Art Law Report

Au Revoir, Droit de Suite—9th Circuit Narrows California Resale Royalty Act to a Single Year’s Sales

Posted by Nicholas O'Donnell on July 9, 2018 at 10:33 AM

The idea of moral rights continues to be a notable difference between European and American intellectual property rights with respect to visual arts. Last week’s decision by the U.S. Court of Appeals for the 9th Circuit in a case brought by artist Chuck Close and others addressing the California Resale Royalty Act (the CRRA) underscores those distinctions. In holding that the CRRA is mostly preempted by federal copyright law and thus can be applied to entitle artists to secondary royalties only for sales of art in a single calendar year—1977—the 9th Circuit affirmed the skepticism with which American law continues to regard anything other than classic copyright. Given the failure of efforts to pass national legislation to provide for resale royalties, this decision is probably the end of the line for the foreseeable future in the U.S. for droit de suite, the term of art used to describe the concept.

There is, for better or worse, clearly no political constituency for resale royalties in the U.S. As I told Law360, and as we’ve opined before about the Visual Artists Rights Act of 1990 (VARA), property rights are in many ways a quintessential American policy. We all reflected on the Declaration of Independence last week, and its proclamation of the primacy of Life, Liberty, and the Pursuit of Happiness—which revised John Locke’s famous statement that governments are instituted to secure “life, liberty, and property.” Copyright is and always will be a limitation on absolute ownership, but Americans guard those limitations jealously. There is little sign that will soon change.

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Topics: CRRA, Sotheby's, Christie's, eBay, Chuck Close, droit de suite, Visual Artists Rights Act of 1990, VARA, Declaration of Independence, Cal. Civ. Code § 986(a), Commerce Clause, U.S. Constitution, Dormant Commerce Clause, Preemption, Copyright Act of 1976, 1909 Copyright Act, Morseburg v. Baylon, Rep. Jerrold Nadler (D-NY), American Royalties Too Act, John Locke, Supremacy Clause, California Resale Royalty Act

California Resale Royalty Act Ruled Unconstitutional as to Out of State Sales, What Effect on the Market?

Posted by Nicholas O'Donnell on May 6, 2015 at 6:53 AM

In a decision long awaited by artists and auction houses in particular, the Ninth Circuit Court of Appeals has ruled that the California Resale Royalty Act of 1976 (CRA)—America’s only droit de suite—is unconstitutional top regulate any sales of art outside of California. The court concluded, however, that that portion of the law is severable from the rest, and let the regulation of in-California sales stand for further interpretation by a subsidiary panel of the appeals court. There are two likely aftereffects of this decision. Galleries and auction houses can put any concerns to rest about sales in New York in particular, but one has to wonder about the effect it will have on putting items for sale in California, which will effectively have a premium not present in other states. It also raises the possibility that the resulting piecemeal framework will motivate movement on the pending federal bill (the American Royalties Too (ART) Act of 2015) concerning resale royalties. Could this be the development that prompts movement in Congress?

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Topics: Legislation, Resale Royalties, Chuck Close, Supreme Court, Christie's, Cal. Civ. Code § 986(a), Dormant Commerce Clause, droit de suite, sales tax, Cal. Redev. Ass’n v. Matosantos, use tax, American Royalties Too (ART) Act of 2015, California Resale Royalty Act, Copyright, Ninth Circuit Court of Appeals, Sotheby's, eBay

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The Art Law Report provides timely updates and commentary on legal issues in the museum and visual arts communities.

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