking warmth on a steam grate. Instead of portraying a traditional Holy Family, Reid has created a creche of street people: a mother, father and baby who keep their belongings in a shopping cart.

The Community for Creative Nonviolence, headed by Mitch Snyder, an advocate for the homeless, commissioned the piece for Washington’s 1985 Christmas celebration, Pageant of Peace. The two parties didn’t sign a contract but agreed that Snyder’s group would pay as much as $15,000 for materials and the artist would donate his time and expertise.

A legal dispute over the copyright to “Third World America” erupted when the group wanted to send Reid’s sculpture on tour and published pictures of it on greeting cards and calendars to raise funds for the homeless. The 46-year-old artist says he is sympathetic to problems of the homeless--and his donated time supports that contention--but he believes that the reproductions misrepresent his work and that profits from reproductions of his work are rightfully his. Snyder contends that Reid became greedy when he saw an opportunity for profit, but Reid says he is simply trying to support his own family.

The U.S. Court of Appeals for the District of Columbia Circuit ruled that Snyder’s group, which owns the sculpture, must share the copyright with Reid. Snyder appealed to the Supreme Court, which plans to hear oral arguments for the case in late March.

Meanwhile, arts advocacy groups have lined up behind Reid, while major publishers and computer companies have weighed in for Snyder.

On Snyder’s side are Time Inc., the New York Times, the Magazine Publishers Assn., the Hearst Corp., Information Industry Assn., Computer and Business Equipment Manufacturers Assn. (representing Eastman Kodak Co., NCR Corp. and Apple Computer Inc.) and Intellectual Property Owners Inc. (a trade association that includes IBM, Dow Chemical Co. and Minnesota Mining and Manufacturing). In general, these groups argue in briefs filed with the Supreme Court that a decision for Reid would stifle their creativity and flexibility in working with free lancers.

Supporting Reid are about 50 groups of artists, writers and arts advocates such as Volunteer Lawyers for the Arts, Copyright Justice Coalition, Graphic Artists Guild and Advertising Photographers of America. A Washington-based group called Artists and Writers Copyright Committee: The James Earl Reid Legal Defense Fund has been organized to raise money for Reid’s legal expenses, expected to total about $70,000 to $80,000. But the most significant development, according to Joshua Kaufman, Reid’s attorney, is that the solicitor general has filed a brief on behalf of Reid. The Supreme Court often follows the solicitor general’s viewpoint in difficult cases involving federal law.

Why such a high-profile fuss? And why has a citizens’ action group allied with corporate giants? It all boils down to economics.

If the court rules in favor of Snyder, commissioners of free-lance artists, photographers, writers and computer program designers will probably continue to control copyrights to free-lance work--and reap profits from reproductions of it. If Reid wins, free-lance creators stand to gain those profits for themselves. Estimates of the potential loss to business--and gain for artists--run as high as $43 billion.

“It’s an exciting development,” said Los Angeles attorney Gregory Victoroff, a specialist in arts copyright law who often lectures on the subject, conducts biweekly copyright clinics for California Lawyers for the Arts and has compiled a practical guide book, “The Visual Artist’s Manual,” published by the Committee for the Arts of the Beverly Hills Bar Assn. Barristers.

“This is the most important artists’ rights case of the decade,” said Robert Bedard, director of ArtPac, a Washington-based group that lobbies for legislation in support of artists.

Kaufman went one step further, declaring, “This is probably the single most important philosophical and financial issue to confront artists” in many years.

At issue in Community for Creative Nonviolence vs. Reid is the “work for hire” doctrine in the Copyright Act of 1976. The doctrine is considered the law’s major “pitfall” for artists by Tad Crawford, author of “The Visual Artist’s Guide to the New Copyright Law.” The act stipulates that an employer or other commissioning party owns the copyright in a “work for hire” situation as if he were the creator of the work. (In the pending Supreme Court case, Snyder contends that he directed the creation of the sculpture and is therefore entitled to be considered its creator, while Reid dismisses the claim as absurd.)

According to the act, “work for hire” is work done under a contract that gives the copyright to the employer, but in practice many artists have effectively relinquished copyrights without signing such contracts. Kaufman estimates that 95% of commissioned free-lance work is done without contracts.

“An artist’s copyright comes into existence at the moment of creation,” Victoroff said. “In the case of a photograph, that moment occurs when the picture is developed and fixed in a tangible medium in which it can be visually perceived. For an employer to get the copyright from the artist, he must have one of two things: a written ‘work for hire’ contract (whereby the artist relinquishes the copyright to the employer) or an employment situation in which the employer pays the artist a salary, takes out withholding tax and provides workman’s compensation insurance, disability insurance and all the good things of formal employment.

