Billionaire Need not Pay Artist $450,000

LOS ANGELES (CN) - Billionaire real estate tycoon Igor Olenicoff will not have to pay $450,000 for knocking off an artist's sculptures, despite being found liable for copyright infringement, a federal judge ruled.

A federal jury last year found that Olenicoff and his company, Olen Properties, liable for infringing on artist David Wakefield's stone and metal sculptures. The jury awarded Wakefield $450,000 in damages.

But on Monday, U.S. District Judge Andrew Guilford vacated the damages award after determining that Wakefield could not show that he lost profits because of Olenicoff's infringement.

Wakefield and a friend created a large granite "Untitled" sculpture in 1992, which they gave to the friend's son in Chicago. In 2008, Wakefield saw what he believed to be the sculpture at a property owned by Olen Properties in Newport Beach.

"When Wakefield saw the first piece, it was such a precise copy that he thought it was his original that had been moved from the Chicago area back to Southern California," his attorney Gene Brockland told Courthouse News.

It was only when Wakefield saw six more infringing sculptures at other Olen Properties that he realized his sculpture had been copied, Brockland said.

Three of the sculptures were alleged copies of "Untitled" and three of them were allegedly derivative sculptures based on "Untitled." So Wakefield sued Olenicoff - whose net worth is estimated by Forbes at $3.8 billion - for copyright infringement.

Wakefield provided evidence that he had emailed property developers, including Olen Properties, links to his website in 2004 that included a photograph of "Untitled." He also had evidence that Olen Properties used a different picture from Wakefield's website in a submission to the City of Brea.

Wakefield claimed that Olenicoff used the pictures of "Untitled" to commission copies of the sculpture from an artist in China.

Olenicoff said he paid $14,000 to $30,000 for each sculpture, but denied having seen "Untitled" before litigation. He claimed that he saw the sculpture in a garden in Beijing and then bought four copies from an artist there. He said he also commissioned the other sculptures at issue from the Chinese artist.

A jury returned a special verdict in favor of Wakefield, finding that Olenicoff had copied original elements from Wakefield's work and had profited directly from the infringement. The jury awarded Wakefield $450,000.

Olenicoff filed a motion for judgment as a matter of law, claiming there was insufficient evidence to support the jury's damages award.

Although Wakefield testified that he would have been willing to sell the statute for $160,000 in 2005, and an appraiser valued "Untitled" at $64,000 in 2013, there was no evidence of any actual sale of the work, license fees for the work, or license fees for comparable works, according to Judge Guilford's ruling.

Wakefield was unable to show that he would have made sales of the sculpture but for Olenicoff's infringement, and testified that he never had nor would produce copies of "Untitled," because he creates only original works of art, Guilford wrote.

He rejected Wakefield's argument that a license fee a buyer and seller would have negotiated can be calculated by finding the difference between the fair market value of the sculpture and the cost of building it.

"The market value of a good is determined by the intersection of supply and demand for that good, not by the simple summation of the component costs of the good" Guilford wrote. "Depending on the market for the finished product, a seller may be able to sell a product at a great profit or no profit at all. Knowing the market value of a good and the market value of some of its component costs, without more, does not give the fact finder a sufficient basis to determine the value of some other component."

Wakefield did not present evidence of previous license fees or any expert testimony concerning a reasonable license fee, making him unable to support a showing of actual damages, the judge ruled.

Attorney Brockland told Courthouse News: "While we certainly respect Judge Guilford's analysis, we believe the damage award was supported by the evidence." He said that he and his client are considering their options, which may include an appeal to the 9th Circuit seeking to have the damage award reinstated.

Olen general counsel Julie Ault applauded the court's decision.

"We are very pleased with Judge Guilford's ruling which properly applies the law pertaining to damages to this unusual set of circumstances," Ault said in an email. "It is unfortunate that Olen was sold artwork by a Chinese art broker that infringed upon Mr. Wakefield's newly registered copyright. This ruling is the expected result when the copyright holder chooses to sue the purchaser of the art instead of the art dealers who are profiting from the infringement.

Brockland meanwhile emphasized the court's finding that Wakefield would be irreparably harmed if Olenicoff continued to display the infringing sculptures on his properties, and granted the artist a permanent injunction.

"In many ways, Wakefield has been vindicated," Brockland said. "We are certainly happy that the court found liability and ordered the infringing pieces destroyed. We were also satisfied with the jury's verdict and hope to see it reinstated."

Brockland also represented another artist, John Raimondi, in a lawsuit accusing Olenicoff of commissioning sculptures and backing out of the deal to have knockoffs made in China instead.

In December, a jury handed down a $640,000 verdict in favor of Raimondi, which Olenicoff is seeking to set aside. The parties are waiting on a ruling from Guilford in that case, Brockland said.

The differences in the cases may result in a different ruling from Guilford.

"Factually, the cases are quite different in that Raimondi, unlike Wakefield, sells his sculptures in limited editions and so has a history of similar sales. Raimondi has also occasionally licensed others to fabricate copies of some of his sculptures, which is again different factually from Wakefield," Brockland said.

In 2007, Olenicoff pleaded guilty to stashing more than $350 million in European bank accounts. He paid $52 million in back taxes and was sentenced to two years probation and 120 hours of community service.

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