Musicians and writers can continue to profit from their creative works through copyright and licensing laws, but until recently in Australia visual artists, have not been entitled to any benefits after the initial commercial resale of their works.
Changes to the law which came into effect on 9 January 2010 mean visual artists whose works meet certain criteria will qualify for resale royalty rights on the secondary sale of their works.
The Resale Royalty Right for Visual Artists Act 2009 (Cth) provides for the payment of resale rights on the secondary commercial resale of a visual artwork.
This was considered fair particularly given the substantial difference between the price paid for a piece of art upon first sale and years later.
Visual artists are now entitled to receive a royalty on the secondary commercial re-sale of their work during the artist’s lifetime and for a period of up to 70 years after their death as long as the work sells for $1,000 or more. The royalty payable will only be applicable to the commercial re-sale of artwork acquired after the commencement of the legislation. The royalty is payable at the rate of 5% and the sale price of the artwork, including GST but excluding any buyer’s premium or other taxes.
To qualify under the regime an artwork must be an original work of visual art, which includes but isn’t confined to paintings, photographs, drawings, multimedia artworks, pictures, prints, digital artworks, video artworks, collages, tapestries, lithographs and sculptures.
The Copyright Agency Ltd (CAL) will be responsible for administering the royalties payable and the sellers of an artwork must give CAL notice within 90 days from the commercial resale, after which CAL can request any further information necessary to determine whether a royalty is payable. The notice must include enough information to evaluate whether a royalty right ispayable, to whom it is payable and the amount payable. The royalty right can’t be assigned, sold or charged by an artists and is not available to creditors in the event of the artist’s bankruptcy. An artist cannot enter into an agreement to waive the royalty right or to share or repay it, and any such agreement will be null and void.
The definition of artwork includes many different forms of original artistic works and the examples given aren’t exhaustive, as the intention is to make provision for new types of visual artistic expression. However architectural works, including drawings and plans or models of a building are excluded specifically from the definition of an artwork under the legislation.
Only artworks which artists have a limited ability to exploit financially are included in the regime, therefore works of art which can be mass-produced such as posters, mass-produced photos and other prints, films and industrial designs are excluded from the new scheme. However if an artist produces multiple original artworks in a limited edition the artists will be covered by the Act.
To qualify as a commercial resale, means when an artwork is transferred to an art market professional for financial consideration. An art market professional includes an auctioneer, the owner or operator of an art gallery or museum, or a person who deals in the sale of art. Managers of major private or corporate art collections are also caught by the Act. If someone engages in the dealing of art on a regular basis they will also be caught under the Act, even though this is not their primary business, such as an antique dealers who sell other items apart from artwork.
After the legislative changes, which brings Australian law into line with other jurisdictions which have similar schemes, those operating in the art industry must record all arrangements with artists in relation to the transfer of art, and make arrangements to pay any applicable royalties to CAL. The decision as to who will pay the royalty where there are agents involved in the second transfer of the work can be determined by contract but there are provisions to render parties to the sale jointly and severally liable where this isn’t set out contractually.
In terms of who is entitled to the royalty, where a single artist is involved in producing the work, is identifiable and living at the time of the commercial resale of the artwork the artist will be entitled to the royalty provided they satisfy the residency test applicable to copyright works. Where the artist isn’t alive at the time of the re-sale it will be held by their successors in title.
The Act has been perceived as an important step forward for visual artists in giving them some ability to exploit their creative works beyond the first commercial sale of their work, allowing them to derive financial benefits from the future sales of their work which can often be very significant, but which they deprived from sharing in.
No related posts.