From The Hollywood Reporter:
Artists who sold major paintings or sculptures in 1977 are in luck. Other artists who sold work before or after that year not so much thanks to a ruling on Friday from the 9th Circuit Court of Appeals that essentially dooms their hopes of collecting royalties from resales.
Chuck Close and Laddie John Dill led class action lawsuits against Sotheby’s and Christie’s for violating the California Resale Royalties Act, which entitles artists to five percent of resale royalties under specified circumstances. California’s law became effective in 1977 and echoed how many other countries recognize a droit de suite.
As 9th Circuit Judge Jay Bybee succinctly explains in today’s opinion . . . “The droit de suite protects visual artists, who face particular difficulty in capitalizing on their work. Literary and recording artists can generally profit from their efforts by controlling the reproduction of books or music. For visual artists such as painters and sculptors, however, the right to control reproduction is often not their principal source of income. Rather, it is often the sale of their original work that allows them to make a profit. The droit de suite gives these artists an economic interest in subsequent sales of their original work, thereby allowing them to capture some of its appreciation in value after the first sale.”
. . . .
Around the time that California was passing a law giving artists the right to collect resale royalties, the U.S. Congress was amending copyright law. Of relevance here was the retainment of the first sale doctrine, which Congress had first codified in 1909.
The first sale doctrine allows those who purchase copies of copyrighted work the right to sell that particular copy notwithstanding the interests of the copyright holder.
Bybee compares distribution rights under the Copyright Act with the California Resale Royalties Act.
“The two rights differ in that one grants artists the right to receive a percentage payment on all sales of artwork after the first, while the other grants artists the right to receive full payment on the first (and only the first) sale,” he writes. “But, at root, both concern the distribution of copies of artwork and define artists’ right (or lack thereof) to payment on downstream sales of those copies.”
Link to the rest at The Hollywood Reporter
This case sounds like bad law to me. It probably needs to go to appeal.
That said… from a foreigners perspective its’ hard to understand how this law conflicts with 17 U.S. Code s109:
“(a) Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phono record… ”
Reading the CRRA I just can’t see anywhere in the law that requires the permission of the copyright owner to sell a copy of any lawfully owned good. Individual parties are and remain free to trade their property.
It isn’t even imposing an implied term in the contract that allows copyright owners to control the distribution of goods.
The CRRA is an odd law by american standards, it seems to be imposing a tax on the sale of fine art, and then automatically awarding the proceeds to a private individual.
From a foreigners perspective it’s similar to the UK plastic bag tax (where supermarkets are required to sell disposable bags at a specific minimum price and donate the money to nonprofit organisations) and/or the TV license fee (where people are required to pay a tax to operate TV equipment and pay it to the BBC).
Bottom line is I don’t think either the judgement OR the CRRA is good law. The constitution expressly gives the power to regulate copyrights to congress and not individual states, and it’s pretty clear to me that California is overreaching its powers.
I’ve been wondering – if an artist does take advantage of their right to sell reproductions, should not the purchaser of the original painting be entitled to compensation for the cheapening of their investment?
You get into such questions when a law gets passed to protect the simply foolish, not the innocent.
Which is why First Sale has stood the test of time.
Bad Laws/Rulings leave conflict and chaos in their wake.
The California Law was a sloppy attempt to game economics and the ruling is an even sloppier attempt to bypass a rock solid precedent.
States can’t overrule the Supreme Court.
Only Congress can and that if the court goes along.
They don’t call it “Supreme” for nothing.
Don’t bother.
It’s the nutty Ninth.
Instead of noting the 1977 California law was inapplicable because it violated the 1910 SCOTUS First Sale Rule, they pretended it was fine until overruled by Congress in 1978. Yeah, like the SCOTUS is going to let that stand with Stare Decisis all the rage in political fights these days.
(If California could overrule First Sale, 30 States can Overrule Roe v Wade.)
It’s the most overturned District Court for a reason.
District Court?
Federal Appeals District.
More commonly referred to as Circuit courts but I thought that might be confusing to the international visitors.
http://www.uscourts.gov/about-federal-courts/court-role-and-structure/about-us-courts-appeals
http://www.uscourts.gov/about-federal-courts/court-role-and-structure
Hmm, so I can save/make 5% by simply not selling it in CA?
Or is CA going to be like Canada and claim once in their state ‘important’ art won’t be allowed to leave?
If this is the ‘law’ in CA, then shouldn’t CA writers get some kickback on any used books sold – or just the publishers of those books?
Good thing I ordered the big bag of popping corn! 😉
So, you’re not really “buying” the artwork, not in the normal sense of the word. What they’re doing sounds more like a “license”; it’s certainly not a “sale.”
“Just say no.”