Art Case Update - May 2025
Stuart Semple’s Easy Klein paint. Source: Culture Hustle Online Store.
Guest Work Agency is your go-to source for art-related legal cases and law reform in Australia, as well as select cases internationally.
In this story, Alana Kushnir and our Paralegal Lily Kruglova report on recent developments including a significant copyright law case in Australia, a French trademark dispute concerning Yves Klein Blue, a suite of new open access AI training licences, and more.
Australia
The Full Court of the Federal Court of Australia clarifies what constitutes a “substantial part” for the purposes of copyright infringement
In December Full Court of the Federal Court of Australia handed down its judgment in Hytera Communications Corporation Ltd v Motorola Solutions Inc, which has provided important clarification on copyright infringement of software, particularly the meaning of a "substantial part” under Australian copyright law.
The appeal concerned digital mobile radios supplied by Hytera and its Australian subsidiary. Motorola alleged that Hytera had incorporated parts of its code into the firmware of these devices. Hytera had hired a number of former Motorola engineer, followed by twelve more.
One of the central issues on appeal was the definition of "substantial part" under Australian copyright law, in relation to software codes. Under s13 of the Copyright Act 1968 (Cth) (Act), an infringement occurs when a person does an act that is exclusive to the copyright owner. Under s14, that act must occur must be done in relation to a “substantial part” of the copyright work or other subject matter. However, the Act does not define “substantial part,” and it has been left to the courts to interpret and develop the legal concept.
The Court confirmed that in the context of computer code, it is not sufficient to to focus solely on the significance of the copied code to a device’s operation when assessing whether a “substantial part” has been taken. Rather, the assessment must take into account the creative and intellectual contribution to the form of expression of the copied code, including its structure, the sequencing and selection of commands. If the copied code is derived from an earlier version code, a qualitative assessment of a “substantial part” of the copied code for the purposes of infringement can still be made.
In other words, in the context of computer code, “substantial part” requires a creative and intellectual effort to be made, notwithstanding that the copied code may derive from an earlier version of code.
Read the full judgment here.
The Federal Government has brought to end the Instant Artwork Write Off measure
The decade-long ability of eligible small businesses to claim artwork purchases up to $20,000 as a 100% tax write-off will cease on 30 June 2025.
Originally introduced in 2015 to encourage business investment and spending, the measure has seen various temporary increases to the threshold over the years. From 1 July 2023, the threshold for small business entities reverted to $1,000, before being temporarily increased to $20,000 for the period 1 July 2023 to 30 June 2024. This temporary increase was subsequently extended to 30 June 2025, though the extension has yet to be made law.
From 1 July 2025, all extensions will end. Depreciation for tax purposes will then be calculated according to the ATO’s tax tables, which set out the useful life of assets, or under the pooling rules. As a result, the immediate asset write-off limit for small businesses will fall from $20,000 to $1,000 from the 2025–26 financial year.
Many predict that this change could have a pronounced impact on the visual arts sector, which is especially susceptible to economic slowdowns. The absence of this measure could make the sector even more vulnerable.
Other than artworks, the instant asset write-off has been applied to depreciating assets used by small business such as motor vehicles, office furniture, computers and equipment.
International
UK’s Copyright Licensing Agency to Launch Generative AI Training Licence in 2025
The Copyright Licensing Agency (CLA), a UK-based not-for-profit organisation, has announced plans to introduce a Generative AI Training Licence, aiming for publication in the third quarter of 2025.
Designed as a collective licensing scheme, the GenAI Training Licence will operate in a manner similar to other established copyright collection models. It seeks to provide a standardised mechanism for compensating authors and publishers whose works are used in AI training, while also offering legal certainty to developers seeking access to large datasets.
The CLA emphasises the dual function of the licence: on one hand, to ensure fair remuneration for rights holders, and on the other, to offer practical, lawful access to training material for those developing generative models. This initiative is also intended to help smaller creators of copyright-protected work, who often lack the bargaining power to negotiate individual licensing agreements but would benefit from inclusion in a collective framework.
Mat Pfleger, CEO of CLA, commented on the initiative: “Our goal is to provide a clear legal pathway for access to quality content—one that empowers innovators to develop transformative GAI technologies whilst respecting copyright and compensating rightsholders and creators where their works are used.”
British Artist Stuart Semple Ordered to Pay Damages in Yves Klein Blue Trademark Dispute
British artist Stuart Semple has been ordered by a Paris court to pay €16,000 in damages and legal fees for trademark infringement over his sale of “Easy Klein Incredibly Kleinish Blue”, a blue paint product that references the iconic International Klein Blue (IKB) developed by the French artist Yves Klein.
The legal action was initiated by Yves Amu Klein, the artist’s son and the operator of Pia Gallery in Scottsdale, Arizona. The complaint was filed on behalf of both himself and Blue Bay Limited, which owns the international trademark “Yves Klein” registered in multiple counties under the Madrid Protocol, which allows simplified international registration of trademarks. The trademark specifically covers “paints and dyes of all colours; blue (dyes or paints).”