“But it doesn’t work that way in real life. Artists are mostly free lance and in the past they have been triple losers: they haven’t had contracts, fringe benefits or copyrights,” Victoroff said.

A recent case in Los Angeles has led Reid to believe that the legal wind may be blowing his way. The U.S. 9th District Court of Appeals last month ruled that the late Patrick Nagel’s estate owns copyrights to four sets of lithographs produced as a promotional campaign for ITT Cannon and stopped a publisher’s attempt to produce poster editions of the prints.

The 1979 “promotional giveaway was less than successful,” and ITT Cannon “was left with many extra sets of lithographs,” according to the Jan. 17 Daily Appellate Report. Stefan Gommerman, owner of the Eva and Steve Dorog Gallery in Los Angeles, in 1985 bought the remaining prints from ITT Cannon along with copyrights.

Preparing to publish one of the lithographs as a poster, Gommerman registered a copyright. But Nagel’s widow, Jennifer Dumas, contended that Nagel had been an independent contractor and retained ownership of the copyrights. Dumas filed a conflicting copyright and sued for damages and infringement. The court granted Dumas an injunction and restrained Gommerman from reproducing Nagel’s lithographs.

The decision states that Nagel did not create the art as “work for hire” because he was not an employee of the company, according to the Copyright Act of 1976. The court decided that a commission is “work for hire” only if it is done by a salaried employee or the artist has signed a written agreement to “work for hire.”

According to Victoroff, there’s another aspect to the “work for hire” issue that may benefit artists in California. “If employers get real smart and decide to use ‘work for hire’ contracts, under California law the artist can take advantage of a fantastic provision, Section 686 of the labor code. According to this law, anyone who commissions an artist under a ‘work for hire’ contract is automatically defined as an employer, and if he is an employer he is obligated to provide all kinds of benefits,” he said.

Victoroff also pointed out Section 203 which imposes penalties on employers who do not promptly pay terminated employees. He said he had used the provision to start investigations and effect settlements involving free lancers but that many labor commissioners were unaware of the law or were not using it to full extent possible.

Free-Lance Difficulties

American artists who do free-lance work outside the country may have special difficulty with copyrights, Victoroff said. For example, an artist who made a deal with a fine-art publisher to reproduce 400 copies of his paintings and display them in a chain of hotels in the Far East recently discovered that the publisher actually churned out and distributed thousands--possibly tens of thousands--of reproductions. The unidentified artist probably has no recourse because the works were produced in a part of the world that does not conform to international copyright laws.

Artists’ copyrights are effective for the life of the artist plus 50 years. That seems clear enough, but disputes are common. While the concept of “work for hire” has only recently come into artists’ parlance, copyright issues involving the principles of “fair use” and “moral rights” are more familiar.

“Fair use” of copyrighted material allows certain noncommercial uses without the artist’s permission, such as incorporating a small part of someone else’s art in an otherwise original work or reproducing an artwork to illustrate criticism, commentary, instruction or research. “Moral rights” refers to artists’ rights to be credited for their work and to prevent its destruction or reproduction in distorted form.

Over the years, artists, publishers and manufacturers have all appeared to be villains in copyright infringements.

Leonardo da Vinci’s “Mona Lisa” had long since passed into the public domain before Marcel Duchamp gave her a mustache, but art borrowers are not always scrupulous about their uses of others’ images.

New York artist Sherrie Levine made a name for herself as an “appropriationist” in part by photographing Edward Weston’s photographs of nudes and displaying them as her own work. This piracy was embraced by critics-in-the-know as a timely challenge to the concept of originality, but Weston’s fans were not amused. The Center for Creative Photography at the University of Arizona in Tucson, which acquired Edward Weston’s estate and copyrights to his work, didn’t charge Levine with copyright infringement, however. “We would never do that to an artist,” said the center’s Nancy Solomon.

Some artists fail to protect their own copyrights. Salvador Dali sold copyrights to many of his prints produced in the final decades of his life, thus opening the floodgates to a torrent of fraud.

Living artists retain copyrights to their works in museum collections and these rights pass to their estates for 50 years after death. Museums generally control reproductions of older works in their collections by copyrighting photographs of them and selling reproduction rights on a case-by-case basis, but the system isn’t fail-safe. An endless array of parodies of Grant Wood’s “American Gothic” is apparently the result of the Art Institute of Chicago’s failure many years ago to protect the copyright of the painting, which is in its collection.

“I’m not sure how the parodies came about, but we have never litigated on them,” said Lyn Delliquadri, the museum’s director of graphics and reproductions.”At this point I think most art historians feel that all of the send-ups are part of the history of the painting.”