Guest Blog Post: Copyright Law and Your Property

This past weekend, my mother, sister and I held a yard sale to dispose of our unwanted personal property. We offered clothing that did not fit properly, household items that no longer met our decorating taste, and appliances and electronics that had become obsolete and were since replaced with newer models. I was absolutely overjoyed that there are people in our locale that would exchange money, albeit a modest amount, for our surplus possessions with minimal effort on our part. Each of us dedicated our proceeds from the yard sale toward something we felt would benefit us more than holding onto the property. My newly found money is going in the piggy bank to save for repairing my iPad, which I managed to shatter in the driveway during our yard sale, but I digress. Our ability to resell our possessions may be in jeopardy due to an upcoming Supreme Court case.

On October 29, 2012, the United States Supreme Court will hear oral argument for the case of Kirtsaeng v. John Wiley & Sons, Inc. The Court will settle a three-way split among the Circuit Courts of Appeals and address the question of whether it is legal for copyrighted goods, which are made outside of the United States and purchased lawfully (whether abroad or domestically), to be sold within the United States without getting permission from the holder of the copyright (Read the Questions Presented here).

According to the first sale doctrine, an owner may resell copyrighted property without having to seek permission if it was first purchased in the United States from the holder of the copyright. As stated in 17 U.S.C. § 109(a), “Notwithstanding the provisions of section 106(3), the owner of a particular copy or  phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” Circuit Courts of Appeals have interpreted this provision as applied to goods manufactured abroad in three different ways.

Recently, the Second Circuit held that a foreign made product may never be resold in the United States without the copyright owner's permission. The Supreme Court has accepted review of the Second Circuit's opinion, and will resolve the three-way Circuit Split when it publishes its opinion in Kirtsaeng v. John Wiley & Sons, Inc. If the Supreme Court upholds the decision of the Second Circuit, people across the country may no longer be able to sell foreign made copyrighted goods they legally purchased without the permission of the copyright holder.

What might this mean for personal property appraisers? A significant percentage of appraisal business comes from clients wanting their goods appraised to know the proper asking price at which to sell their property and assistance disposing their items. If the Second Circuit’s ruling is upheld making it more difficult to resell property, appraisers stand to lose a large portion of their business. In addition, if property manufactured outside of the United States can no longer be resold without permission from the copyright holder, how might it affect the value of the items? Will appraisers be spending most of their time researching copyrights instead of searching the market for comparable sales? Could this mean an end to the weekend yard sale to pick up a little extra cash? Does this mean my iPad will never get fixed? If Apple holds a copyright on the iPad, I may never be able to resell it because it was made in China.

Kelly McNeil, ISA

Congratulations to Our Course Attendees

ISA has concluded onsite courses for 2012.  The final onsite offerings of the 15 Hour Personal Property USPAP, Advanced Report Writing and Requalification courses were held in Naperville, IL and offerings of the 7 Hour Personal Property USPAP and Oriental Rugs courses were held in Dallas, TX. More than 120 individuals attended these five course offerings.

Please join ISA in congratulating our recent course attendees:

Congratulations on taking important steps to further your appraisal industry knowledge, by taking courses through ISA!

Check back next month, for the 2013 course calendar!

What Qualifies An Appraiser as An Expert or Specialist?

The terms “expert” and “specialist” are often used by appraisers in promoting their appraisal practices.   What do these terms mean within the industry and to the general public?  

Under the USPAP competency rule, a personal property appraiser may appraise a wide variety of objects within their field,  and the increasing market for appraisal services has prompted many members to advertise their practices.  Therefore, ISA provides some voluntary terminology to create proactive advertisements for members on the ISA website, individual member websites, and in other print and online sources.

1. A generalist is an appraiser who appraises a broad range of properties.  Generalists are critical to the appraisal profession, often appraising large estates and other complex assignments that encompass many areas of knowledge.  When necessary, a competent generalist consults with and acknowledges specialists and experts in creating a thorough appraisal report.

2. A specialist is an appraiser who primarily concentrates on a specific property and regularly performs appraisals of that property type.  A specialist often has additional education in a limited and dedicated field.  A specialist usually has more knowledge and experience than a generalist in a particular property type, but is not as knowledgeable as an expert in the field.

3. An expert is an appraiser with comprehensive and authoritative knowledge of or skill in a highly concentrated field as a result of extensive education and experience.  Expertise is normally gained after many years of formal education, self-study, market experience, scholarly research, presentation and publication, or a combination thereof.  Only an appraiser working at the highest levels within a field should be considered an expert.

