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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The Google Book Settlement grinds on

Sherwin Siy has a post that helpfully updates us all on the latest twists and turns in Google’s attempts to license the entirety of printed publishing (or as close as it can get to that, anyway).

Late on Friday, a federal court in New York received a new version of the Google Book Search settlement. As with the old version, the new one was drafted jointly by Google and its erstwhile litigation opponents: the publishers and authors who sued Google for scanning their books without permission.

Substantively, the new settlement bears a great resemblance to the old one. There’s a large number of changes (which are conveniently marked up in a downloadable file available from the settlement site here), but while they chip away at some of the rough edges of the earlier proposed settlement, the core of our antitrust concerns seems to remain.

Why is this? Orphan works and the ability of other  players to license and sell works online remains the big issue.

That main concern is that Google should not be the sole entity able to license the display of orphan and unclaimed works.

Nothing in the new settlement agreement seems to change that dynamic.

Siy continues,, explaining that:

Sure, other outlets might be able to embed a sort of Google Book reader into their web pages and act as resellers of the Google database, but that doesn’t create actual competition, especially if it’s Google-controlled information and software at the back end. All that the reseller would be doing is providing different window dressing and customer support.

Bottom line:

In the end, it’s still just Google alone in that market, and that’s something that is a real cause for concern.

Elsewhere: The Googlization of Everything

Shepard Fairey versus AP: fair use on trial?

Hope_Slate

The Obama campaign poster by Shepard Fairy, currently the subject of court action, as photographed by Slate.com

We all now know that Shepard Fairey was fibbing when he said he wasn’t using an AP photography as the basis for his famous Obama “Hope” poster.

While it is certainly not a good look, it shouldn’t change the legal basis of “fair use” on which his defence of AP’s lawsuit against him is based.

Today in Slate, Tim Wu takes a good look at fair use law as it applies in the US jurisdiction:

Copyright lawyers, when asked about fair use, love to emphasize its complexity and opacity. I won’t deny that fair use can be a little dense, yet I firmly believe the basics can be well-understood. My project is to demystify: a few details may be lost, but here goes.

The rest of the article is here.

Parallel importation of books: how it works, what it means, and a round-up of the literature

What’s the hottest topic in Australian cultural policy right now?

Parallel importation of books, of course.

The controversy stems from a decision by the government’s economic reform agency, the marvellously named Productivity Commission, to review the issue of territorial copyrights as they apply to literature in Australia. Territorial copyrights are a component of Australia’s intellectual property system, governed by our various copyright laws including Section 112A of the Copyright Act of 1968.

Today I take a close look at this report and examine what it recommends. Amazingly, we’ll discover that the very same Commission which recommends removing one sort of trade barrier for publishing also recommends introducing a new form of protection to replace it.

There’s been an avalanche of anguish from authors and publishers on this issue, and a smaller but smugger outbreak of schadenfraude by neo-liberals, book chains and others who enjoy watching skivvy-wearing writers squirm. But if you delve into the Commission’s report, you can quickly find the issues as stake.

So, are you ready? Then let’s begin.

Continue reading

The Googlization of Everything

Robert Darnton has written a long and interesting article about the Google books class action at the New York Reveiw of Books, entitled Google and the Future of Books.

In the article, Darnton begins by describing a mythologised but historically extant “Republic of Letters” – the Enlightenment, if you like – inhabited by men like Voltaire and Rousseau, Jefferson and Madison. This Republic wasn’t always a wonderful thing, confined as it was to those rich and educated enough to gain entry, but it none-the-less represented a vision of free-and-frank intellectual exchange and discussion which has endured:

One way to understand this system is to draw on the sociology of knowledge, notably Pierre Bourdieu’s notion of literature as a power field composed of contending positions within the rules of a game that itself is subordinate to the dominating forces of society at large. But one needn’t subscribe to Bourdieu’s school of sociology in order to acknowledge the connections between literature and power. Seen from the perspective of the players, the realities of literary life contradicted the lofty ideals of the Enlightenment. Despite its principles, the Republic of Letters, as it actually operated, was a closed world, inaccessible to the underprivileged. Yet I want to invoke the Enlightenment in an argument for openness in general and for open access in particular.

Darnton argues there is a similar tension between the principles of free access and open information embodied by many libraries and educational institutions, and the money and power at stake in the information they generate, distribute and control. He points out that copyright is specifically set down in Article I of the United States Consititution ‘”for limited times” only and subject to the higher purpose of promoting “the progress of science and useful arts.”‘ In the 1780s this meant a 14 year term with one extension. Now, of course, copyright has lengethened to more than a century.

This long and interesting article is in many ways an elaboration and commentary on Lawrence Lessig’s work, but contains many fascinating observations of the contentious interface between the public and prviate spheres of knowledge. For instance, did you know that relatively obscure journals charge tens of thousands of dollarsz to public and unviersity libraries?

… the Journal of Comparative Neurology now costs $25,910 for a year’s subscription; Tetrahedron costs $17,969 (or $39,739, if bundled with related publications as a Tetrahedron package); the average price of a chemistry journal is $3,490; and the ripple effects have damaged intellectual life throughout the world of learning. Owing to the skyrocketing cost of serials, libraries that used to spend 50 percent of their acquisitions budget on monographs now spend 25 percent or less. University presses, which depend on sales to libraries, cannot cover their costs by publishing monographs. And young scholars who depend on publishing to advance their careers are now in danger of perishing.

