I have seen a few art contests where the organizers take a Copy/Transfer texture of an artist's work and do with it as they please. Some artists don't think twice about it. Most of the time, artists assume that the texture would only be used for the competition and nothing else.
But contest organizers usually have sales in mind. They want to sell the pictures and make a commission out of it. And that's fine. In fact, the artist might even be happy about it.
Now, even in that situation, the problem comes in attribution of the work if the contest organizer applies that texture on a prim. What happens is that the prim would show the contest organizer as the creator of the object and, if the object is simply something that displays a texture, the entire work becomes attributed to the creator of the prim, which, in this case, is the contest organizer.
Certainly, the artist initially gets recognition because a placard with their name is displayed alongside the work during the exhibition. But after the work is sold, there is usually no record of the artist's name with the work. Long after the piece has been sold, would the purchaser even remember the artist's name? And inside SL, most people know to look at the creator of the object. So, people would normally assume that the creator of the object is also the artist. And, again in this case, that's wrong. So, nobody would know that the texture creator (the artist) is in fact *not* the object creator (the contest organizer). The contest organizer gets a reputation for being a great artist because of work that other people did.
Not all artists in SL are equal. Some have been in SL for a long time. Some are new to SL and were pulled in by the promise of exposure and sales inside SL. There may even be a few who don't even come into SL; they sell their work through agents, usually museum owners.
It's not even a matter of trust because a creator is required to give Copy/Transfer permissions to someone who would sell their product for them. It's not even fraud, because the artist willingly gives those permissions. It's a matter of preserving the integrity of the information about the art, specifically the attribution to the right person.
Every newbie knows how to slap a texture on a prim. There is no reason why contest organizers have to do this for artists. Every newbie knows how to set permissions on a prim. Since the artists are trusting the contest organizer with Copy/Transfer permissions, they can give modify permissions on the object too, so the object can be resized.
A warning, however: Even if you apply your textures on your own prims, don't let that give you a sense of security.
There are three ways to apply textures on a surface:
(1) By using the Edit tools to select the texture from your inventory and applying it to the prim.
(2) By dragging the texture(s) from your inventory to the prim's inventory (i.e.: the Contents tab of the Edit tool) and using a script to apply it to the surface(s).
(3) By using a script with the asset ID of the texture.
#1 is the most common way of applying textures. #2 is commonly used in objects that switch textures, like slideshow devices, but makes it easy to grab the textures from a modifiable object and apply them elsewhere depending on the texture permissions. #3 *can* be used a) legitimately, to protect your own textures by not putting them inside the object, or b) illegitimately, to apply "stolen" textures on the surfaces. For database performance, SL is designed so that the same texture with the same asset ID is saved only once in the database. And obtaining the asset ID of a texture is too easy inside SL.
Artist beware.
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