August Sander

You wait months for an NFT case, and then two drop in the matter of days. First an English court confirmed that tokens are property (more on that when I get my hands on the decision), and now there is a fascinating copyright case taking place in Germany that could shape a lot of our understanding of the interaction between NFTs and copyright.

The case involves thousands of photographs by renowned German artist August Sander, who is famous for his portrait photographs, particularly his seminal series entitled People of the 20th Century. Sander died in 1964, leaving behind a body of work comprising thousands of amazing photographs. The copyright of the photographs passed to his son Gerd Sander, who had the rights until 1992, when he sold the existing negative archive to the Cologne-based art foundation SK Stiftunk Kultur, which owns the works until they will go into the public domain in 2034. The purchase included 5,000 originals, over 10,000 negatives, as well as photographic equipment and other furnishings of historical relevance.

While it seems clear that SSK owns the copyright, Gerd’s son Julian Sander has been attempting for years to profit from his grandfather’s work. Julian has an art gallery in Cologne which often displays works from August Sander. In 2017, Julian and another gallery called Hauser & Wirth made a press release which stated that the August Sander collection would be moving to a new location thanks to an agreement with Julian. This came as a surprise, as SSK still has ownership over the archive, and they made a strongly-worded press release of their own which stated categorically:

The foundation also acquired all the existing rights of use of August Sander’s work, which are exclusively held by the Photographic Collection/SK Stiftung Kultur of the Sparkasse KölnBonn and are unlimited in terms of location, content and time. The SK Stiftung Kultur and its photographic collection is therefore the only legitimate representation of this estate by August Sander.”

Julian Sander replied only that the family still owned the rights to the archive, but apparently did not pursue the matter further, there were some articles detailing the controversy at the time, but no resolution, although some works by August Sander were available at Hauser & Wirth’s New York gallery. Interestingly, the Wikipedia page for August Sander contained only Julian’s version of events, something which I have now remedied, but I digress.

Fast forward a few years, and the controversy over the archive’s ownership has taken an interesting twist. In February 2022, Julian Sander released an NFT collection called “The August Sander 10K Collection“. The project as introduced was quite interesting in its own right, the stated idea was to enhance the visibility of August Sander’s work through NFTs, with each token claiming that it was both “a unique 1/1 and a source of provenance to all known physical manifestations of the photograph.” The Collection claimed:

Each NFT in this collection represents more than simple ownership of an image. They provide the keys to a century’s worth of knowledge carefully preserved and maintained by the photographer’s family. These are not just photographs, but codexes of information that include annotations and metadata, an accumulated knowledge that infers that pictures are not simply things to look at, but things to know. Over time, additional attributes will be included in the metadata of this collection. These NFTs will function as a living and active archive preserved for continued scholarship, appreciation, and windows into the eyes of a man who sought to preserve the truth about the world he knew.”

An innovative aspect of the collection was that in principle it would allow for the NFTs to be minted for free, and the buyer would only pay the minting cost, and Julian Sander would receive a 10% for each resale. The collection was well received in some circles, and it managed to make 400 ETH in sales in a few weeks.

Needless to say, SK Stiftung Kultur did not take kindly to this development, and they quickly moved to have the collection de-listed from OpenSea via a copyright claim, and the marketplace complied, the collection is still there, but with the images removed, and they’re no longer for sale. The NFTs themselves are still online however, and still available in some other platforms such as LooksRare.

So what will happen now? According to several sources, SSK will sue for copyright infringement next, probably given Julian Sander’s history of claiming ownership, this won’t stop until a court has decided on the ownership claims. I haven’t been able to find a court filing anywhere, so I’ll be more than happy to hear from anyone who has seen or is aware of any legal claims.

If SSK sues, this has the potential to be one of the most fascinating test cases for copyright infringement and NFTs. So what is likely to happen?

I am going to assume right away that SK Stiftung Kultur owns the copyright on the archive. They have physical control of most of the negatives and originals, and there’s no contention that they have been in control of the archive since 1992, even running an annual photography competition in his name. On the contrary, I have looked at various interviews by Julian Sander, and he has yet to present public evidence that he has any rights to any of the works. Some of his statements have been vague, and at times seem to display a sketchy understanding of copyright. For example, in 2017 he objected to SSK’s claim by saying that “the SK Foundation does not act as a non-profit organization“, which has no bearing whatsoever on the ownership of the works. In the most recent interview, he goes on to say: “As a gallerist, I work inside of the realm of fair use […] As a businessman who sells pictures, I’m legally allowed to sell pictures, and to make money doing it, via fair use. There’s a clear framework there.”

The problem for Julian Sander is that he’s based in Germany, and SSK is based also in Germany, and there is no such thing as fair use outside of the US. He goes on to say:

““One of the things SK and their attorneys misunderstand is they look at OpenSea as if it were Google Images […] OpenSea is a marketplace; everything is for sale. That’s why I could do this project. Because putting something on OpenSea means it’s for sale. And if it’s sellable, I’m allowed to show it. That’s why I didn’t even consider asking SK for approval.”

I wish Julian Sander had consulted an attorney himself, as the above is extremely incriminating. That’s not how copyright works. That’s not how any of it works. You can infringe copyright by both showing something, and by selling it. Edit: One could have a more forgiving interpretation of the above, JS could have meant that if he’s going to sell a painting, he can make a copy to put on the listing, but this equates the NFT with the physical copy, which is not what’s happening here.

The article detailing the case seems to operate on the assumption that this is a US legal dispute, when it is clear that SSK should be suing in Germany, if they haven’t done so already. The article contains this eye-watering quote:

“This means Sander was able to create the 10K Collection on OpenSea without involving SK Stiftung Kultur because of “fair use”, a technical term used in copy-right law under the Digital Millennium Copyright Act.”