But now, of course, one corporation is changing that business model: Google, with its ground-breaking settlement known simply as the Google Book Settlement. Although there has been some in depth commentary on this topic – most notably from Siva Vaidhyanathan – there has been suprisingly little attention paid to it in cultural and economics circles. When Darnton takes the time to read through the entire 134 page settlement, he is dumbfoudned by the scale of the settlement:

… here is a proposal that could result in the world’s largest library. It would, to be sure, be a digital library, but it could dwarf the Library of Congress and all the national libraries of Europe. Moreover, in pursuing the terms of the settlement with the authors and publishers, Google could also become the world’s largest book business—not a chain of stores but an electronic supply service that could out-Amazon Amazon.

The problem, Darnton realises, is that Google is not just creating the world’s largest library: it is also creating the world’s largest research infrastructure monopoly, one controlled in the end by the board of a for-profit corporation – for good or evil.

The money quote in Darnton’s article is this, which makes you realise the scale of the opportunities missed by the 1990’s IP gold-rush:

Looking back over the course of digitization from the 1990s, we now can see that we missed a great opportunity. Action by Congress and the Library of Congress or a grand alliance of research libraries supported by a coalition of foundations could have done the job at a feasible cost and designed it in a manner that would have put the public interest first. By spreading the cost in various ways—a rental based on the amount of use of a database or a budget line in the National Endowment for the Humanities or the Library of Congress—we could have provided authors and publishers with a legitimate income, while maintaining an open access repository or one in which access was based on reasonable fees. We could have created a National Digital Library—the twenty-first-century equivalent of the Library of Alexandria. It is too late now. Not only have we failed to realize that possibility, but, even worse, we are allowing a question of public policy—the control of access to information—to be determined by private lawsuit.

Muxtape shows the major labels still don’t get it

Sasha Frere-Jones at The New Yorker has an interview with Muxtape founder Justin Ouellette about his website. For those who don’t know what Muxtape is, Frere-Jones explains:

My favorite development on the Web in 2008 was Muxtape. The idea was useful and its execution was satisfyingly simple. Users could upload MP3s to the Muxtape server and make mixtapes of up to twelve songs each. Muxtape then rendered the mixtape visually as a vertical list in 36-point Helvetica on a single Web page. Click on a title, and the sequence would play in order. Editing and managing tapes was easy and all you needed to create a mix was an e-mail address. Each muxtape had its own URL, like sfj.muxtape.com.

Predictably and depressingly, the RIAA and major labels threatened to sue and Ouellette had to take Muxtape down. As he explains:

Major labels know that charging for streaming will be big business as they move forward, especially as traditional sales decline. The promotional value of streaming, however real it may be right now, isn’t big enough to keep labels from charging for it. The problem is that the price they demand is only realistic for an operation the size of MySpace. The labels would rather shut a site like Muxtape down than make a deal proportional to its size. I agree that it doesn’t make much sense.

And there you have it: the tale of the economic decline of music publishing in one esay anecdote. Muxtape has the potential to be the next Napster. It’s hard to believe labels would be this stupid …  oh hang on.

Happily, Muxtape is back with a limited set of artists who have negotiated directly with Oullette, including some pretty well-known acts such Of Montreal and Girl Talk. It will be interesting to see how the site develops, but I’m tipping it as one to watch in 2009.

The Resale Royalty Right for Visual Artists Bill 2008

The Parliamentary Library has published a fantastic primer (called a “Bills Digest“) on Peter Garrett’s Resale Royalty Bill.

As usual with the Library, it contains a thorough analysis of the history and intellectual arguments for and against the bill, as well as a useful reference section. This is probably the best review document for the entire resale royalty debate. The digest concludes:

As can been seen from the ‘Background’ section of this digest there have been a number of formal inquiries into the issue of a resale royalty right.  Some have made recommendations in favour of a resale royalty scheme such as the one proposed by this Bill, and others, in particular the Senate Standing Committee on Environment, Communications, Information Technology and the Arts as recently as 2007, did not.  Furthermore, even within the art world, there are mixed views about whether the proposed scheme will ensure that resale royalties actually reach those to whom they should be paid.

Another interesting aspect of the bill is the legal definition it gives to ‘works of graphic or plastic art’ – which the bill states as “pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs.” I wonder where installations or sound and video art fit in here? (Bear in mind of course that moving images and phonographic recordings are covered by their own copyrights).

Hollywood versus iiNet: safe harbours or choppy seas?

Raena Lea-Shannon has an excellent story today in NewMatilda.com about the current lawsuit by a consortium of film and TV distributors against Australian ISP iiNet.

Running through the fascinating history of the case law (which includes a suit by Australian author Frank Moorhouse and the infamous Sharman KaZaa case), Lea-Shannon demonstrates that the safe-harbour provisions written into the Copyright Amendment (Digital Agenda) Act 2000 won’t necessarily protect iiNet, particularly if it can be shown to have dragged its feet in allowing users to torrent pirated files:

What is therefore going to be of crucial importance to the decision in the iiNET case will be whether the court finds that iiNET has done something more than being a mere messenger.

The “something more” that the Federal Court is being asked by the plaintiffs to consider, include that iiNET: took no action in response to notifications sent on behalf of the applicants; offered encouragement to iiNET users to engage in, or continue to engage in, infringement of the plaintiffs’ copyright; failed to enforce terms and conditions prohibiting use of iiNET services to infringe copyright; continued to offer iiNET services to customers who were infringing the plaintiffs’ copyright; and, through its own inactivity and indifference, permitted a situation to develop and continue where iiNET users engaged in or continued infringe the plaintiffs’ copyright.

Internet service providers have argued that they are subject to obligations to their subscribers under the Telecommunications Act and Privacy Act. Giving away information about subscribers can be an offence and in breach of their own terms of service with subscribers. How, if at all, will the court take that into consideration? Is it possible for the parties to settle the matter and come up with a code of conduct that works?

The outcome of this case will define the relationship under Australian law between ISPs and the film, television and music industries for quite some time and that relationship will determine how Australians will entertain themselves well into the future. Watch this space.

I will indeed be watching.