Buy Low, Sell High

Paisley Wildman, a student in Jon Pfeiffer's Fall 2014 Media Law class at Pepperdine University, wrote the following essay in response to the prompt: "Nash is a struggling painter who lives in Chicago. He cleans swimming pools during the day, and paints at night. Nash has a few paintings for sale in galleries around town, but his paintings rarely sell. A few months ago, Donald, a well-known art dealer, offered to buy one of Nash's paintings called "Desert Sun.' Nash refused at first but since pool cleaning was slow, Nash agreed to sell the painting to Donald for $100. Later, Nash discovered that Donald re-sold it to the National Gallery of Art in Washington D.C. for $5 million. Is Nash entitled to any of the $5 million? Who does and should own the copyright now?"

Donald clearly knew what he was doing when he bought Nash's painting for $100. Where Nash was struggling to establish a name for himself in the art world, Donald saw the potential for a highly profitable art deal. What began as a hundred-dollar value turned into a five million dollar market price - every cent of which went into Donald's fancy art-dealer pocket. When Nash learned of this incredible markup on his "Desert Sun," he knew he had been scammed. The National Art Gallery in Washington D.C. had bought his painting for an amount of money far beyond what he knew it to be worth, and he would never get the chance to see any of it.

Ultimately, there is not much Nash can do in this situation. He is not entitled to any bit of the $5 million earned by his painting. At the start of things, he did own "Desert Sun" exclusively. By producing an original piece of creative work, Nash was inherently granted the copyright laws to reproduce it and/or distribute it by sale, transfer of owner, lease, or lending. This distribution right was put into use when he sold the painting to Donald for $100. At this step in the scenario, the copyright laws shifted. By selling the piece of artwork, Nash was gibing up his exclusive rights of ownership.

Donald was free to do with it as he pleased. He could have destroyed it, given it away, or sold it (as long as he refrained from making illegal copies of it at anytime in-between). Of course, he did what any successful art-dealer would do: he sold it for five million dollars. This lawful action is covered under the first-sale doctrine. Donald wins. Nash loses.