Copyright, conflicts of interest, and how to deal with Uncle Sam
US museum lawyers met last month to discuss the most pressing issues they are currently facing
Martha Lufkin | 22.5.08 | Issue 191
Over 200 museum employees, lawyers and interested parties convened in
Scottsdale, Arizona, for the 36th annual conference on Legal Issues in
Museum Administration in April.
The
course, which brings legal know-how to museums without lawyers on
staff, is offered by the American Law Institute-American Bar
Association, and is co-sponsored by the Smithsonian Institution with
the cooperation of the American Association of Museums (AAM).
In
an address on the state of museums, AAM president Ford W. Bell told the
group that museums are facing challenges including tight government
budgets, a perception that charities serve the rich and negative press
about perceived abuses at certain museums. The conference discussed new
ways of dealing with intellectual property in the digital age, museum
policies on corporate governance and conflicts of interest under
increasingly probing government scrutiny.
The Second Life syndrome
Sharon
Farb, associate university librarian at UCLA Library in Los Angeles,
said that as museums put more images and content online, more users
will ask to use it; she advises that museums not require licences for
everything. Instead, they should make clear on their websites which
content can be reproduced without permission, and should post all
licence forms for those objects which require them. Virginia Rutledge,
Vice President and General Counsel of the non-profit Creative Commons,
San Francisco (CC), described the CC licence which piggybacks on
existing copyright law to let copyright holders "signal when it is just
fine" for a user to copy, or even alter, a work. The New Museum in New
York, for example, uses CC licences to permit copying. The CC website
posts six different licence forms to choose from, and tells you how to
mark your content so users will know what copyright rules apply
(http://creativecommons.org).
As web users find new
applications for museum images, including those possibly obtained
without permission, how should museums respond? Phoenix lawyer Connie
J. Mabelson described websites which regularly violate copyright laws,
although the usual copyright enforcement steps still apply. At Second
Life or similar sites, virtual art--the hard copies of which may be
owned by real museums--is being bought and sold by paying participants
for virtual money, which can be exchanged for real dollars.
Visitors
create an avatar which can enter a virtual, 3-D rendition of a famous
bedroom scene painted by Van Gogh or buy furniture inspired by Frank
Lloyd Wright's designs. If the original work is protected by copyright,
Ms Mabelson asks, should a museum take steps to enforce it, or do the
virtual reworkings fall within a "fair use" exception to copyright
infringement? (Perhaps the issue will be debated at Second Life's
virtual bar association, which does exist.) Ms Mabelson advises that a
museum's fair use policy should address what the museum should do if a
museum image appears on a wiki, an online site where any user can add
content.
The museum comes first
Recent scandals
over alleged misconduct by top US museum officials have caused museums
to review their conflicts of interest policies regulating board members
and employees. Conflicts arise when a trustee's duty of loyalty to the
museum is compromised, says Lori Fox, acting vice president, general
counsel and secretary at the J. Paul Getty Trust; she advises that
museums have a well-written conflicts of interest policy that defines
the trustees' duties, prohibits potential conflicts, and provides a way
to resolve them.
For example, conflicts can arise if a trustee
collects art that the museum might collect; trustees should be
forbidden to buy deaccessioned art, or to use inside information for
their own benefit, such as to buy an artist's work before the museum
announces its purchase of art by the same artist, which could drive up
prices. Museums should also require annual disclosure forms from
trustees and some employees to identify possible conflicts, including
asking about the trustee's art acquisitions and whether the trustee has
received gifts from museum staff or anyone the museum does business
with. For example, trustees may seek favours from museum staff, such as
asking a conservator to restore a privately owned manuscript, which
would take the conservator away from his duties. While this may be a
way to cultivate donors, the Smithsonian Institution prohibits using
staff time and services for private uses.
When a conflict with
a board member arises, the trustee's interest in a possible transaction
should be disclosed and the trustee must be excluded from the decision,
which the board's audit committee or even the state attorney general
can be asked to review. The board must still ask whether the proposed
transaction is in the museum's best interests, which it might be, says
Frederic Goldstein, general counsel to the Los Angeles County Museum of
Art. Each situation should be reviewed on its facts: while an
exhibition of a trustee's collection of local maps by a small museum
may increase the collection's value, the benefits to the museum and its
community may be so great that the display is still in the
institution's best interests.
Government scrutiny
Congress
is seeking to stop perceived abuses in the non-profit world, and is
using the tax law to do so. The new revision to the annual tax return
for non-profit organisations, Form 990, seeks significantly more
information about how museums are run. Organisations will first file
the return for tax years beginning this year. The form "shows the
government's increased role in governance and conflicts of interest",
says Marsha Shaines, deputy general counsel to the Smithsonian
Institution. The information that charities provide on the forms will
be publicly available. The museum must summarise its missions and
activities, changes in its programmes and its achievements of its
exempt purpose.
New questions about governance and management
mean that the museum should have policies in place before the form is
filed, Ms Shaines advises. For example, the form asks whether the board
and committees contemporaneously documented their meetings during the
year, whether the organisation has a written conflicts of interest
policy, and whether officers, trustees and key employees are required
to disclose annually any interests that could give rise to a conflict.
The form asks whether the charity enforces its conflicts policy, and
whether it has whistleblower protection and document retention and
destruction policies. Museums must further disclose whether they
determined director compensation using an independent review and
comparability data, and contemporaneously substantiated their
decision-making process. The form also requests the dollar details on
first class travel, travel for companions, and housing allowances for
directors and trustees.
While it is not clear whether the
Internal Revenue Service will be able to process all this information,
the public and press will now be able to review it.
Don't get political
US
charities are prohibited from participating in political campaigns, and
cannot attempt to influence legislation. The rules are complex, and
stiff penalties can apply. For example, museums cannot tell people to
urge their congressmen to vote in favour of art funding.
A
conference participant asked anonymously if a museum can host an
exhibition on the anti-war movement within the Democratic Party? Under
the law, a "facts and circumstances" test applies. The test is used to
determine whether a non-profit is participating in a political
campaign, and one factor could be how close in time the activity is to
the campaign. The anti-war exhibition could raise an issue if it
includes present-day events and differentiates between political
parties. Both political parties should be covered, or the subject
should be restricted to the past, says Marcus Owens, a lawyer at Caplin
& Drysdale in Washington, DC. "If you think a political statement
is going to pop out of a visiting artist's mouth at a lecture, you
might want to start the programme with a disclaimer."
The
2008 course book "Legal Issues in Museum Administration," containing
licence forms, conflicts of interest policies, employee standards of
conduct and other materials, can be obtained from ALI-ABA at
www.ali-aba.org or tel: +1 800 253-6397
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