Young up-and-coming artists often find themselves at the mercy of art dealers, collectors, curators and others who seek to commercialise and profit from their creative efforts. Such artists are at a position of disadvantage concerning the commercial resale of art. They often enter into sale transactions on less-than-fair commercial terms hoping to obtain exposure within the art community. Unfortunately, unestablished artists often sell their works for nominal or exorbitantly low fees, only to have their works later resold for generous sums. This article offers an overview of the application of resale royalty rights and what they entail.
How Did Resale Royalty Rights Come About?
The great Vincent Van Gogh, now recognised as one of the most influential artistic minds of all time, died in poverty and relative obscurity. A similar fate persists in contemporary times, as seen in the case of Mathew Brady, an American photographer dubbed “the father of photojournalism” and best remembered for his depictions of the American Civil War. He was a troubled man who lived in the 1800s, plagued with alcoholism and poverty. Congress purchased his depictions for a nominal sum.
Australian artists are not immune to these circumstances. In particular, Indigenous artists have had their works exploited and purchased at well below market price for years. This is despite the relative importance and scarcity of the artworks. To address this trend of what one can only label as “artistic abuse,” the Australian government introduced the Resale Royalty Right for Visual Artists Act 2009 (Cth) (Act).
The Act grants rights known as ‘resale royalty rights,’ entitling the artist to 5% of the final resale price. The Copyright Agency enforces resale royalty rights, and to take advantage of the benefits under the scheme, artists should register with the agency. If the artist fails to do so, the agency will use its “best endeavours” to locate the author of an artwork.
Application of Resale Royalty Rights
All visual artists automatically have resale royalty rights. However, the scheme is only triggered if the Act’s specific pre-conditions are met. Some of the critical prerequisites are as follows:
- the artwork in question must be an original piece;
- the artwork in question cannot be a building, a model or plan of a building, a circuit layout or a manuscript; and
- the artwork must have been resold for a value of no less than $1,000.
When defining what qualifies as an ‘artwork,’ you must note that the Act broadly interprets the term. There are also some exceptions under the Act (as identified above). Accordingly, an artwork can consist of a painting, ceramic works, a sculpture, a collage, glassware and even jewellery.
A notable limitation of the resale royalty rights scheme and the Act is that it only applies to artworks sold for a retail value of more than $1,000. Artists do not need to report artworks sold for less to the Copyright Agency, and the author of the work is not eligible for any resale royalties. Further, the Act only applies to Australian Citizens or residents, thereby excluding international artists.
Continue reading this article below the formCommercial Resales
Another major limitation to the application of the scheme is that resale royalty rights only apply to the commercial resale of artworks by an ‘art market professional’. Art gallery owners, museum owners, art dealers, and other parties actively engaged in selling artwork fall within the broad definition of this term. Therefore, the scheme does not apply to sales made by private buyers, family or friends who do not trade in art as a business.
Moreover, it does not apply to art buyers who acquire art with the intention of commercialising the artwork through means other than sale. For instance, those who intend to apply, modify or otherwise reproduce the artwork on various mediums, such as:
- t-shirts;
- posters;
- mugs; or
- promotional and marketing materials.
Your business’ brand represents your values, identity and reputation. Learn how to create a successful brand and protect it.
Copyright Agency
In providing its services, the Copyright Agency will charge an administration fee of up to 15% plus GST per royalty payment payable to the artist. An artist can claim GST if they are registered for it. Should an artist wish to avoid paying the administration fee, they can seek to recoup the royalty payment directly from the commercial art reseller. The artist should complete this within 21 days of the sale notification appearing on the Resale Royalty website.
Key Takeaways
The Copyright Agency collects resale royalties. The scheme grants the artist a 5% entitlement of the final resale price. This rate remains constant across all sales. All parties involved in the commercial resale of artwork must ensure the payment of the royalty to the Copyright Agency. Accordingly, multiple parties can bear proportionate or unequal liability in respect of the royalty payable. Ultimately, this is a matter for negotiation between the commercial resellers and does not concern the artist.
If you would like to know more about resale royalty rights or your obligations under copyright law in Australia, our experienced intellectual property lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
The Copyright Agency keeps a record of all art sold and updates the website as they are notified of sales. As an artist, you can register directly through their website to ensure your contact and banking information are readily available.
Artists who are alive or beneficiaries of estates where the artist passed away 70 years ago or less have entitlements.
The law mandates that those in the business of selling art must disclose sales that meet the thresholds of the Act. Additionally, the seller and buyer may negotiate the royalty payment arrangement, but they must pay it. The payer can make the payment to the Copyright Agency or directly to the artist if requested.
We appreciate your feedback – your submission has been successfully received.
