Summarize

Italy has one of the most prominent art histories in the world, strong cultural patrimony rules and highly developed sector of art lawyers. ArtLaw.club had an honour to talk to Mr.Massimo Sterpi, a partner and the Head of the Art Law Department of a leading international law firm Gianni, Origoni, Grippo, Capelli & Partners of Rome, Italy.

[the text is a transcript of an oral conversation]

- Dear Mr.Sterpi, your office is a leading independent, international law firm, represented not only throughout Italy, but also in many other jurisdictions. Are you mainly working with one type of questions, or is it a general practice?

- My office is a general practice with around 450 lawyers. We cover all fields, with me being at the same time the Co-Chair head of the Intellectual Property Department and the Head of the Art Law Department.

- It seems impossible to work in Art Law without being passionate about art. What came first for you - your interest in art that led to a legal specialization or vice versa?

- It all started from a good combination of circumstances. I have always been a specialist in intellectual property, and, of course, within intellectual property I was dealing with many issues related to copyrights. At the same time my passion for art resulted in me being a collector of contemporary art. As I was very much involved in the art world, I started first giving advice to friends, then little by little from friends I expanded to acquaintances, and then I went on to represent important artists, galleries, collectors, museums, art institutions, etc. Over the years (and I started my career about 20 years ago) this has grown up into a very substantial area of activity. I believe that my current firm encompasses the largest group of fully active art lawyers.

- How much of your time actually is devoted to art law issues?

- I devote about half of my time to that area, and then I have three associates working with me basically doing art law on a permanent basis. On top of that, I have other partners that are involved in specific areas related to art law, including taxes, trusts and estates and administrative law.

- It was mentioned in your profile that you are an angel investor. Are you investing and providing expert assistance to art entrepreneurs?

- I am actually not an angel investor in art. I am an angel investor in startups, even if some of them are active in the artistic field, such as one creating music with artificial intelligence.

- Are there many art tech startups?

- Yes, there is a growing number of startups in the art tech field, most of which focused on the application of the Blockchain to art.

- How would you evaluate modern technologies, including blockchain, which are actively capturing the art market?

- I recently organized a presentation on the impact of disrupting technologies on the art market, during the International Bar Association annual meeting in Rome. There I touched upon most of the emerging trends. Blockchain is used to create works, to protect their circulation, to permit new business model in the distribution of artworks, to introduce innovative system of payment to artists. Additionally, I examined the new and emerging issue of tokenization of the value of certain artworks, which make them shareable, available to a large number of collectors. And then also the impact of artificial intelligence on creation of artworks.

- Do you think that these technologies can help to eliminate the problematics existing in the art market?

- Partially. I always divide the market into three areas. One area is new digital artworks. For digital artworks that are created now, if they are ‘enveloped’ in a blockchain, this technology can make their provenance and their authenticity certain. That would be a very good solution, but again only applicable to digital works created now. The second area is when you have a physical work created now and you need to ensure an immediate link between this physical artwork and information about it on the blockchain. When the artwork is separated from the blockchain, even if you have all the data stored in the blockchain, you still have a risk of substitution or loss. The third area covers old artworks whose data you have decided to include in the blockchain. In this case no technology is capable of fully eliminating the problems relating to authenticity and past provenanc. Even though in many situations blockchain may be useful, it is not 100% waterproof.

- What about the disputes related to art objects? What distinguishes art law disputes from other asset disputes?

- There are many differences. First, the monetary aspect normally is not the most important one. Generally the issue of reputation is at least of equal importance to the parties. It is of vital importance to take this into account in art related contentious matter, since the moral side (reputation, integrity of the work, image of the artist) might be of higher importance than just financial issues.

- Are there considerable differences in approach (regulation/practice) to art related disputes in different jurisdictions?

- In continental Europe we have a much stronger influence of moral rights (that permit to protect paternity, the integrity of the work, and the reputation of the artist linked to that). There are also many other differences depending on the subject matter of the dispute. One is, for instance, the applicability of different regimes concerning statutes of limitation and adverse possession. Another one is the possibility for the original owner of a stolen artwork to recover it from someone that bought in good faith. Many times, the selection of the jurisdictions and the applicable law completely change the potential outcome of the case. Here is the clear example of such difference: if a piece was stolen from a house and then acquired in good faith by third party, in The US the person that owned the stolen piece can request the restitution to the current owner and take the piece back, whereas in Italy, if a new owner bought it in good faith, he should not return the work and the work cannot be taken from him.

These very different rules must be considered, studied and taken into account when deciding a strategy in a case involving parties from different jurisdictions.

- What is the best way to deal with these types of disputes? Is it a litigation or ADR methods?

- The first thing is to have a clear legal framework (to understand what is the applicable law) and the positions of the parties. Of course, there are ADR procedures that are possible. I just spoke about them on a UIA Conference on International Arbitration last week in Bilbao. Even if you decide to arbitrate an art dispute rather than to go to court, you must be careful. The arbitrator must always take into account the jurisdiction where the decision (the arbitration award) will have to be enforced, as even if a certain decision is perfectly acceptable under the law that was applied in the arbitration, there might be public order rules, that can make the decision unenforceable in other countries.

- What are the main pros and cons of arbitrating the art dispute?

