Nadler, Hatch, Leahy & Collins Introduce Bipartisan, Bicameral American Royalties Too Act

Sep 25, 2018 Issues: Intellectual Property/Technology

WASHINGTON, D.C. -- Today, Congressman Jerrold Nadler (D-NY), Ranking Member of the House Judiciary Committee, along with Senators Orrin Hatch (R-UT) and Patrick Leahy (D-VT) and Representative Doug Collins (R-GA), released the following statements after introducing the American Royalties Too (ART) Act of 2018 in the Senate and House of Representatives. The legislation will provide a measure of equity to visual artists by allowing them to receive a portion of the sales price of their art. The ART Act amends the Copyright Act to provide creators of visual art a 5% royalty of the price paid for their art when it is resold at auction.

“I have been introducing the ART Act since 2011 and I’m proud to join my colleagues in introducing this bipartisan, bicameral version of the legislation this congress,” said Nadler. “It’s past time that visual artists and creators receive their fair share in proceeds for their creative works. More than 70 other countries already provide this resale royalty. We owe it to American artists to do what is right.  We need to pass this legislation to ensure they benefit if the value of their work increases over time and to make certain that they receive payments for their works sold in other countries.”

“Artists deserve fair compensation for their work. Unfortunately, under our current laws, artists don’t share in the benefits when their work later increases in value,” said Hatch. “Collectors and auction houses make millions when art is resold. It’s only fair that the artist who created the work in the first place receive a share as well. The ART Act will help remedy this injustice by giving artists the right to a share of the proceeds when the art they create is later resold at auction. It will help ensure artists get a fair shake.”

“For too long, visual artists in America have not benefitted from the appreciation of their work like artists in other parts of the world,” said Leahy. “The ART Act is a limited remedy that will amend the Copyright Act to provide visual artists with compensation that is long overdue.”

“American artists should be rewarded, not penalized, for the uniqueness of their work,” said Collins. “The ART Act would allow visual artists to reap the benefits of their talent and labor on a playing field that’s finally level with other countries’. Creativity is an American value, which makes treating creative expressions fairly an American virtue.”

Background

The Problem

Copyright law begins with authors and artists and promotes the creation and distribution of new works through exclusive rights, which allow most kinds of creators to enjoy royalty streams and residuals. The law even allows creators to renegotiate licenses that may have been one-sided at first. Visual artists are different.  They sell their art once and are entitled to no downstream payments. As a result, the Copyright Office concluded in a 2013 report,  “many visual artists [are] at a practical disadvantage” and are “excluded from the most significant profits that their works may generate.”

A Targeted Solution

The ART Act will provide a measure of equity to visual artists by allowing them to receive a portion of the sales price of their art. The bill amends the Copyright Act to provide creators of visual art a 5% royalty of the price paid for their art when it is resold at auction.

The royalty only applies to sales at auction houses that sell over a million dollars of art per year. Private sales are not included in the bill and exclusively online auctions are exempted. All art sold for less than $5,000 is exempted, and the 5% royalty is capped at $35,000, no matter how high the sale price is.

The collection of royalties from auction houses and distribution to artists will be administered by copyright collecting societies, as designated by the Copyright Office.

Equal Treatment for Americans

Over 70 countries provide artist resale royalties, including the UK and EU countries. These countries, however, deny American artists any resale payments under their laws because they apply a reciprocity rule: they won’t pay American artists resale royalties unless the US has in place a similar law for artists whose work is sold in the US The ART Act would fix that.

No Adverse Impacts

The 5% capped royalty for artists is far less than the auction houses charge in commission. And studies have shown that art markets remain strong after implementation of an artist resale royalty, including in the U.K., home to the two major auction houses.

Basic Fairness

The ART Act is a matter of basic fairness to artists and provides market-based support for the arts. It is narrow in scope and opposition to the idea of a resale royalty comes from foreign companies who already comply with such a law in their home country.

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