Although there are no definitive signs yet of likely change, the question of secondary royalties for visual artists remains far from resolved. The most comprehensive effort to date, the California Resale Royalties Act was declared unconstitutional in 2012 by the U.S. District Court for the Central District of California, in lawsuit brought by Chuck Close and others against Christie’s, eBay, and Sotheby’s. That decision is on appeal in the Ninth Circuit.
On February 26, 2014, Representative Jerrold Nadler (D-NY) introduced the “American Royalties Too Act”—House Resolution 4103. There was also an “American Royalties Too Act” introduced in the U.S. Senate by Senator Tammy Baldwin (D-WI) on the same day. Early reports are that the major auction houses are strongly opposed and are lobbying accordingly.
Rep. Nadler introduced a similar bill in 2011, which was never passed. In the interim, the United States Copyright Office assembled testimony, and then issued a report on their updated analysis of resale royalties last December. This report concluded, most relevantly, that there was “no evidence to conclusively establish that [establishing resale royalties] would harm the U.S. visual market.” The Report thus made the 10 recommendations for resale royalty legislation. Nadler’s bill incorporates most of the report’s recommendations, some of which changed substantially material terms from the previously-proposed legislation. Below is a side-by-side comparison of the most material terms of the two bills.
In the meantime, handicapping legislative success is not something we’ll attempt here, but stay tuned for committee and other updates.
