On Tuesday, Congressman Jerrold Nadler (NY-10), the Ranking Member of the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet, delivered an opening statement at the subcommittee’s hearing of “Moral Rights, Termination Rights, Resale Royalty, and Copyright Term.” Congressman Nadler introduced the American Royalties Too (ART) Act, which will be discussed at the hearing, in order to ensure visual artists are compensated when their original artwork is resold.  His legislation would bring fairness to American artists who, unlike their fellow visual artists in 70 countries, do not receive any compensation when their works are resold at public auction.

“I firmly believe that the time has come for us to establish a resale royalty right here in the United States.  By adopting a resale royalty, the United States would join the rest of the world in recognizing this important right.  The ART act would ensure that American artists also benefit whenever and wherever their works are sold, whether in New York, London, or Paris,” said Congressman Jerrold Nadler (D-NY). “I thank Chairman Coble and Chairman Goodlatte for including this issue as part of the Subcommittee’s review of the Copyright Act.”

The following is the full text of Congressman Nadler’s opening statement (as prepared for delivery):

          "Today we consider a broad range of existing legal protections for artists and creators, including the moral rights of attribution and integrity, the right to terminate a transfer or license of one’s works, and the copyright term.  Congress has taken some steps to address these issues, and I welcome this opportunity to hear from our witnesses about how our current laws are working and what, if any, changes might be necessary and appropriate.

          "I also welcome this chance to examine resale royalties for visual artists.  To date, Congress has failed to adopt a resale royalty right, which would grant visual artists a percentage of the proceeds each time their work is resold.  Unlike other artists – including, for example, songwriters and performing artists who may receive some royalties whenever their works are reproduced or performed – our visual artists currently benefit only from the original sale of their artwork.  This means that the artist receives no part of the long-term financial success of a work.  For example, if a young artist sells a work of art for $500 at the beginning of his or her career, and the same work is later sold for $50,000, the original artist gets nothing.  It is the purchaser, not the artist, who benefits whenever the value of the artist’s work increases.

          "The Berne Convention, to which the United States is a signatory, makes adoption of the resale royalty right optional, but does not allow artists in any country that fails to adopt this right to benefit from resale royalties in any other country.  Because we do not provide this right, U.S. artists are prevented from recovering any royalties generated from the resale of their works in countries that have resale rights.

          "Seventy other countries now provide this right, including the entire European Union.     

          "Concerned about this lack of fairness for American artists, I have introduced a bill – H.R. 4103, the American Royalties Too (or ART) Act – to correct this deficiency, and injustice, in the law.  The ART Act provides for a resale royalty of 5 percent to be paid to the artist for every work of visual art sold for more than $5,000 at public auction.  The royalty would be capped at $35,000 for works of art that sell for more than $700,000.  The royalty right is limited to works of fine art that are not created for the purpose of mass reproduction.  Covered artworks include paintings, drawings, prints, sculpture, and photographs in the original embodiment or in a limited edition.  Small auction houses with annual sales of less than $1 million are exempt. 

          "I firmly believe that the time has come for us to establish a resale royalty right here in the United States.  I am not alone in this belief.  The national arts advocacy organization Americans for the Arts supports this legislation.  So does the Visual Artists’ Rights Coalition (VARC), which includes the Artists Rights Society, the Visual Artists and Galleries Association, the American Society of Illustrators Partnership, the National Cartoonists Society, the Association of American Editorial Cartoonists, and the Association of Medical Illustrators, among others.

          "The United States Copyright Office, which once opposed adopting a resale royalty right, also now supports “Congressional consideration of a resale royalty right, or droit de suite, which would give artists a percentage of the amount paid for a work each time it is resold by another party.”  In its report in December of last year – Resale Royalties:  An Updated Analysis – the Copyright Office observed that visual artists operate at a disadvantage relative to other artists.  It also noted that many more countries had adopted resale royalty laws since its 1992 report recommending against adoption of this right, and that the adverse market effects it feared might result from resale royalty laws have not materialized. 

          "I welcome and look forward to hearing more from Karyn Claggett, Associate Register of Copyrights and Director of Policy and International Affairs, who is testifying on resale royalty on behalf of the Copyright Office at the hearing today.

          "By adopting a resale royalty, the United States would join the rest of the world in recognizing this important right.  And because these other countries have reciprocal agreements, they would then pay U.S. artists for works resold in their countries.  This would ensure that, in addition to resale royalties for works resold in this country, American artists would also benefit whenever and wherever their works are sold, whether in New York, London, or Paris.

          "Serious consideration of a resale royalty right is long overdue, and I thank Chairman Coble and Chairman Goodlatte for including this issue as part of the Subcommittee’s review of the Copyright Act. 

          "With that, I look forward to hearing from our witnesses and yield back the balance of my time."