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With an oral agreement in place that Cohen would curate the art that made it onto the walls of 5Pointz, Cohen began an extensive operation that included portfolio reviews, vetting, and building space allocations that allowed only high-quality aerosol art to be sprayed onto the building. The higher, and thus less accessible, spaces of the building were reserved for more permanent works that could last indefinitely. The tradeoff to obtaining a higher portion of the building as a canvas was that the work was also of higher quality. The lower spaces could have been painted over in as little as a few hours. Regardless, the parties agreed that each work was added to 5Pointz only through Cohen's curation, and Cohen had discretion to determine what works merited longer tenure on the walls. See, id. at 223-24.

After yearly rumors of 5Pointz's time coming to an end to make way for new housing development, in August of 2013 the day finally came when Wolkoff got approval from the City Planning Commission to start planning the housing project. Id. at 225. In response, several artists began to look for ways to preserve the site and their works. Ultimately, multiple artists sued Wolkoff and his real estate entities to enjoin the demolition of 5Pointz.

The merits of the case were first heard at a preliminary injunction hearing. After reviewing the evidence presented, the district court denied the Plaintiffs' injunction, but informed the parties that a written opinion would soon follow. In the interim eight day period, Wolkoff, "under cover of night," painted over the works across the 5Pointz complex partially or fully with white paint. See, Cohen II, 320 F. Supp. 3d at 434-35. At issue in the case was whether or not the destroyed aerosol art qualified for VARA protections under the "recognized stature" requirement of §106A. Just before closing arguments, the parties agreed to change from a jury trial to a bench trial, and Judge Block turned the jury into an advisory jury.

Legal Outcome

The Second Circuit opinion in Castillo affirmed all of the district court's legal findings that led to the largest award ever given under a VARA dispute. The district court made three important findings.

First, in a lengthy appendix to the court's opinion denying a new trial, the court went to great lengths to explain which of the 49 asserted works were of "recognized stature" such that they qualified for VARA protection. The trial court found that 45 of the 49 works qualified. At the outset, the court established that the fact that each work was curated by Cohen, a renowned artist in the field of aerosol art, was of importance. Additionally, following the Carter two-step framework, the trial court also evaluated "recognized stature" by considering whether the works had been recognized by "(1) art experts, (2) other members of the artistic community; or (3) some cross-section of society." See, Cohen v. G&M Realty L.P., Nos. 13-CV-05612(FB)(RLM), 15-CV-3230(FB)(RLM), 2018 U.S. Dist. LEXIS 99250, 27-28 (S.D.N.Y. Jun. 13, 2018) (Cohen III). The Cohen court considered expert testimony, the exposure of the works to the public, and the popularity of works in various forms, such as media recognition or tourist attraction, to conclude that only 4 of the 49 works, did not merit VARA protections.

Second, the court found that Wolkoff acted willfully, meriting damages of up to $150,000 per work. In particular, the trial court found that during the preliminary injunction hearing, Wolkoff knowingly misled the court in a sworn affidavit as to when 5Pointz demolition would begin. Wolkoff swore that demolition would need to begin by January 2014, but had not even applied for the demolition permits until April of the same year. See, Cohen III, 2018 U.S. Dist. LEXIS 99250 at 10-11. From a timing perspective, "VARA gives the artist the opportunity to salvage work upon receipt of a 90 days' written notice from the building owner." Cohen II, 320 F. Supp. 3d at 429. Thus, if Wolkoff had notified the artists as late as January that the building was going to be demolished, he would have satisfied the statutory notice requirement before the building was actually demolished.

In addition, the court relied on Wolkoff's demeanor at the hearings. Not only was he non-responsive to opposing counsel on cross examination, but he was also non-responsive to the court. Id. at 445. Wolkoff's lack of remorse in unnecessarily whitewashing the building without justification, rather than waiting 90 days for the artists to remove their works, and lack of candor with the court were common themes expressed by both the trial and appellate courts when assessing the maximum statutory fine as a deterrent for future infringers. See, id. at 447.

Third, and perhaps most importantly, the appellate court affirmed the lack of a temporal requirement to gain recognized stature as found by the district court. Although the Cohen works were "temporary," because all parties knew at some point in the not-so-distant future 5Pointz would be demolished, the works could still attain recognized stature. The Second Circuit found that 17 U.S.C. §101 very clearly defines what works qualify as works of visual art by expressly defining both what is included and what is excluded from the definition. The appellate court reasoned that in doing so, Congress clearly had the option to also distinguish between "temporary" and "permanent" works as well, but declined to do so. See, Castillo, 2020 U.S. App. LEXIS 5228 at 16. In their opinions, both the district and appellate courts relied on traditional copyright precedent holding that so long as a work is fixed in a tangible medium for more than a "transitionary period," the work can qualify for copyright protection and that a work "embodied … for at least several minutes" meets that requirement. Id. at 19. (citing Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121, 127-28 (2d Cir. 2008)). The court noted that Banksy's "Girl With a Balloon," which famously self-destructed with an in-built paper shredder, was a short-lived work that was both meritorious and widely recognized. See, Castillo, 2020 U.S. App. LEXIS 5228 at 17-18.

Practice Points

Practitioners and building owners should take note of the case for a few reasons. At the outset, a work that is not "a work for hire" creates additional considerations for property owners to contemplate before allowing artists to create visual works on their property. Owners should think carefully about the relationship between an artist and the owner. A work that would otherwise be protected by VARA can nonetheless be removed if an owner requests a signed waiver early in the process, or in the alternative, works with the artist to facilitate the removal of the work if a waiver was not in place. A prior agreement avoids litigation in the first instance and would be more conducive to an amicable relationship wherein the parties mutually benefit without fear of potential litigation.

But if parties nonetheless find themselves in the heat of litigation, Wolkoff's actions serve as a clear example of what not to do. Candor with the court and sworn testimony should not be taken lightly. Although Wolkoff was not expressly sanctioned for misleading the court or his actions during the preliminary injunction stage, the court's frustration with him is reflected in its opinion. The trial court expressly juxtaposed Wolkoff's actions by commending the way the artists "conducted themselves with dignity, maturity, respect, and at all times within the law" when analyzing the amount of damages to award. Cohen II, 320 F. Supp. 3d 421 at 447. "If not for Wolkoff's insolence," the award would have been statutorily capped at only one fifth of what was assessed. Id.

Lastly, how long a work exists is of no consequence to the analysis of whether VARA applies. Developers and practitioners should not immediately dismiss a work's ability to fall under VARA simply because it was viewable only for a short duration. While a work's tenure may factor into the evaluation of a work's recognized stature, the length of such tenure is not dispositive. An express, signed waiver is the only way to ensure that a work can be removed or destroyed unilaterally.

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Shaleen J. Patel is an associate in the Intellectual Property Department of Pepper Hamilton LLP, resident in the Boston office. He can be reached at [email protected].