For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Tuesday, 22 July 2014

U.S. Representatives Hear about Droit de Suite and Droit Moral

This portfolio should be enough
to put you through college, my son
The U.S. House of Representatives Subcommittee on Courts, Intellectual Property and the Internet, held a Hearing on July 15 on “Moral Rights, Termination Rights, Resale Royalty, and Copyright Term.” I jumped at the opportunity to write about it, as the hearing gave me a chance to pepper my post with famous French copyright expressions such as droit de suite, joie de vivre, and droit moral.

Resale Royalty, or droit de suite for us béret-wearing IP attorneys, is the right for artists to profit financially from the subsequent resale of their work and thus being able to benefit from the increased value of their own reputation as artists. When France first adopted such a right in 1920, legislators were shown during the debate a drawing of a child in rags pointing at a painting that sold for a hefty sum at an auction and wailing “It’s one of Papa’s paintings!”

Indeed, there is an inherent unfairness in the first sale doctrine for visual artists, as they produce works of art which may not be mass-reproduced without losing their fine art status, and thus must make a living by selling their original art. In the U.S., only California has a droit de suite, the California Resale Royalties Act in 1976, which provides visual artists a royalty of 5% of the sale proceeds if the seller resides in California or if the sale takes place in California. The law, however, has recently been declared unconstitutional by a District Court under the dormant Commerce Clause, which prevents U.S. states from unduly burdening interstate commerce. The case is on appeal.

There is no federal droit de suite. The Copyright Office had published a report on the issue in 1992 and at the time did not recommend adopting such right. It noted, however, that Congress should take another look at it if the European Community (now the European Union) would extend this right to all its Member States. It did so in 2001 when adopting Directive 2001/84/EC on the resale right for the benefit of the author of an original work of art. The Copyright office published in December 2013 an adjunct report on resale royalties for visual artists and concluded that U.S. visual artists may indeed be disadvantaged if lack of an U.S. droit de suite prevents them from gaining financially from subsequent sales of their works as they increase in value. It thus supported Congress’consideration on adopting such a right in the U.S.

 Article 14ter of the Berne Convention provides for a droit de suite, and the U.S. joined the Convention in 1989, but implementing article 14ter is only optional. However, article 14ter is reciprocal, and since the U.S. does not have a resale royalty, U.S. artists are not able to take advantage of the droit de suite if their work is sold in countries having such a right. As more than seventy countries have adopted such resale royalties rights, such as the U.K. or France, and as Canada and China are also considering adopting it, the issue of non-reciprocity is likely to become even more salient for U.S. visual artists.

 This is why Representative Jerry Nadler (D-NY) introduced in February 2014 a bill, H.R. 4103, the American Royalties Too Act of 2014 (ART), which would provide artists a resale royalty if their work of visual art is sold at an auction for no less than $5,000. This relatively low threshold follows the recommendation of the 2013 Copyright Office report, so as not to benefit only the most famous artists. The royalty would be the lesser amount of 5% of the sale or $35,000. Visual artists’ collecting societies would be in charge of distributing the royalties to the artists. Failure to pay the royalty would be considered copyright infringement and plaintiff could seek statutory damages. 

U.S. auction houses are lobbying hard against ART, arguing that it would hurt the art market, but artists are in favor of it. Rep. Nadler noted in his introductory speech to the Hearing that the national arts advocacy organization Americans for the Arts supports this legislation, as well as the Visual Artists’ Rights Coalition, which includes the Artists Rights Society, the Visual Artists and Galleries Association, the American Society of Illustrators Partnership, the National Cartoonists Society, the Association of American Editorial Cartoonists, and the Association of Medical Illustrators.

No doubt, in order to continue to force their witnesses to speak French, the Subcommittee Hearing also discussed droit moral, which protects the non-economic rights of the artist, such as the right of integrity of the work or right to attribution. U.S. copyright law provides for limited moral rights under the federal Visual Artists Rights Act of 1990 (VARA), which provides authors of works of visual arts a right to attribution and integrity. Only single copies of drawings, print or sculpture, or limited editions of 200 copies or fewer signed and numbered by the author, are protected by VARA. Representative John Conyers Jr. (D-MI) noted during his introductory speech that courts have struggled to interpret VARA. Rep. Conyers also noted that droit moral can be awarded by contract. However, I would say that only artists with quite a bit of clout and an IP attorney on retainer (Yeah!) would be in the position of negotiating such rights.