These suggested terms are not mutually exclusive and an appraiser may be any combination of a generalist, a specialist, and an expert.  For example, an appraiser can be a fine arts generalist, a specialist in American Abstract Expressionism, and an expert on Mark Rothko.  Or, an appraiser can be a generalist in Antiques and Residential Contents (ARC), a specialist in furniture, and an expert in Duncan Phyfe.

Carefully and accurately representing your appraisal service is required by USPAP and ISA’s Code of Ethics, and vital to both building public trust in the appraisal profession and effectively promoting your business.

A special thanks to the Taskforce on Expertise and Specialization members Kirsten Smolensky, ISA AM and Scott Hale, ISA AM. As well as Board members Selma Paul, ISA CAPP and Christine Guernsey, ISA CAPP for their help in formulating the statement.

Cindy Charleston-Rosenberg, ISA CAPP

Vice President, ISA

__________________________

 An appraiser must: (1) be competent to perform the assignment; (2) acquire the necessary competency to perform the assignment; or (3) decline or withdraw from the assignment.  Competency Rule, USPAP 2012-2013 Ed., pg. U-11.  More detail concerning the Competency Rule is available in USPAP.

Registration Referral Contest Winner

During the registration period for ISA’s fall courses, a Referral Contest took place.  Each time anyone registered for an ISA course, there was an opportunity to include a member name in the “Referred by” field.  All members of ISA were eligible to participate. The contest ended on November 1st and we are pleased to announce the results.

Congratulations to Dennis Adomaitis, ISA! You have won a free registration to Assets 2013, taking place April 12-15 in Chicago, IL at the JW Marriott.

Learning Never Ends

Upon finishing the task of editing an appraisal, I glanced up the corner of my desk to spy a photograph of my six year old grandson in his kindergarten graduation cap and gown. For the umpteenth time I thought about how “stinkin cute” he is. Then I began to ponder the concept of education. Education starts so early in our lives and should (in my mind) never end.

I have had years of undergraduate and graduate art history study. I have worked in museums and galleries for over 25 years. I am a docent at a museum which houses works in my specialty area. Despite the education and the experience, every time I walk into a new client’s space to inspect unseen works, I still feel a sense of anxiety. For me every inspection and every appraisal proves the old adage of “the more you learn, the more you realize what you don’t know”.

This is one of the reasons I enjoy appraising so much. No matter how many artists and art historical movements I know, there seems to be a constant supply of new ones to learn and add to the list. Today there is so much information and new studies about the “important artists” particularly with branded works, but much less information or studies on artists or works in the middle market and below.

People tend to buy “what speaks to them” whether it’s a known, important, or even a good work - unless they are “trophy purchasing”.  When someone finds out that you are an appraiser, in their passion for their own collection (small or large), they will ask “have you heard of…”?.  It doesn’t always help to explain that there have been thousands of years and many countries and states with artists both professional and amateurs and no one can know them all.

My point in all the above rambling is this. When one decides to appraise (particularly fine art), they should appraise items for which they have specialty knowledge in.  By specialty knowledge, I mean an area that one has had a thorough education in and with working experience. One should never assume that they know it all or that all they have to do is look up a few comparables that look similar. One who puts themselves out there as a specialist should have a level of connoisseurship to understand which comparables are truly comparable and don’t just look alike (because sometimes there is a world of difference in value between things that appear to be the same on the surface).
There are many times when an appraisal assignment includes items that aren’t in the appraiser’s specialty area. I remember having items like antique clocks and wine in a few of my assignments. I may be able to tell time and enjoy drinking wine but I am not a specialist in those areas.

However, I do know specialists and am not afraid to enlist their help and give credit where credit is due. What results is an accurate appraisal which makes the client happy and keeps this appraiser out of trouble. I have also learned something new to tuck away for future use. Does it make me a specialist in clocks or wine in the near future? No way and I wouldn’t want to have to appear in court and answer questions about clocks or wine, but I do know a little more.

Being competent in methodology and report writing allows an appraiser to branch out with the aid of colleagues who are specialists in areas that we are not. However, in ones area of specialty there is probably so much more one can know to truly stand out as an excellent appraiser.  Lectures, webinars, google alerts, involvement with museums, historical sites, dealers and auction houses, specialty magazines and self-study are all ways to become better at what you do.

Will following my own advice give me less anxiety as I enter an inspection? Probably not; but I will probably have more confidence and enjoyment going forward in the process through completion of said appraisal.

Christine Guernsey, ISA CAPP
Chair, Fine Arts Committee