Art Online

Many myths abound, and there is much ignorance and misunderstanding about the use of images online and the sale of works using e-commerce.

What are the key issues involved, is there any legal protection and have any good practices developed?

Online use of images
Reproduction and publication of copyright images is the exclusive legal right of the copyright owner, subject to certain exceptions. This means that only the copyright owner can legitimately scan an image and transmit it online; one of the notable exceptions under UK copyright law is that a copyright work may be reproduced, without the copyright owner's express authority, if such reproduction is to advertise the sale of the copyright work. Last month's column (AM251) explored the previsions of a new EU Directive which, when it comes into force in the New Year, will enable public bodies to transmit images for non-commercial purposes, without the copyright owner's express authority.

Quite apart from selling, the internet has been increasingly used by artists, museums and galleries as an important new tool; either for making new work, or for bringing visual artwork to a much wider audience. The potential for engaging a wider audience in looking at visual work is great indeed – many people who would not otherwise enter a museum or gallery would appear to be much more amenable to viewing work online. This presents opportunities and challenges for both artists and administrators, public and private.

Last year, Tate and MOMA New York investigated the establishment of a partnership to create a commercial website to market their goods and services, including virtual trips around their collections. The aim of this unique venture was commercial but was recently dissolved. In order to preserve their respective tax-free/charitable statuses, a new trading company will be established and will covenant its profits to its original non-commercial parent-bodies.

Online sales
Some auction houses and other dealers have developed online sales services, and buyers need to be aware of the issues involved. Auction houses normally act as agent for the seller at the live sale, write the catalogue and guarantee the work's authenticity, take a seller's commission and a buyer's premium, and usually do not reveal the seller's or buyer's identity. The law which would govern any disputes over the sale would normally be the law of the place where the sale occurs – the auction house.

With online sales, the auction house would not normally act as the seller's agent, the seller would write the catalogue entry and guarantee the work's authenticity, commission rates and premiums would be negotiated between the parties involved, and the seller's identity would be revealed. The law which would govern disputes over sales would normally be the place where the online service is located (and the transaction completed). In other words, the auction house acts as a sort of clearing house to process the transaction between the seller and buyer; the two contracting parties would need to check out each other's bona fides (as to authenticity and ability to pay), instead of relying (as traditionally) on the auction house for these things. Good practice suggests that potential buyers and sellers carefully check the terms and conditions of any online sales with the auction house before committing themselves; similarly, with one-to-one dealings online.

With conventional sales, buyers are responsible for examining sale items before bidding; with online sales, a written report on the condition of the work is usually made available for a week or so before bidding begins and arrangements can be made for inspection by buyers if they wish to do so.

Some questions answered

Can traders evade legal responsibilities for their online transactions?
Most legal jurisdictions in the developed world will offer remedies against traders operating from within their legal territory; for example, a company whose trading or registered office is based in the UK would be subject to UK law.
Do victims of breaches of the law always have to bring their cases in the country where the trader is registered or operates?
Not necessarily, most developed countries have legal rules which enable complainants to bring proceedings in the country where any damage was done or loss occurred – often the country where the complainant is based or trading.

Are websites protected against copying or other forms of abuse?
The layout and design of a website, including visual images and graphic design, will be protected by copyright law, so that website owners can use their legal rights to deal with unauthorised users of their original designs and images. However, digital watermarking or encryption are useful tools to be employed (if possible) to put in place technical obstacles to would-be infringements.

What about names and addresses?
Most developed countries have a scheme for registering a domain name and address; these schemes prevent duplication of data and confusion among online users. UK law recognises the economic value of registered domain names and addresses, and successful cases have been brought in the UK courts to prevent unscrupulous traders registering names to which they have no legitimate trading claim. For example, if someone (who had no legitimate reason to trade as Art Monthly) registered the name and address for Art Monthly (so that they could try to sell the registered name to the real Art Monthly), they could be prevented from doing so.

Online selling: the reality
It has been widely reported that, following the dot.com/Nasdaq failures during 2000, online sales services have reduced substantially. Earlier this year, for example, artnet.com (an online art auction service) stopped selling paintings to concentrate on prints and photographs (in order to reduce its overheads) and Sothebys.amazon.com (a similar venture to artnet) ceased trading alone and merged with Sothebys.com. One of the key problems is that, however convenient online selling may be, buyers really do need to inspect the works before bidding. Nevertheless, it has been estimated by respected internet market researchers that the online art market was valued at around £200m in the year 2000 – and was rising. It is too early to predict how this new vehicle will develop and whether it will survive or thrive.

© Henry Lydiate 2002

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This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material. The article is for information only, and not for the purpose of providing legal advice. Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.