resale royalty

Resale Royalty Right in Australia

The 1709 Blog has a report about the operation of the resale royalty right scheme (here or here) given by the (then) Minister for the Arts to the Senate.

Some highlights:

  • since the scheme started in 2011, CAL (the official collecting agency) has paid out just over $805,000
  • 150 “rights holders” (I guess that would be painters or their heirs) have received the top 600 payments which totalled just under $300,000
  • 59% of the payments went to indigenous artists; of which there were 301 payments of the top 600 payments going to 91 “right holders”

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Resale royalty right in the EU

In a dispute over which of Salvador Dali’s heirs is entitled to the benefits of the Community Resale Royalty, the ECJ has ruled that this is a matter for national law.

The 1709 blog has a short report here; IPKat waxes lyrical here.

Case C?518/08, Fundación Gala-Salvador Dalí and Visual Entidad de Gestión de Artistas Plásticos (VEGAP) v Société des auteurs dans les arts graphiques et plastiques (ADAGP)

CAL was recently appointed to administer the absolutely inalienable artist’s resale royalty scheme under the Australian Act, Resale Royalty Right for Visual Artists Act 2009 (Cth), and Minister Garrett has announced that the scheme will come into force on 9 June 2010.

Section 15 of our Act will specify who the heirs can be – the person or person who satisfy “the succession test”:

Succession test
(1)  An entity satisfies the succession test in relation to resale royalty right on the commercial resale of an artistic work, if the entity satisfies:
(a)  criteria 1 and 2 (in subsections (2) and (3)); or
(b)  criteria 3 and 4 (in subsections (4) and (5)).
Criterion 1
(2)  The entity received its interest in the right by testamentary disposition, or in accordance with the rules of intestate succession, on the death of an individual.
Criterion 2
(3)  The entity is one of the following:
(a)  an individual with a beneficial interest in the right;
(b)  a charity or charitable institution with a beneficial interest in the right;
(c)  a community body with a beneficial interest in the right;
(d)  a person who holds an interest in the right in trust for:
(i)  an individual; or
(ii)  a charity or charitable institution; or
(iii)  a community body.
Criterion 3
(4)  The entity received its interest in the right on the winding up of a charity, charitable institution or a community body.
Criterion 4
(5)  The entity is a charity, charitable institution or a community body formed for substantially the same purposes as the body that was wound up.

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Resale royalty right

The previously foreshadowed bill to introduce the resale royalty right has been introduced into Parliament.

The Resale Royalty Right for Visual Artists Bill and EM can be found here.

The Bill has been referred to the House’s (not the Senate’s) Standing Committee on Climate Change, Water, Environment and the Arts for consideration and an advisory report to the House by 20 February 2009.

Presumably, if the Government and the “Coalition” can reach agreement on the terms of the Bill, it won’t be necessary to deal with those pesky independents and greenies.

Lid dip, the Australian Copyright Council.

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Resale royalty right

On Saturday, the Age carried a story about the proposed resale royalty right.

The details (yet to be implemented in legislation) are up here (pdf) and here (rtf):

The scheme will start on 1 July 2009.  It will cover:

resales of original works of visual art sold through the secondary art market where the seller has acquired the work after the legislation takes effect. It will not be restricted just to works created after the scheme starts.

If such a qualifying work is resold (in the secondary market) for AUD$1,000 or more, there will be a 5% fee payable to the artist. This is the option the then Government’s 2004 study found would generate the highest level of royalty payments. (There is no indication whether or not the $1,000 will be indexed.)  Liability for payment will be joint and several and will cascade: seller, buyer’s agent, buyer.

For these purposes, a ‘ resale’ will include:

all resales involving art market professionals, public institutions or organisations, and all resales subsequent to the first transfer of ownership, regardless of whether the first transfer was made by sale, gift or any other means.   

A ‘work of visual art’ will be:

work of art original works of graphic or plastic art, such as a painting, a collage, a drawing, a limited edition print, a sculpture, a ceramic, an item of glassware or a photograph. This definition reflects similar arrangements in the EU. 

To qualify, the author will have to be an Australian or permanent resident (or their heirs) – I wonder if this will require qualification at the time the work was made?

The fact sheet indicates the possibility of reciprocity under foreign schemes.  It suggests this might have something to do with the Berne Convention.  A resale royalty (or droit de suite) is not covered by art. 6bis, but art. 14ter.

Joshua Gans looks at the economics here.  Anyone familiar with ‘artist’s rights’ legislation in Australia could have told him that artists, like children and the mentally incompetent, won’t be getting any right to ‘opt out’.  The fact sheet confirms:

The right will be inalienable and unable to be waived. 

The then Government’s 2004 study estimated that the scheme now proposed to be adopted would have captured 72% of sales at public auction in Australian in 2003. 823 artists would have benefited, with an average royalty of $3,300.  One artist would have generated a royalty of $207,000 and, at the other extreme, another $40.  Administration costs would have been $600,000. This is much higher than the UK estimates of £1 million start up costs and £50,000 pa on-going.

For those of you concerned that this might be the end of the auction market in Australia, a UK study (where a (somewhat different) scheme is operating, didn’t think so.

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