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AAMD Argues Against Artists’ Royalties in Statement to Copyright Office; Hearing to Be Held Tuesday

Kimerly Rorschach, president, AAMD

Kimerly Rorschach, president, Association of Art Museum Directors

On Apr. 23, the U.S. Copyright Office will conduct a public hearing on the pros and cons of possible federal legislation to mandate artists’ resale royalties. In advance of the hearing, the Copyright Office invited statements from interested parties. Some 59 comments are posted here. Among them—an astonishing missive from the Association of Art Museum Directors, finding fault with the notion of granting artists the right to participate in the profits from resales of their work.

You can read about the specific issues that the Copyright Office wants speakers to address in the Federal Register announcement of the hearing. Perhaps fittingly, this gathering comes three days before World Intellectual Property Day.

AAMD’s Dec. 5 letter (not posted on the association’s website), signed by its president, Seattle Art Museum director Kimerly Rorschach, begins innocuously enough:

Museums have an interest in ensuring that all living artists, whether at the beginning of their careers or already well established, are fairly compensated and rewarded for their artistic endeavors. Artists and museums share an important relationship that is crucial to ensuring the public’s continued access to and enrichment from works of art.

Then comes the unexpected royalty resistance (with my own rejoinders in brackets):

Museums believe in fostering artists’ careers and ensuring that artists can make a living from their creative efforts. There is a fair amount of empirical evidence, however, that resale royalty systems ultimately do little to help living [emphasis added] artists….[Is the fact that royalties also help artists’ heirs undesirable?]….

The AAMD is concerned that the royalty, contrary to its intended purpose, may actually undermine the economic position of many living artists, especially artists at the start of their careers. As a matter of economics, if a buyer knows that he or she has to pay a share of any profits from later sales, then the buyer is likely to pay less in the initial transaction. [Many, if not most, collectors buy art for the love of it, not with an eye to maximizing their take if they later decide to sell.]

AAMD also observes that the “validation and reputational enhancement” from a museum’s acquisition of a young or emerging artists “often translate into financial success that in the long run exceeds any resale royalty an artist would receive.” Does that (and the other economic boosts that AAMD says accrue to artists whom museums commission, exhibit and publish) negate the appropropriateness of resale royalties?

These are the kind of slippery arguments one expects to hear from dealers and auction houses, not from nonprofit museums that profess to have “an interest in ensuring that all living artists…are fairly compensated and rewarded for their artistic endeavors.” (Two joint statements submitted to the Copyright Office by Christie’s and Sotheby’s are here and here.)

AAMD also voiced specific objections to the Equity for Visual Artists Act, some of which I agree with (as discussed in this previous post). Surprisingly, AAMD even takes issue with a provision in the bill that would direct a share of resale royalties to be distributed as purchase grants for museums. It objects to the grants mostly on procedural grounds, but also frets that such grants might be used as an excuse to reduce other forms of federal art funding.

A better bill can (and should) be written, and should apply to dealers as well as auction houses. That said, artists’ resale royalties are an idea whose time has come. As noted by the Copyright Office in its above-linked hearing announcement, they already exist in Europe and are being considered in China, through pending legislation. It’s time we caught up. It’s time to extend royalty benefits, long enjoyed by creators of literature and music, to the visual arts.

Speaking of which, what ever happened to the lawsuit brought by several artists and artists’ estates seeking compensatory and punitive damages, as well as attorneys’ fees, from Sotheby’s and Christie’s under California’s Resale Royalty Act?

In materials prepared for the American Law Institute’s recent conference on Legal Issues in Museum Administration (which I attended via webcast), Stephen Clark, vice president and general counsel for the Getty Trust, provided this update (along with Joshua Keesan, a Los Angeles lawyer):

In May 2012, the [California federal] court dismissed the cases and struck down the CRRA [California Resale Royalty Act] as unconstitutional. Plaintiffs Sam Francis Foundation and Estate of Robert Graham have appealed this decision to the Ninth Circuit, and the appellate court will likely hear the case later this year.

The Copyright Office’s public hearing will be held Tuesday, 1-5 p.m., in Hearing Room LM-408, Madison Building, Library of Congress, Washington. Seating for non-participating observers is limited, to be filled on a first-come, first-served basis.

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