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WHEN THE ARTIST NO LONGER STARVES: The artist resale right IN THE UNITED KINGDOM AND THE UNITED STATES

MICHAEL NABORSCOMPARATIVE LAW SEMINAROCTOBER 13, 2014

United States ROYALTY SCHEME (books)Paid by the publisher, who determines an author's royalty rate, except in rare cases in which the author can demand high advances and royalties.Publishers advance an amount (part of the royalty) which can constitute the bulk of the authors total income plus whatever little flows from the "running royalty" stream. The author and the publisher can independently draw up the agreement that binds them or alongside an agent representing the author. Book-publishing Royalties - "Net" and "Retail" ComparedRetail BasisNet BasisCover Price15.0015.00Discount to Booksellers50%50%Wholesale Price, $7.507.50Printing Cost3.503.50Net Income,$4.004.00Royalty Rate20%20%Royalty Calculation0.20 x 150.20 x 4Royalty,$3.000.80

United States ROYALTY SCHEME (music)Composers (score), songwriters (lyrics) and writers of musical plays can own the exclusive copyright to created musicLicense it for performance independent of corporates. A musical composition obtains protection in copyright law immediate to its reduction to tangible form a score on paper or a taping; but it is not protected from infringed use unless registered with the copyright authorityCopyright Office in the United States, administered by the Library of Congress. No person or entity, other than the copyright owner, can use or employ the music for gain without obtaining a license from the composer/songwriter.Inherently, as copyright, it confers on its owner, a distinctive "bundle" of five exclusive rights:(a) to make copies of the songs through print or recordings(b) to distribute them to the public for profit(c) to the "public performance right"; live or through a recording(d) to create a derivative work to include elements of the original music; and(e) to "display" it (not very relevant in context).Where the score and the lyric of a composition are contributions of different persons, each of them is an equal owner of such rights.These exclusivities have led to the evolution of distinct commercial terminology used in the music industryRoyalties from "print rightsMechanical royalties from the recording of composed music on CDs and tapePerformance royalties Synch (for synchronization) royalties from using or adapting the musical score Digital rights from simulcasting, webcasting, streaming, downloading, and online "on-demand service".

Cindy sherman

Untitled Film still #21 (1/10)

Silver gelatin print8 x 101977-80

One print from this edition was sold out of her studio for $50 (1977)

This print sold for $200 to private collector via Metro Pictures (1980)

Sothebys New York fetched $746,500 USD at auction (2012)

Tracey emin

keep me safe (AP 1/2)

red neon sculpture12.5 x 35.252006

Sold by artist for 1,000 (2006)

Sothebys London fetched 60,000 GBP at auction (2014)

Transaction comparisonSOTHEBYS NEW YORKPurchase (Hammer) PriceBuyers Premium25% on the first $100,000 of the hammer price20% on the portion of hammer price above $100,000 up to $2 million12% on any amount above $2 millionNew York State Sales Tax (8.875%)SOTHEBYS LONDONPurchase (Hammer) PriceBuyers Premium25% on the first 50,000 of the hammer price20% on the portion of hammer price above 50,000 up to 1 million12% on any amount above 1 millionValue Added Tax (17.5%)Artist Resale Right (Droit de Suite)

Artist Resale Right (or Droit de Suite)European Unions Artists Resale Right Directive, Directive 2001/84/EC, of the European Parliament and of the Council of 27 September 2001 on the Resale Right for the Benefit of the Author of an Original Work or Art, 2001 O.J (L 272) 32-36.Adopted by the United KingdomLiving artists and artists who died within 70 years prior to the date of the sale are entitled to receive a resale royalty each time their art work is sold by an art market professional in the European Union or United Kingdom, subject to certain conditionsArtist must be citizen of country within the European Union or the United KingdomAmount is aggregate of the following, with a cap of 12,500 for each sale0 to 50,000 = 4% 50,000.01 to 200,000 = 3% 200,000.01 to 350,000 = 1% 350,000.01 to 500,000 = 0.5% Exceeding 500,000 = 0.25%

United States resale royalty

Structure of paperWhy the Artist Resale Right has not yet been implemented in the United StatesIntroductionBrief comparison and contrast of U.S. and U.K. royalty regimesDefinition of Artist Resale Right and history of its creation and implementationBegan in France in the early 1970sOnly became E.U. law in 2001What took so long? Why the delay?Examination of the two attempts to introduce legislation into U.S. LawLegislative historyCriticisms of it and how they disabled the process

Structure of paper (contd)Closer examination of criticisms levelled at the Artist Resale RightEconomic argumentMacroeconomic effect(s) on the Art MarketMicroeconomic effect on key player in the International Art Market, Sothebys Publicly traded company so records are easier to getPrivate connection to Sothebys via past educational endeavorLegal regime argumentPotential conflicts with previously extant U.K. lawPotential conflict with current copyright lawShow how the criticisms were largely unwarrantedEmpirical data about overall sales in the art market, specifically London and NYCEmpirical data regarding Sothebys London sales before and after implementation of E.U. Directive

Structure of paper (contd)ConclusionDemonstrate how implementation of Artist Resale Right in the United States is possibleNo economic disincentivizationNo loss of sales to other art market . . . there really is not another one to go to.Statutory and enforcement regime could easily fit within current copyright schemePlea for reconsideration to whomever is willing to listen

sourcesInternational copyright agreementsUniversal Copyright ConventionBerne Convention for the Protection of Literary and Artistic WorksE.U. and U.K statutes and regulationsDirective 2001/84/EC, of the European Parliament and of the Council of 27 September 2001 on the Resale Right for the Benefit of the Author of an Original Work or Art, 2001 O.J (L 272) 32-36.European Union ConstitutionU.S. statutesCopyright Act of 1976, 17 U.S.C. 101, et seq.Proposed federal legislation in re Artist Resale Right including legislative historiesArt market reportsSothebys financial statementsSecondary sourcesLaw review articlesOther scholarly works outside of law reviews and journals

The takeawayFairly certain that we are all aware of royalties and what they are on some basic level

Want you to understand that there is a gap in the protection afforded to the holders in copyright of works in fine art . . . the actual creators of the work are only allowed to benefit from the first sale of their work

Hope that you side with the artists who are almost unanimously in favor of this addition to the royalty regime currently in place

WHEN THE ARTIST NO LONGER STARVES: The artist resale right IN THE UNITED KINGDOM AND THE UNITED STATES

MICHAEL NABORSCOMPARATIVE LAW SEMINAROCTOBER 13, 2014

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