The Resale Royalty bill gets up

Auction houses like Christie's are the main targets of the new Resale Royalty law that will collect an extra 5% fee for resold works of visual art

Many of us didn’t notice it – what with the entire Liberal Party melting down over the emissions trading scheme – but last week, the Australian Senate passed the Resale Royalty Right for Visual Artists Bill 2009. This marks the passage into legislation of an Australia droit de suite style law, giving artists a 5% royalty on the second and subsequent resale of their artworks.

How will it work? Much like other copyright royalties, the government will tender out the collection of the royalty payment to a government-sanctioned monopoly called a collection agency. Australia, like many other industrialised nations, has several of these that variously collect rents on economic activities related to copyrighted material – for instance the playing of music on radio and television, or the reproduction of newspaper articles by media monitoring businesses. Most industry insiders expect the existing visual royalties collection agency Viscopy to get the gig, but ther is a possibility other agencies could tender, like the publishing agency Copyright Agency Ltd.

Who pays? In the main, it will be auction houses, art dealers and commercial galleries. However, the legislation broadly covers basically any 2nd or subsequent resale of an artwork, so this could potentially expand to cover all sorts of interesting areas, like big businesses liquidating their corporate art collections or trustees of deceased estates. On the other hand, since most of these kinds of sales are generally sold at auction or through a dealer anyway, the likelihood is that these larger vendors will be the main payers of the new royalty fee.

What’s covered by the new legislation? A broad and very interesting range of material, defined in section 7 of the bill:

Section 7(2):  Works of visual art include, but are not limited to, the following:

(a)  artists’ books;

(b)  batiks;

(c)  carvings;

(d)  ceramics;

(e)  collages;

(f)  digital artworks;

(g)  drawings;

(h)  engravings;

(i)  fine art jewellery;

(j)  glassware;

(k)  installations;

(l)  lithographs;

(m)  multimedia artworks;

(n)  paintings;

(o)  photographs;

(p)  pictures;

(q)  prints;

(r)  sculptures;

(s)  tapestries;

(t)  video artworks;

(u)  weavings;

(v)  any other things prescribed by the regulations.

That’s a lot of stuff. It also covers certain digital media artworks in a way that could eventually prove quite controversial. For instance, video and digital artworks aren’t really defined in any detailed way. Is a “digital artwork” an artefact containing the digital artwork? Is it the source code? Is it any copy or instance of the digital artwork? If I put my digital artwork on eBay and sell it, retail, to all comers, for $1001, can I generate an endless stream of $50 royalty payments?

The history of copyright laws in other areas suggests that case law tends to expand the scope of the legal domain of copyright ownership, generally pushed by zealous litigation from copyright agencies. In Australia, for instance, we’ve seen a big push recently by music publishers to gain access to revenue streams from nightclubs on the rather flimsy (but none-the-less legally accepted) argument that nightclub patrons are attending in order to hear music – a craven but successful cash-grab that I attacked in this 2007 article for Arts Hub. Emboldened by their win in the nightclubs decision, music publishers are now going after gyms and fitness centres.

What sort of areas could copyright law push into in the wake of this bill? I suspect there will be plenty of work for aspiring copyright lawyers in coming years.

Elsewhere: the Australian Copyright Council has a good primer on the issues at hand. It points out that many fewer artworks are likely to generate royalties than the government thinks, because resale rates of Australian artworks are comparatively low in what remains a thinly-traded market.

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4 thoughts on “The Resale Royalty bill gets up

  1. it wasn’t music publishers that were seeking increase
    (ie APRA ) it was the record companies via PPCA. That and the fact that Aust has been rather far behind in public broadcast rights for sound recording owners. The reason it is good to have a hike is that all those poor drummers wouldn’t get paid otherwise. Maybe that isn’t a good thing? you can take that up with lindy morrison.

    more horrifying that ppca push was ARIA invention of a DJ licence.

    the droit de suite has same problem as “who is the artist” in digital works, but then again Jeff Koons has been dealing with that struggle for years in more traditional concepts of art. the concern might be that there is a concept of “artisticness” that hasn’t been part of the copyright protection of artistic works before.

