[MSN] Artist Cao Yong settles dispute with Costco

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Artist Cao Yong settles dispute with Costco
Mike Boehm
(c) 2007, Los Angeles Times
Oct. 28, 2007 08:55 AM 

If you happen to have dropped a grand or two at Costco on a signed,
limited-edition art print by Cao Yong, a Chinese immigrant painter of
popular romantic cityscapes, he wants to grab it and burn it.

Costco reached a settlement this week with Yong in an art-counterfeiting
lawsuit he had brought in U.S. District Court in Los Angeles. He claimed
that the mammoth, members-only merchandising chain had sold phony prints of
his paintings in Southern California and provided buyers with faked
certificates deeming them "signed and numbered by the artist."

Costco landed in a separate, highly publicized art controversy last year
when Pablo Picasso's daughter asserted that two purported Picasso drawings
sold on Costco's Web site were not authentic and that accompanying
certificates supposedly bearing her signature were frauds. 

Yong's attorney, Eric Goodman, said that the artist was "happy with the
resolution" but that the parties had agreed to keep the terms of the
settlement private. The other defendants were a Los Angeles company, Day-O
Graphics Inc., which Yong suspected had provided the prints to Costco, and
Dan Luo, identified in the lawsuit as a former employee of Yong.

The case's conclusion doesn't end Yong's concerns, Goodman noted, because
having bogus prints floating around "potentially impacts the value of
legitimate (ones) in circulation."

The attorney said that federal law gives Yong the right to seize any fakes
of his work and that the artist would like Costco customers who bought the
prints to turn them in for "a counterfeit-burning party."

"We would expect Costco to reimburse buyers," Goodman added, although such
an outcome was not part of the settlement. Sales records produced as
potential evidence were murky, he said, and "there might be anywhere from at
least seven to 15 out there."

Barry Kellman, attorney for Costco and Day-O Graphics, had no comment about
the settlement. Asked whether Costco would provide refunds for the disputed
prints, he said by e-mail that, "Unrelated to this lawsuit, you should know
that Costco guarantees ... 100 percent satisfaction (for all merchandise)."

Frank Zhang, a San Francisco physician who paid Costco $37,000 for what he
believed was a Picasso crayon sketch of a face, said Oct. 25 that the
company recently had offered him a full refund and a $500 gift certificate.
Zhang said he was considering whether to take the money or press Costco to
obtain an expert opinion on the drawing's authenticity.

"It's painful," he said. "You bought the one you love, thinking it's a
Picasso original, and it seems it's not. I don't know what to do now."

According to Yong's attorney, the artist began to suspect a problem more
than a year ago when he learned that his work was being sold in Costco
stores in California. He has sales agreements with more than 300 galleries
nationwide, said Ming Chuong, sales manager for Cao Yong Editions, but not
with Costco.

Yong and his sister subsequently purchased prints of three of his works at
Costco stores in City of Industry and Laguna Niguel, priced from $1,000 to
$2,165. Goodman said substandard frames, canvases and reproduction gave them
away as forgeries. He said Costco sold the prints at art "road shows" that
would move from store to store.

Yong, 44, first drew Western attention in 1989, when authorities raided a
show of his paintings in Beijing. The works, inspired by Tibetan Buddhism,
incorporated nude figures. Since he settled in L.A. in 1997, his work has
been more commercial.

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