Semple, known for his stance against the exclusivity and ownership of colours in art, developed “Easy Klein” as part of his broader mission to democratise artistic materials. He has been outspoken in his belief that no individual or company should control access to colours.
Semple’s product is packaged in a design that appears to imitate the packaging of CK One perfume, produced by Calvin Klein, particularly through its use of the same distinctive font, packaging colour, and branding placement. In addition, Semple’s marketing of “Easy Klein” included references to Yves Klein and his use of the distinctive ultramarine blue on the product listing on his website, as well as the use of promotional imagery accompanying the product, that mimicked a photograph of Klein holding up a paint-dipped palm.
The ruling provides Semple with a two-month window to appeal.
U.S. Court Affirms Copyright Law Does Not Protect Works Created Fully by AI in Thaler v. Perlmutter
On 18 March 2025 in Thaler v. Perlmutter, the U.S. Court of Appeals for the District of Columbia affirmed that the Copyright Act of 1976 does not protect works created entirely by artificial intelligence. The ruling follows a growing body of U.S. case law and recently published U.S. Copyright Office report on Copyright and Artificial Intelligence.
Dr. Stephen Thaler tried to register a copyright for an image titled ‘A Recent Entrance to Paradise’, which was generated by his AI system, the “Creativity Machine”. In his application to the U.S. Copyright Office, Thaler listed the machine as the sole “author.” The Office rejected the application, and Thaler challenged the decision in court. For more background reading, see our previous Art Case Updates on other cases brought by Dr. Stephen Thaler here and here.
Writing for the unanimous panel, Judge Patricia Millett emphasised that “[a]uthors are at the center of the Copyright Act.” While the statute does not expressly define the term “author,” the court held that the Act’s structure and underlying assumptions support a human authorship requirement. For instance, provisions related to ownership, inheritance, and copyright duration are all premised on characteristics unique to human authors, for example, the capacity to own property. The Court noted that machines cannot legally sign documents, express intent, or satisfy the legal standards for joint authorship.
The decision follows a related ruling in Thaler v. Vidal, where the U.S. Court of Appeals for the Federal Circuit upheld that an AI system could not be named as an inventor under the Patent Act, which also limits inventorship to natural persons.
Read the full decision here.
Pace Gallery Sued Over a Contested Louise Nevelson Sculpture
The estate of art collector Hardie Beloff has filed a lawsuit against Pace Gallery and its founder, Arne Glimcher, accusing them of improperly interfering with the estate’s consignment to Sotheby’s of a sculpture attributed to Louise Nevelson, by stating that the sculpture would not appear in the artist’s catalogue raisonné.
The suit, lodged in the Eastern District of Pennsylvania in the US, centres on tortious interference with contract. According to the complaint, the sculpture had been consigned to Sotheby’s in good faith, and its attribution had not previously been challenged. The Beloff estate claims that when the work was listed for auction, Glimcher reversed a decades-old appraisal without providing new evidence, with the aim of protecting Pace’s position as the artist’s longtime representative. The estate also claims that Glimcher publicly disputed the work’s authenticity several days before it was due to be auctioned, leading to its withdrawal and causing financial harm to the estate.
The estate is seeking over $1 million in damages for the lost sale and the alleged financial harm caused.
Three Men Convicted in Theft of Maurizio Cattelan’s $6.1 Million Gold Toilet from Blenheim Palace
On 18 March 2025, following a three-week trial, the Oxford Crown Court convicted two men for their roles in the high-profile 2019 theft of artist Maurizio Cattelan’s solid gold toilet sculpture, titled America, from Blenheim Palace in Oxfordshire.
The artwork, made of 18-karat gold and valued at $6.1 million, was stolen in an early morning heist that lasted less than five minutes.
In November 2023, four suspects were arrested in connection with the theft (previously covered by Guest Work Agency in the December 2023 Art Case Update), On 18 March 2025, following a three-week trial, two men were convicted: one for burglary, and another for conspiracy to convert or transfer criminal property.
The artwork was never recovered and some speculate that it has been melted and in smaller amounts of gold.
Investors Sue Nike Over Shutdown of NFT Venture
A group of investors have filed a class-action lawsuit against Nike in the U.S. District Court for the Eastern District of New York, seeking over $5 million in damages following the company’s decision to shut down its NFT venture, RFKT. Nike acquired RTFKT Studios, which creates virtual sneakers and digital collectibles, in 2021 as part of its strategy to expand into the digital asset space. The decision to close RTFKT reflects a broader trend of companies reevaluating their involvement in the metaverse and NFT sectors.
The plaintiffs allege that Nike violated consumer protection laws in New York, California, Florida, and Oregon, and further claim the company improperly marketed and sold NFTs without registering them as securities under U.S. law. According to the complaint, if the digital assets had been correctly classified and disclosed, the investors would not have purchased them.
The complaint taps into an ongoing legal question about whether NFTs should be governed by securities laws. While no U.S. court has definitively ruled on the issue, OpenSea, the largest NFT marketplace, has urged the SEC to exclude NFTs from federal securities laws, arguing they do not meet the legal definition of a security.