The Art-Tech Revolution

Seven expert opinions on how mediation and legal-tech are revolutionizing art provenance

The right to resale royalties, or droit de suite, is the right of artists to receive a royalty payment each time their work is resold at an appreciated value. This viewpoint has historically been aimed at the likes of recording artists and filmmakers. However, most of the world’s visual artists rarely have an ongoing source of income from their work. The majority of visual artists have little in the way of protection via contractual agreements and/or strict intellectual property, or IP laws with which to earn royalties for their work.

Recent statistics published by the Milan Chamber of Arbitration in Italy (CAM), advised that only 10% of art mediations of 2018 were deposited because of a contractual ADR-clause included in the agreement between the parties.

Between 2015 and 2018, ADR Arte handled over 60 art mediation cases involving a broad spectrum of issues, with a high rate of effectiveness. Whenever the parties chose to continue with the mediation process after the first session, over three-quarters then went on to reach a final agreement even though artists had no contracts. ADR Arte reported that 70% of the art disputes did not involve contracts. Over 1/3 of the art pieces in dispute had values between 150,000 and 1,000,000 Euros.

For any dispute to be satisfactorily resolved, the matter of provenance must first be proven. The term “art provenance,” from the French word, provenir, meaning “to come from.” Provenance is the documentation that authenticates an art piece, sometimes claiming the work is created by someone else or is from a different era.
For any form of technology to be useful to the artists, gallerists and owners must be available, security, be transportable, and accessible. Traditional methods such as Authenticity Certificates can easily be faked and, as such, are unreliable.

So, it is with this concept of smart contracts on a computer protocol intended to digitally facilitate, verify, enforce negotiation, which makes performance of contract appealing. Smart contracts allow credible transactions without third parties. They use blockchain, which is a decentralized system that exists only between all permitted parties— as such, there is no need to pay intermediaries that is secure; as it saves time and money. While blockchains have their issues; they are rated faster, cheaper and more secure than traditional system.

The Legal Experts Analysis on Provenance and Royalties

Jeffrey Aresty – Texas, USA

Jeffrey is the founder of the Internet Bar Organization and is a lawyer from Houston, Texas who specializes in law-tech and smart legal contracts. He partners with companies that use blockchain technology to protect musicians and artists’ intellectual property rights. An example of this partnering effort is to bring the USbased Trokt platform, which certifies the “digital thumbprint” as a piece of artwork, and saves it on the Trokt blockchain, with the CanadianVietnamese start-up joint ventures Royalty Guaranteed Art and Find My Art Online in Vietnam.

Federico Vasoli – Milan, Italy

Federico is an Italian lawyer from Milan, the international art capital. He specializes in blockchain technology with offices in Italy, Vietnam, Singapore and Malta (a country commonly referred to as “Blockchain Island”). The laws and legal implications vary between countries, hence the initial digitization, privacy policy, guarantees to buyers, and volatility of digital tokens to evaluate the work of art. Malta and Singapore have developed distinctive expertise in blockchains and digital tokens. Blockchains and all that they entail offer potentially tremendous utility to verify identity and ownership to the art industry.

Thomas Giglione – Mediator- Arbitrator, Toronto, Canada

Thomas has recently focused on art provenance, and will be relaunching his website www.mediation.vn to include a directory of international mediators, arbitrators, art appraisers and experts in art provenance. He believes that resolving art disputes through the mediation process thus by offering the artists a win-win outcome rather than litigating through the courts. The directory will include a list of mediation and arbitration centers such as the Milan Chamber of Arbitration in Italy (CAM) that specializes in art dispute resolution.
He explains: “We are presently bootstrapping Royalty Guaranteed Art along with the associated paired mobile app, Find My Art Online. The start-up is in the seed stage of the investment round and we are now considering offering convertible notes and series A financing to angel investors. The smartphone app simply reads a NFC label that is affixed on the back of the canvas of a painting, photo or the bottom of a sculpture or any art collectible along with the integration of smart legal contracts, IoT technology and NFC readers for Android and Apple smartphones.”