I can’t even… Magical Internet Law Strikes Again.

But leaving all of the above aside, the main legal question may come down to one of basic copyright infringement. Can one infringe copyright when minting an NFT? As this likely to be a German, I cannot comment on the specifics of German law, but we can analyse it using general principles common in EU copyright case law.

We have to revert here to what exactly is an NFT, and how it’s minted. Strictly speaking, anyone can mint an NFT, and you don’t even need the actual image to mint a token, you could only be linking to a work hosted by someone else. However, we’re lucky that in this instance there has been some copying taking place. The NFT is not the image itself, but it is some metadata that links to a copy of the work, in this case the makers of the 10k collection did make copies of several August Sander images, and uploaded them to a distributed file storage system called IPFS. How do I know this? Because the links are public. Take the picture #3155 in the collection (still on sale at LooksRare for 2.3 ETH at the time of writing):

There is undoubtedly a small clip of the image in that page, but that is not the NFT, the NFT is the combination of the contract address (0x7037843d739D846CdCe3A6839A80f7D70b60b99A), and the TokenID (303). With that information I can go to the contract and find where the actual token metadata is located, in this instance it is here. That is the actual NFT, which contains the link to the full copy of the photograph (you need the Brave browser to go there). I won’t reproduce the full picture, but you get the idea.

So assuming SSK owns the copyright, it’s easy to see that many copies have been made at different stages, and even though these copies are not the actual NFT for sale, the NFT gives access to an (allegedly) unauthorised copy of the work. So is this infringement?

I think that in this case the answer is yes. Assuming that the copy of the photograph is infringing, linking to the image using the token could be considered to be a communication to the public, which is an exclusive right of the copyright owner. There is a very lengthy case law on when exactly a link can infringe copyright, but if the photograph has not been made available to the public yet by SSK, or if it is being communicated to a new public, then it could be infringing.

Concluding

I hate to admit that I really hope that this case makes it to court, as we need to test a lot of assumptions about NFTs and copyright. I have no idea how this would be decided, but it seem evident to me that there has been at least some unauthorised copying taking place. While some tokens have been de-listed from OpenSea, some are available in other platforms.

In my opinion Julian Sander is in trouble, but then again there may be details about the sale to SSK that we do not know anything about. One thing is clear, he does not come across well in the interviews, saying that “No, I’m not trying to get rich… I am rich.” In another interesting part of the interview, he says:

“None of this exists for free. I don’t buy the argument that culture should be free.”

Famous last words perhaps?

Categories: ArtNFTs

7 Comments

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Michael Jacobs · May 20, 2022 at 11:09 pm

I am very pleased to read someone’s views on this from a rational, considered legal perspective. I hold a number of these (5) and am also an English lawyer, so I have a real interest in how this matter plays out. That being said, I am not so bothered about the outcome from a self-interested/monetary perspective, as the few NFTs I own have been bought in the expectation that the value risks be written down to zero sooner or later. But I do expect that the creator of the NFTs has the legal right to make the creation in the first place and allow it to be traded on the secondary market without violating any laws.

I am very bothered by how – as your article also notes – Julian seems to be entirely detached from how German IP/copyright law actually works. Everything he has said in interviews has left me with the distinct impression that either (i) he misunderstands the legal position, having failed to obtain accurate/correct legal advice on the matter before issuing the NFT and even since the proceedings were issued or (ii) has a reckless disregard for any correct legal advice that has been given to him on this. His responses don’t really stand up to scrutiny – he appears to have a sense of self-entitlement to deal with the images in this way (i.e. creating NFTs, listing them on a marketplace and taking a commission from each secondary sale) simply because he is a gallerist and deals with images for a living. I appreciate that the underlying physical contact sheets are in his/his family’s possession and there may be some nuanced issues as to whether they are covered by the same IP that SSK owns. I am open to the possibility that he and his legal team can pull something ingenious out the bag in these proceedings to present the matter in a different light, but I don’t know enough about the underlying facts or German law to know how likely that is.

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Andy J · May 22, 2022 at 2:39 pm

Hi Andres,

Thanks for your interesting article. Like you, I would like to see how this dispute might be decided by the German courts. Clearly Julian Sander has a poor grasp of copyright law, but it is possible that he is correct about one thing: that the family still own the rights to the archive. My detailed knowledge of German copyright law is probably similar to yours, but Article 29 of the UrHG makes it clear that copyright cannot be transferred, other than by testamentary disposition, and this provision applies also to any heirs (Article 30). So it may be that while SSK ownership of the physical negatives is supported by an exclusive licence issued by Gerd Sander, there may be a further question about whether this licence would prevent Julian from exercising a right to exploitation of the archive under the ‘unknown types of use’ scenario discussed in Article 31a, that is assuming that Julian is authorised to act on behalf of the August Sander estate.

And without wanting to nitpick too much, Sanders’ works will not, of course, enter the public domain until 2035.

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Omnimodo Facturus · May 26, 2022 at 10:51 am

Thank you for the great post!

I stumbled upon your work while writing a paper about NFTs for my university. My guess is that JS is referring to § 58 UrhG in his interview, which is an exemption clause (Schranke) as is it allows limited commercial use during sales support measures.

The main question will be whether SSK got the usage right as the copyright itself is not transferable in German law and if so, how far reaching are those rights, as § 44 I UrhG tells as they are separate from the physical object. Then § 31a UrhG steps into play, which is very interesting indeed.

    Avatar

    Andres Guadamuz · May 26, 2022 at 11:41 am

    Thanks!

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