Royalties for Visual Artists?

We’re all familiar with royalties for writers (or visual artists who write books). A percentage of the retail price or the net price (what the publisher receives for the book) is paid to the author. But what about royalties on the sale of paintings, sculptures, and other unique works of art? The Copyright Office has now asked for comments about whether federal legislation should be enacted to create such a right to royalties.

This “follow-up” right has existed in France since 1920 and also exists in many other countries. In the United States a number of model contracts were proposed that, if signed by the buyer of a work, would create a right on the part of the artist to receive up to 15% of the profit in the event of a resale. In 1977, the state of California pioneered by enacted an art resale proceeds law that required payment to the artist of at least 5% of the resale price. The complexities of the law are explored in Legal Guide for the Visual Artist (pages 131-132).

Some commentators questioned the constitutionality of the California law. It appeared that a 1981 case resolved this issue in Morseburg v. Balyon in which the court held the law to be constitutional and wrote in its opinion this “is the very type of innovative lawmaking that our federalist system is designed to encourage.” However, a federal
judge struck down the entire law in May, 2012, because the law controlled transactions occurring outside of the state of California and thus violated the commerce clause of the Constitution. This decision is now under appeal.

Bills introduced in the House and Senate in December, 2011, would create a resale proceeds right for artists along the lines of the California law.

The Copyright Office is now seeking to gather information about a federal resale royalty right. The Copyright Office “published a Federal Register notice requesting written comments on how current copyright law affects and supports visual artists and how a
federal resale royalty right for visual artists would affect current and future practices of groups or individuals involved in the creation, licensing, sale, exhibition, dissemination, and preservation of works of visual art. Specifically, the Office seeks comments on the means by which visual artists exploit their works under existing law as well as the issues and obstacles that may be encountered when considering a federal resale royalty right in the United States. The notice of inquiry is available at www.copyright.gov/docs/resaleroyalty. Comments are due by 5:00pm EST on November 5, 2012.”

Whatever the fate of the California law, an amendment to the federal copyright law would be a far more efficient and wide-reaching mechanism to ensure that visual artists benefit if their works increase in value over time.

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