Thomas G. Giglione is a Canadian court-appointed commercial mediator for the Ministry of the Attorney General in Ontario, Canada, he currently lives in Hanoi, Vietnam. He is a court accredited mediator under the Ministry of Justice of Vietnam, and the Vice Director and mediation trainer (VEMC) Mediation Center www.vietnamadr.com He is also a member of the Internet Bar Association IBO.org, World Mediation Organization WMO.org and member of the European and Italian Chambers of Commerce under the auspices of ANT Lawyers specializing in resolving cross border, workplace, and disputes involving art provenance.

The Artists, Photographers and Galleries

Francesco Gibbi – Founder @ LOTART.com | The Art Investment Platform | Alternative Assets Management

Francesco is from Italy; he launched his company “Lot-Art” in 2017. Lot-Art is the leading search engine for fine art and luxury collectibles—it is an investment platform for serious investors. “Legal smart contracts and blockchain, through online platforms, will help art investors track art ownership and will be able to track the increased prices of art. Investors will know that that they are not buying fakes, so that investors will feel secure with their art investment,” says Francesco.

(Above and below are some examples of Lot-Art painting that he offers to investors)

Ronald Paderes, Artist – Caracas, Venezuela

Ronald is a Venezuelan artist, working for over 20 years in graphic design and visual communication, now residing in China where there has been dramatic growth in demand for art as an investment because of the declining Chinese currency. Art Basel and UBS Global Art Market Report finds that China accounted for 21% of USD63 billion global art sales last year in a market dominated by the world’s superwealthy.
“My work as an artist consists of compositions made from continuous lines and basic colors. As a graphic designer, I wanted to continue producing work with a very strong graphic feel. The major issue in the art market is outrageous speculation when talking about price and value. Electronic provenance tracking will make art pieces more accessible and resourceful. There will be a complete database of each artwork including legal ownership, price and trade information.

Barry Penter, Artist – Australia

Barry’s work focused on realistic drawings. Having found his talent after a detailed and real working life with special attraction. Currently, he enjoys the exuberance of the city of Hanoi. He has been invited to exhibitions, and has provided workshops in realism and discussion groups on art.

“Artists are more interested in earning income from ongoing royalties. This will be equally important to galleries and art dealers, but for the artists to come on board they have to see an advantage,” he says. “Remember, the ability to have an ongoing income is a new paradigm and is the ideal quest for an artist wanting to retire with no pension or retirement income.

John Crain, Artist – US

John’s interest is in digital art and crypto collectibles. He has formed SuperRare. co, an online platform and marketplace for one-of-a-kind unique digital art.
He is partnering with Asian start-ups working in the area of art provenance that allows artists and galleries to cryptographically sign certificates of authenticity on blockchain using smart legal contracts, thus allowing collectors to buy and sell art from a global community of artists. These certificates prevent forgery, track provenance, guarantee ownership and authenticity—creating a global economy built around creativity and art. This new technology allows investors to invest in incremental art by not having to buy the entire art piece but rather purchase a percentage of the art and thus leverage revenue with a smaller initial investment.

Tran Chinh Nghia – Photographer; Hanoi, Vietnam

Tran Chinh Nghia was recently interviewed in his home in Hoan Kiem District in Hanoi by Thomas Giglione. (An excerpt from the interview, a full transcript is available upon request.)

Thomas: Please tell me the interesting story behind the beautiful photos that you displayed here about Lunar New Year, which portrays the late artist Bui Xuan Phai?

Nghia: Mr. Bui Xuan Phai and my father were friends. He had over 12 paintings symbolizing the lunar holidays as a symbol of their 12-year friendship.

Thomas: Can you tell us a little about the photo that you took of Bui Xuan Phai_Bai Phong Van? And the story behind this, how it was chosen as the approved image for next year’s national postage stamp?

Nghia: In 2019, to celebrate the anniversary of his 100th birthday, the Ministry of Information and Communications used this photo that I took as a symbol on the stamp. This picture shows that he is standing in front of his painting in the Old Quarter of Hanoi.

Thomas: What happened to all Bui Xuan Phai’s paintings? Who owns them now?

Nghia: I am now keeping some copies of his drawings—for other paintings, I don’t know where they are because whenever he finished drawing he sold them right after that to earn a living. There are a lot of fake works of his art, it is a tragedy that we don’t know what is fake or not.

I really hope that the technology you speak of will come soon to Vietnam to help Vietnamese artists and their families for future generations.

Bui Xuan Phai with Photographer Tran Van Luu