1. WHENTHE ARTIST NO LONGER STARVES:
THE ARTIST RESALE RIGHT INTHE UNITED
KINGDOM ANDTHE UNITED STATES
MICHAEL NABORS
COMPARATIVE LAW SEMINAR
OCTOBER 13, 2014
2.
3.
4. UNITED STATES’ ROYALTY SCHEME (BOOKS)
• Paid by the publisher, who
determines an author's royalty rate,
except in rare cases in which the
author can demand high advances
and royalties.
• Publishers advance an amount (part
of the royalty) which can constitute
the bulk of the author’s total income
plus whatever little flows from the
"running royalty" stream.
• The author and the publisher can
independently draw up the
agreement that binds them or
alongside an agent representing the
author.
Book-publishing Royalties - "Net" and "Retail" Compared
Retail Basis Net Basis
Cover Price 15.00 15.00
Discount to Booksellers 50% 50%
Wholesale Price, $ 7.50 7.50
Printing Cost 3.50 3.50
Net Income,$ 4.00 4.00
Royalty Rate 20% 20%
Royalty Calculation 0.20 x 15 0.20 x 4
Royalty,$ 3.00 0.80
5. UNITED STATES’ ROYALTY SCHEME (MUSIC)
• Composers (score), songwriters (lyrics) and writers of musical plays can own the exclusive copyright to created music
• License it for performance independent of corporates.
• A musical composition obtains protection in copyright law immediate to its reduction to tangible form – a score on
paper or a taping; but it is not protected from infringed use unless registered with the copyright authority
• Copyright Office in the United States, administered by the Library of Congress.
• No person or entity, other than the copyright owner, can use or employ the music for gain without obtaining a license from the
composer/songwriter.
• Inherently, as copyright, it confers on its owner, a distinctive "bundle" of five exclusive rights:
• (a) to make copies of the songs through print or recordings
• (b) to distribute them to the public for profit
• (c) to the "public performance right"; live or through a recording
• (d) to create a derivative work to include elements of the original music; and
• (e) to "display" it (not very relevant in context).Where the score and the lyric of a composition are
contributions of different persons, each of them is an equal owner of such rights.
• These exclusivities have led to the evolution of distinct commercial terminology used in the music industry
1. Royalties from "print rights“
2. Mechanical royalties from the recording of composed music on CDs and tape
3. Performance royalties
4. Synch (for synchronization) royalties from using or adapting the musical score
5. Digital rights from simulcasting, webcasting, streaming, downloading, and online "on-demand service".
6. CINDY SHERMAN
“UNTITLED FILM STILL #21” (1/10)
SILVERGELATIN PRINT
8” X 10”
1977-80
• One print from this edition was sold
out of her studio for $50 (1977)
• This print sold for $200 to private
collector via Metro Pictures (1980)
• Sotheby’s NewYork fetched
$746,500 USD at auction (2012)
7. TRACEY EMIN
“KEEP ME SAFE” (AP 1/2)
RED NEON SCULPTURE
12.5” X 35.25”
2006
• Sold by artist for £1,000 (2006)
• Sotheby’s London fetched £60,000
GBP at auction (2014)
8. TRANSACTION COMPARISON
SOTHEBY’S NEWYORK
• Purchase (Hammer) Price
• Buyer’s Premium
• 25% on the first $100,000 of the
hammer price
• 20% on the portion of hammer price
above $100,000 up to $2 million
• 12% on any amount above $2 million
• NewYork State SalesTax (8.875%)
SOTHEBY’S LONDON
• Purchase (Hammer) Price
• Buyer’s Premium
• 25% on the first £50,000 of the
hammer price
• 20% on the portion of hammer price
above £50,000 up to £1 million
• 12% on any amount above £1 million
• Value AddedTax (17.5%)
• Artist Resale Right (Droit de Suite)
9. ARTIST RESALE RIGHT (OR DROIT DE SUITE)
• European Union’s Artist’s Resale Right Directive, Directive 2001/84/EC, of the European Parliament and of
the Council of 27 September 2001 on the Resale Right for the Benefit of the Author of an Original Work or
Art, 2001 O.J (L 272) 32-36.
• Adopted by the United Kingdom
• Living artists and artists who died within 70 years prior to the date of the sale are entitled to receive a
resale royalty each time their art work is sold by an art market professional in the European Union or
United Kingdom, subject to certain conditions
• Artist must be citizen of country within the European Union or the United Kingdom
• Amount is aggregate of the following, with a cap of €12,500 for each sale
• 0 to € 50,000 = 4%
• € 50,000.01 to € 200,000 = 3%
• € 200,000.01 to € 350,000 = 1%
• € 350,000.01 to € 500,000 = 0.5%
• Exceeding € 500,000 = 0.25%
11. STRUCTURE OF PAPER
Why the Artist Resale Right has not yet been implemented in the United
States
• Introduction
• Brief comparison and contrast of U.S. and U.K. royalty regimes
• Definition ofArtist Resale Right and history of its creation and
implementation
• Began in France in the early 1970s
• Only became E.U. law in 2001
• What took so long? Why the delay?
• Examination of the two attempts to introduce legislation into U.S. Law
• Legislative history
• Criticisms of it and how they disabled the process
12. STRUCTURE OF PAPER (CONT’D)
• Closer examination of criticisms levelled at the Artist Resale Right
• Economic argument
• Macroeconomic effect(s) on the Art Market
• Microeconomic effect on key player in the International Art Market, Sotheby’s
• Publicly traded company so records are easier to get
• Private connection to Sotheby’s via past educational endeavor
• Legal regime argument
• Potential conflicts with previously extant U.K. law
• Potential conflict with current copyright law
• Show how the criticisms were largely unwarranted
• Empirical data about overall sales in the art market, specifically London and NYC
• Empirical data regarding Sotheby’s London sales before and after implementation of
E.U. Directive
13. STRUCTURE OF PAPER (CONT’D)
• Conclusion
• Demonstrate how implementation ofArtist Resale Right in the United States is
possible
• No economic disincentivization
• No loss of sales to other art market . . . there really is not another one to go to.
• Statutory and enforcement regime could easily fit within current copyright scheme
• Plea for reconsideration to whomever is willing to listen
14. SOURCES
• International copyright agreements
• Universal CopyrightConvention
• Berne Convention for the Protection of Literary and ArtisticWorks
• E.U. and U.K statutes and regulations
• Directive 2001/84/EC, of the European Parliament and of the Council of 27 September 2001 on the
Resale Right for the Benefit of theAuthor of an OriginalWork or Art, 2001 O.J (L 272) 32-36.
• European Union Constitution
• U.S. statutes
• CopyrightAct of 1976, 17 U.S.C. § 101, et seq.
• Proposed federal legislation in re Artist Resale Right including legislative histories
• Art market reports
• Sotheby’s financial statements
• Secondary sources
• Law review articles
• Other scholarly works outside of law reviews and journals
15. THETAKEAWAY
• Fairly certain that we are all aware of royalties and what they are on some
basic level
• Want you to understand that there is a gap in the protection afforded to
the holders in copyright of works in fine art . . . the actual creators of the
work are only allowed to benefit from the first sale of their work
• Hope that you side with the artists who are almost unanimously in favor of
this addition to the royalty regime currently in place
16. WHENTHE ARTIST NO LONGER STARVES:
THE ARTIST RESALE RIGHT INTHE UNITED
KINGDOM ANDTHE UNITED STATES
MICHAEL NABORS
COMPARATIVE LAW SEMINAR
OCTOBER 13, 2014
