A Brave New World: Maneuvering the Post-Digital Art Market

Abstract

The digital revolution has launched myriad new technologies in the field of art and cultural heritage law, including digital art, NFTs (non-fungible tokens), artificial intelligence (AI)-generated art, virtual reality and reality augmentation, online viewing rooms and auctions, holograms, immersive experiences, and more. As a $67.8 billion industry, the art market is a global driver of innovation, international collaboration, and national economies, given its cross-border transactions. However, given the extremely rapid development of these new technologies, regulators have struggled to keep pace and implement legal measures that are fit for purpose in this field. Limited oversight has resulted in several claims that have the potential to change the legal landscape. For instance, claims over the theft/misappropriation of NFTs and the related fraud and money laundering that may ensue, as well as a recent class action copyright infringement suit against the creators of a popular AI algorithm and infringement claims over immersive installation and light technologies, demonstrate how new ways of thinking are required to assess cases involving digital property (distinguished from other types of non-tangible property). Moreover, the US Supreme Court has issued a landmark ruling on fair use within the copyright context, which will be relied upon in the future to determine whether (and to what extent) the appropriation of existing copyrighted material is permitted. This includes both the digital use of physical artworks and the use of born-digital works. Although jurisprudential decisions are made on a case-by-case basis, factual patterns involving online media, digital art, and related technologies could serve as guidance for legislators and other decision-makers when considering what limits should be imposed on Web 3.0. This article will focus on recent US-based claims and regulations and dovetail with existing art market regulations in this jurisdiction (e.g., anti-money-laundering statutes) to determine their impact on new technologies, whether directly or indirectly. Finally, the article highlights ongoing trends and preoccupations to provide an overview of the shifting legal landscape.