The Senate has recently passed the Federal government's long-awaited Resale Royalty Right for Visual Artists Act 2009 (Cth) (Act). Under the Act, the creator of a visual artwork will be entitled to a royalty payment each time the artwork is sold for profit on the secondary art market.
The Act seeks to address the fact that visual artists gain little benefit from copyright in comparison to other artists, as their artwork is less able to be distributed in a form that generates copyright royalties.
Many other jurisdictions, including France, Germany, Italy, Ireland and the United Kingdom, already provide resale royalty rights for visual artworks.
How the resale royalty scheme works
From the commencement of the Act (likely to be six months after it receives Royal Assent) an Australian artist who has created a visual artwork will be entitled to an uncapped royalty of five percent of the resale price:
- whenever that artwork is resold for $1,000 or more;
- during the period of the artist's life plus 70 years; and
- where the sale of the artwork is on the secondary art market.
Visual artwork is defined broadly and includes drawings, paintings, photographs, sculptures, video and digital artworks, carvings and fine art jewellery. Architecture and building plans, circuit layouts and literary, dramatic or musical manuscripts are expressly excluded.
Private sales between individuals not involving an art market professional (such as an auctioneer, art gallery owner or art dealer) are excluded from the scheme. Further, a royalty will not be payable on an initial transfer of an artwork (for example, from the artist to the first purchaser).
Importantly, where visual artwork was created before the commencement of the Act, resale royalties will only be payable on the second and subsequent resales, even if the artwork has been sold previously. This means that artists with existing bodies of work may have to wait a significant period of time before receiving the benefit of a resale royalty.
Who pays, and how?
The seller, purchaser and agent or art market professional involved in the sale of the artwork are jointly and severally liable to pay the resale royalty to the artist. A resale royalty right cannot be waived, transferred or otherwise disposed of by the artist, except in certain limited circumstances.
A royalty collection society will be appointed by the government to collect and distribute royalties on behalf of visual artists.
The government has indicated that it will monitor the scheme over the next five years to assess whether any amendments are required.