Digest No. 1619
Background
The Bill creates a property right for an artist and his or her successors over the artist's artistic creations for a period expiring (broadly) 50 years after the death of the artist. During that time the holder of the resale right would be entitled to a royalty payment whose collection would be the responsibility of a collecting agency.
The resale right " ... acknowledges the unique nature of artistic work, where the value is primarily in the one-off original artistic work and not in reproductions or repeated use. It is an economic right and provides an added incentive to create and the ability to derive ongoing benefit from this creation. A resale right is also a moral right recognising the continuing relationship between the creator and his or her artistic work"
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"Artists currently derive limited advantage from copyright legislation as it [only] deals with reproductions or repeated use of a work. The introduction of a resale right for artists through an amendment to the Copyright Act 1994 recognises the intellectual, moral, and economic rights artists have in their artistic works, irrespective of who owns the copyright to those works"
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Main Provisions
Resale right
The Bill provides that an artist has a right to be paid a resale royalty on every resale of an artistic work created by that artist (a resale right) even if the artist was not the first owner of any copyright in the work (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204C(1) and (3)(a)).
Who is an "artist'?
The Bill defines the term "artist" as "the author who creates and artistic work" and "in relation to a computer-generated work, the person by whom the arrangements necessary for the creation of the artistic work are undertaken" (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204A, definition of "artist").
What is an "artistic work"?
The Bill defines the term "artistic work" as an "original work" that is:
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"a graphic work, photograph, sculpture, collage, or model, irrespective of artistic quality";
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a work of "artistic craftsmanship" not falling within the above;
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"an artistic work that is one of a limited edition of artistic works created by the artist or under the artist's authority"; but
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not "a work of architecture (being a building or model for a building)" or "a layout design or integrated circuit
within the meaning of section 2 of the Layout Designs Act 1994" (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204A, definition of "artistic work").
What is a resale?
The Bill defines the term "resale" as "the sale of an artistic work other than the first transfer of ownership by the artist". However, a sale may only be treated as a resale if:
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the buyer or the seller or, if the sale takes place through an agent, the agent of the buyer or seller is acting in the course of his or her business of dealing in artistic works; and
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the selling price is not less than the amount prescribed by regulations (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204A (definition of "resale") and New Section 204D ("further meaning of resale")).
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Comment
The Bill appears to be aimed at applying to art-dealing businesses only and exempts private one-off sales of artistic works.
What is a first transfer of ownership by the artist"?
The Bill defines the term "first transfer of ownership by the artist" as the first disposition of an artistic work, whether by sale, gift, or for any other kind of consideration, including:
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"transmission of the work by testamentary disposition or in accordance with the rules of intestate succession"; and
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"disposal of the work by the artist's personal representative for the purpose of administering the estate of the artist"; and
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"disposal of the work by the Assignee for the purpose of realising the artist's estate, but not the vesting of the work in the Assignee if the artist is adjudicated bankrupt (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204A, definition of "first transfer of ownership by the artist").
Artist or other holder of resale right must meet certain requirement
The Bill provides that a resale right is held only by a person who, at the time when a contract for resale of the artistic work is completed, is a natural person who is a New Zealand citizen or a resident of New Zealand or is a national of a "reciprocating country". In the case of a deceased artist, the above conditions must be met by that artist at the time of the artists death. This does not limit the application of the law relating to testamentary dispositions (Part 1, Clause 4, inserting New Part 9A into the Act, New Sections 204F and 204J).
It is not clear how this provision relates to trusts other than in a testamentary context.
Duration of resale right?
The Bill provides that a resale right expires:
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"at the end of the period of 50 years from the end of the calendar year in which the artist died; or
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"in the case of an artistic work that is computer-generated, at the end of the period of 50 years from the end of the year in which the work was created; or
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"in the case of an artistic work created by an unknown artist, at the end of the period of 50 years from the end of the calendar year in which the work is first made available to the public, including by exhibition in public" (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204H(1)).
Joint artists
Special provisions are provided in relation to artistic works which are the work of joint artists. The artists each have resale rights held in common in equal shares (unless they agree otherwise). The resale right endures until 50 years of the last of them to die (Part 1, Clause 4, inserting New Part 9A into the Act, New Sections 204G and 204H (2)).
A resale right may not be alienated
The Bill provides that a resale right may not be assigned, waived or charged (i.e. mortgaged) (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204I).
Resale royalty payments
The Bill provides that the resale royalty payable in respect of a resale right is calculated on the basis of the resale price of the artistic work (exclusive of Goods and Services Tax) and the rate of the resale royalty set by regulations. Liability for payment of the royalty reposes, in the: the seller; the agent for the seller; (if no seller's agent) the agent for the buyer; or (if no agents), the buyer (Part 1, Clause 4, inserting New Part 9A into the Act, New Sections 204K and 204L).
Management of collection of resale royalties
The Bill provides the "collecting agency" must manage the resale right for and on behalf of the holder of the right, whether or not the holder gives consent (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204A (definition of "collecting agency"), New Sections 204M-204O, and New Section 204R(a) (regulations appointing the sole collecting agency)).
Enforcement
The Bill provides for the collecting agency to enforce the provisions by application to "a court of competent jurisdiction". The Court may make orders that necessary information be provided (if that is sought), payment of any royalties owing, and such orders as are appropriate for an infringement of copyright (Part 1, Clause 4, inserting New Part 9A into the Act, New Sections 204P and 204Q).
Regulations
The Bill provides for the making of regulations in relation to the appointment of the sole collecting agency, rules for its conduct and also prescribing the rate of the resale royalty and the monetary value above which a resale price is subject to a resale royalty. Regulations may also be made providing for such matters as are contemplated by, or necessary for giving full effect to the provisions and are necessary for its due administration (Part 1, Clause 4, inserting New Part 9A into the Act, New Section 204R).