- The good part is that you can appoint an arbitrator which is competent about the issue, whereas judges are very rarely conversant with these matters. Art law is very unique combination of knowledge of the law and the knowledge of how the art market functions and there are not so many people having this double competence.

The second is of course speed, since the parties to arbitration may state the deadline by which the arbitration award must be rendered, which is not possible in case of litigation (the party is not eligible to determine a deadline for the court).

The third one is confidentiality: the decision of the court is public, whereas the arbitration award can be made entirely confidential. It could be an advantage because art related issues are normally quite delicate, and confidentiality may be a big advantage.

Among disadvantages I would name costs, of course. Then, as mentioned above, the risk that something in the arbitration award is not compliant with foreign law, especially if the parties fully relied on arbitration and were convinced that the decision would be enforceable automatically everywhere.

- Is it common to Italy to have mediation in art-related disputes?

- It is emerging. The Arbitration Chamber of Milan launched a mediation service in 2015. Till now about 35-40 cases were actually mediated there, apparently, with a very high success rate (80%, they claim).

There are also other entities providing similar mediation services, including the Arbitration Chamber of Venice. They offer mediation and arbitration for art related disputes. And then there are similar bodies in Spain, the Netherlands, in other countries. All of them were created in the last three years, thus this is a very strongly emerging phenomenon.

- Why you consider it to be a growing phenomenon?

- This is an interesting question. Probably because the art market was in the past very unstructured, as were the relationships between the market participants, and art related disputes were very difficult to litigate, because there was very little evidence. Payments were made in cash. People were just shaking hands in a transfer deal, guarantees were not written. It was not easy to litigate such cases. Now the market is much more structured. There is so much money put into this market and people that invested money therein want to be protected. There is a large number of disputes in art law before the courts and the courts are not very well suited to understand the dynamics of the art market. So, the emergence of art mediation and arbitration is probably the response of the art market trying to create ADR procedures that will give a better response.

- Could you please describe some most memorable cases where you were engaged in?

- I can mention few cases that were published. For instance, I represented the famous artist John Baldessari against the Alberto and Annette Giacometti Foundation in Paris. It was an art appropriation case, where the artist decided to replicate the sculptures of standing women by Giacometti, while different in size and dressed up as fashion models (if compared to the original sculptures which were naked). Baldassari’s work was about the transformation of a female body. Actually, the comparison was between the thin bodies of Giacometti that were inspired by the people coming out of the concentration camps and the very row-boned fashion models that are self-deprivating of food to be able comply with the fashion standards. The Giacometti foundation sued for copyright infringement but we were able to demonstrate that there was a (cold) parodic purpose around that. The judge also admitted that there was a completely different meaning of the work of Baldessari with respect to the ones of Giacometti and there was a clear homage of Baldessari to Giacometti, since the title of the show was “Giacometti variations”. That decision has since become a leading international case on appropriation art.

Another one again was on the appropriation art, where we represented Fondazione La Biennale di Venezia against an artist that was challenging the copying of his archive to create another satiric work that was exhibited at the Venice biennale.  We also won the case on satire/parody grounds.

Then, we were involved in a number of cases involving fake artworks, many times carrying on investigation at international level to reveal the frauds.

- What is your personal attitude to appropriation art – is it a new movement or a copyright infringement?

- It depends on the purpose. If the purpose is to say something completely different, to make a parody of a preexisting work, then of course it is a matter of freedom of expression. However, if it is a commercial duplication without any additional meaning, just to take advantage of the creativity of others, this is an infringement. What differentiates mere copying from appropriation art is that there should be a significant change in meaning from the original, appropriated work.

- Are there provisions in Italian law allowing for similar exceptions as a fair use doctrine in the USA does?

- We do not have a law on fair use in most of the European continental countries, but we have other arguments that can be used to obtain similar results. One is actually the exception of parody that, even if it is not actually mentioned in the law, is considered a general principle recognized even by Italian constitution as a form of freedom of expression. Most cases in the USA, like the ones with lawsuits against Jeff Koons, Richard Prince and others, were judged on the basis of the fair use exception, whereas in Europe they were judged mainly based on the parody defense.

- You mentioned Giacometti and his work inspired by the people coming from concentration camps. What is the Italian attitude toward the restitution of artworks to the heirs of Holocaust victims? Are these cases common to Italy?

I was involved in some of these cases, advising foreign clients which were involved in restitution cases in the USA, where some legal issues under Italian law were involved. However, the art looting in the Nazi area did not really generate any case in Italy, as far as I know, the Jewish community decided to go over that time and there were almost no cases brought by Italian families for Holocaust related art looting.

Otherwise, Italy is very active in reclaiming the return of art objects which were excavated or exported illegally. Here I advised many foreign institutions on return claims made by the Italian State.

- How do you evaluate the current standing of the Italian art market?

- The Italian market, because of the very strict rules contained in our Cultural Heritage Code and high taxation is actually is very limited. Estimate of the Italian art market is between 300-500 M euros per year, that accounts to about 1% of the world art market.

What we see is that there is very limited interest for the mid market, it is sort of abandoned. Typically, it was the area where bourgeois collectors were buying artworks, lets say between 20k and 200K euros, and currently it is suffering because of the prolongated economic crisis. The market still exists for very cheap artworks, which are not much of an investment in art, but more an investment in decoration. Then, not in Italy but at international level, there is still a very strong market for important artworks, from 200K euros and more, especially for the works that are worth millions.