  2. Hi Nomesm

    You’re right to say that the legal entity that went to the copyright tribunal court over a royalty increase from nightclubs was the PPCA – but the PPCA is essentially a captive organisation run by the major labels. The PPCA’s board contains the CEO or senior directors of the big 4 music publishers plus a couple of token independent directors.

    Believe it or not I have taken this issue up with Lindy Morrison in a quite heated Australia talks Back on Radio National two years ago. To argue that “drummers wouldn’t get paid otherwise” if it wasn’t for the nightclub royalty case is pretty disingenuous I think: the bulk of PPCA royalties go straight back to the major labels, not to session musicians (who in any case have to have been lucky enough to sign particular contracts nominating them as “featured artists” in order to be awarded PPCA royalties).

    ARIA’s DJ license is a different issue … you could argue it actually advantages composers and musicians because DJs are reporting which songs they are playing, which then flows back to artists through live performance royalties.

    Finally, the “artisticness” of copyrighted works doesn’t come in to it: what counts is originality, as in other areas of copyright law.

  3. i have worked in this area a while. the PPCA board is made up of record company people. there is still seperate legal entities between the two types of copyright holders (songwriter copyright owners/ music publishers and sound recording copyright/ record companies). the legal seperation is maintained, even on the indie side like ivy league.

    the aria licence is about format shifting, not the payment of songwriters or performers for the embodiment of a copyright work. the songwriter still gets apra performance fees regardless of the ARIA licence. it is money grabbing and an assumption that the dj’s haven’t legitimately paid for what they are playing. IMHO.

    artistic-ness was more a comment on, if i have a painting of dirtfish and i sell it, dirtfish should get a %. down with that, he deserves it. if i sell my child’s painting, and that painting gets further sold, and frankly, it is a bit shit, should that be traced? like the dutch case which found no moral rights in visual copyright work, just because it was a fuel pump. at what point does the art come within the scope of art for the purpose of obtaining further “commonidifcation” via resale royalty.

    in terms of post mod artists like koons, he doesn’t make the art, he hires masters to execute his vision. in digital form, how do you seperate the author.

    from digital point of view there is a completely different commodification of the works. so the quality of reproduction is equally as high, whereas, the original non digital repros will never have that. it is hard enough at the moment for auction houses to pay their viscopy licences for auction guide repros, how this is going to be implemented when they are already at each others throats will be interesting development.

    i have also had the lindy morrison run in, hence my comment :). i hadn’t read your arts hub article before i posted. apologies.

  4. One of the things I love about the examples used to explain how the Resale Royalty will work is the way they all show art being sold for a profit, and royalties flowing to the artist. I’d like to see one that shows how the new Act will work when an artwork is sold at a loss, with the royalty flowing to a distant relative (or relatives) of the artist who obtained the right 50 years after the artist’s death by a long and complicated process of inhertance. How such a process assists the artist in any way I can’t clearly see … and yet one key justification for the introduction of the legislation was that it would be a postive contribution to artist’s incomes. Talking about the contribution it will make to the income of the artist’s grandchildren … that’s another matter.

    … if a work resold every 10 years, there would prossibly be more resales during the 70 year post-mortem period, than during the artist’s life. If the work increased in value at a regular rate, the value of the 5% would also increase … the likey scenario is that the heirs would earn more from the resale royalty than the artist. … Then there’s the distribution issue … easy if there is only one grandchild … harder is there are a couple of dozen. Remember, going back 70 years takes us to the start of the 1940s … so technically this sort of legislation could apply to works created in the late 19th Century.

    If the policy objective of the resale royalty is to contribute to the incomes of living artists … then it would have been easy to make it apply only to the work of living artists.

    An interesting element of the legislation is that it gives artists (unlike other authors) an economic right that can’t be waived, or sold, or even given away. All an artist can do is choose not to claim it.

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