Congress also heard Rick Carnes, a songwriter and the President of the Songwriters Guild of America, testifying in favor of granting moral rights to music creators. For Mr. Carnes, “[a]n essential element of moral rights… is the ability to have a remedy when we are wronged” (p.5). Mr. Carnes also testified in favor of establishing small claims copyright courts so that songwriters could enforce their copyright more easily and at a lower cost, a concept supported by the Copyright Office. Mr. Carnes testified that, for songwriters, “each song we write is our baby” and so the moral right of attribution is particularly important.

This view was shared by Professor Michael W. Caroll, the Public Lead for Creative Commons USA, who testified that the various Creative Commons licenses, while allowing royalty-free sharing and reuse of work at no cost, also require attribution in exchange for the use of the work. Professor Caroll noted that receiving attribution is “in some cases… more important to the creator than any interest in profit or compensation” (p.4).

Unlike the ART bill, there is no bill introduced in Congress to award more comprehensive moral rights to all artists. However, Congress seems to be concerned about protecting every artist, not only the more famous ones, and so may introduce in a few years a bill to provide moral rights, at least the right to attribution, to every work of art protected by copyright. But that is only a guess.

9 comments:

john r walker said...

Marie
I am an artist and not in favor of compulsory ARR at all- it is simply a unfair tax, tricked up as a compulsory 'individual' right of collection societies.
Under the current US proposal the right will be transferable, many lesser known to moderately well known artists will agree to transfer the right to the purchaser, in exchange for a better first sale price. And therefore the person who eventually resells that artwork would be, the right-holder.

john r walker said...

Marie Re reciprocity, Australia has a ARR scheme but after 4 years it still has not been granted reciprocity, by the EC/UK.

Uncle Wiggily said...

I think that we will see peace in the Middle East and an end to global warming before the USA embraces real moral rights and droit de suite.

Anonymous said...

Uncle Wiggily,

Curious as to what you think the impediment is.

Is it the scope of what is considered "real" moral rights?

Is it the notion that certain things (even including personal efforts) cannot take things "out of the commons"?

I'm curious - Having a stand and how one arrives at that viewpoint are two very different things. The geek in me thinks of a vector. I see the arrow point from your comment, but do not see wither the starting point nor the magnitude of the vector.

john r walker said...

The combination of the various caps on the max value of the royalty payment and the Life + 70 years provision means that the number of max value payments to the numerous European moderns, Picasso, Matisse and so on and also recent Europeans Kiefer Hirst and so on, will out number the number of max value payments to USA artists and their estates.

There would be a net flow of money from the USA to the estates of mostly dead Europeans.
The insult/folly that drove the American revolution was a restraint of trade that paid to 'absentee' landlords.

The artists societies and their associated collection societies are very euro centric.
In Australia they managed to sort of get their way and a stately dome complete with ice skating was built, but in a hot climate the power bills are costly.

The March of Folly is a great read.

Anonymous said...

"Indeed, there is an inherent unfairness in the first sale doctrine for visual artists, as they produce works of art which may not be mass-reproduced without losing their fine art status, and thus must make a living by selling their original art."

My job too is unfair. As it requires me to deal with casework, which differs in its detail each time, I cannot mass-produce the work I did earlier. The only way to keep my employer paying me is to keep turning up and doing more work.

john r walker said...

Art Resale Royalties, by value, overwhelmingly go to the estates of a handful of artists who- when they were alive- sold a lot of art at good prices. The most recent EC report on ARR in Europe gives the percentage of total money going to living artists as just %18.

I think that Thomas Piketty would describe ARR as a prime example of inherited privilege and growing extreme inequality.

Stuart Semple said...

Hi all. I am an artist here in the UK and we have been benefiting from the right for quite some time. I know it may seem like an unecesarry tax on the art trade at a glance, but really over here we've proven that it really isn't much more of a logistical issue for the dealers, galleries and museums. Personally it's lovely to know that as my works go out into the world and others benefit from their raise in price I receive a little something for my work. I think it's vital that we are supporting the people that make the work, the artists! Without them there really is no market. It is a relatively small proportion of the sale, and with auction houses taking such a huge wedge in the form of buyers and sellers premiums, It's only really fair that the artist has a little something too. Royalties have worked in the music industry for eons. I think the UK is a great example of how this can and will work over there. The right has made a big difference to my life. I am certainly alive! And my works most certainly don't go into the millions, I've seen first hand, the right help photographers and illustrators, who's work often fetches far less than painters and sculptors on the secondary market. In my eyes it is an incredibly inclusive right.

john r walker said...

Stuart you are on the board of DACS, a collection society that gets lots of compulsory management fees out of ARR. If you want to impose the royalty on your own works, go for it, but you have no right to impose the royalty on me.

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