After a Yearslong Battle, a US Court Concludes That Artists Aren’t Entitled to Royalties on Works Resold at Auction

Artists hoping to get paid when their work sells for millions of dollars at auction may be out of luck—at least in the US.

On Friday, the Ninth Circuit of the US Appeals Court essentially struck down a California state law that required fine artists to be paid royalties when their work is resold. The three-judge panel said that the law, called the 1977 California Resale Royalties Act (CRRA), is pre-empted by the federal Copyright Act.

The decision brings to an end a seven-year legal battle over resale royalties, which offer visual artists a piece of the profits when their works are resold by galleries or at auction. In a now-apocryphal tale, the debate over royalties is said to have begun when the artist Robert Rauschenbergpunched collector Robert Scull after he made a hefty profit selling one of his works at auction. Rauschenberg would go on to advocate for California to adopt the Resale Royalties Act, the only law of its kind in the US.

Under the CRRA, artists were entitled to five percent of the resale price of their artwork—under certain circumstances. The law applied only to works sold in California or sold by a California resident. Some argued that the law unfairly constrained California’s art market.

The latest ruling all but nullifies the law by limiting its scope to a one-year window. Now, only works resold from January 1, 1977, to January 1, 1978, when the Copyright Act became effective, are eligible for the royalty payment. The court ruled that royalty claims made after January 1, 1978 “were expressly pre-empted ” by the Copyright Act—which does not recognize an artist’s right to resale royalties. Read more

2018-10-29T09:40:34+00:00