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 occupy a particular position of disadvantage concerning commercial resellers of art. They are likely to enter into sale transactions on less than commercial terms in the hopes that by doing so they will improve their celebrity or at the very least obtain some exposure and recognition within the art community. Naively, unestablished artists sell their works for nominal or exorbitantly low fees, only to have the works later resold for generous sums.
The great Vincent Van Gogh (who is now recognised as one of the most influential artistic minds of all time) himself passed away poor and virtually unknown. This sad tale of woe is repeated innumerable times more and nowhere it is more apparent than in the case of Mathew Brady, an American photographer who has been budded the father of photojournalism and is best remembered for his depictions of the American Civil War. A troubled man, plagued with alcoholism and poverty, his depictions were purchased by Congress for a nominal sum.
Australian artists are not immune to this phenomena. In particular, indigenous artists have had their works exploited and purchased at gross undervalues for years, given the relative importance and scarcity of the artworks. To curb this trend of what can only be dubbed ‘artistic abuse’ on 9 June 2010 the federal government introduced the Resale Royalty Right for Visual Artists Act 2009 (Cth) (Act). The scheme seeks to redress injustices faced by visual artists who sell their works on a once off basis. The primary purpose of the scheme is to ensure that artists receive royalties with the ongoing use and resale of their artworks following a once off sale. The rights granted under the Act are referred to as ‘resale royalty rights’. The Copyright Agency enforces resale royalty rights and thus to obtain 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
Resale royalty rights are automatic and are thus afforded to all visual artists, however, there are certain pre-conditions which must be met by the Act and the scheme contained therein will be enlivened. Some of the key pre-requisites are as follows:
- the artwork in question must be an original piece (section 7 of the Act);
- the artwork in question cannot be a building, a model or plan of a building, a circuit layout or a manuscript (section 9 of the Act); and
- the artwork must have been resold for a value of no less than one thousand dollars ($1,000) (section 10 of the Act).
Regarding what constitutes an ‘artwork’, it is important to note that the Act adopts a broad interpretation of the term (save as for exceptions expressly pronounced under the Act, some of which have been 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 one thousand dollars ($1,000). Artworks sold for less do not have to be reported to the Copyright Agency and the author of the work is not entitled to any resale royalties in respect of the same (section 10(1)(a) of the Act).
As with copyright, resale royalty rights subsist in an artwork for seventy (70) years following the artist’s death.
Another major drawback of the scheme is that resale royalty rights only apply to the commercial resale of artworks by an ‘art market professional’. The terms is broadly defined and includes art gallery owners, museum owners, art dealer and other parties who are in the business of selling artwork. Thus, the scheme would not apply to sales made by private buyers, family or friends who do not trade in art as a business.
Furthermore, it would not apply to art buyers who purchase art for the purpose of commercialising the artwork other than by sale, I.E. by applying, modifying or otherwise reproducing the artwork on various mediums, such as t-shirts, posters, mugs or promotional and marketing materials. In such an instance it cannot be said that the art buyer is ‘in the business of selling art’.
As mentioned previously, resale royalties are collected by the Copyright Agency. Under the scheme, the artist is entitled to five percent (5%) of the final resale price. The rate is set and will not vary from sale to sale. The resale royalty is payable to the Copyright Agency by all parties involved in the commercial resale of an artwork. As such, it is possible for multiple parties to 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.
In providing its services, the Copyright Agency will charge an administration fee of up to ten percent (10%) per royalty payment payable to the artist. Should an artist wish to avoid having to pay the administration fee, the artist can seen to recoup the royalty payable directly from the commercial art reseller.
If you would like to know more about resale royalty rights or your obligations under copyright law in Australia, get in contact with our intellectual property lawyers.