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Artists Return to Royalty Battle in 9th Circuit

By William Vogeler, Esq. on April 12, 2018 6:57 AM

Angrily, an artist shoved and yelled at the man who had bought his painting.

Robert Rauschenberg was upset because the buyer later sold it at auction for nearly 10,000 percent more than he paid. "I didn't work so hard for you to make that profit!" the artist famously declared.

The incident inspired the California Resale Royalties Act, which requires sellers to pay visual artists five percent of any profit from resale. The artists are suing for those payments in a case before the U.S. Ninth Circuit Court of Appeals -- again.

Droit de Suite

In Europe, the resale royalty is known as "le droit de suite." It originated in France, but Americans don't speak that language.

U.S. copyright law has something else called "the first sale doctrine." Codified in 17 U.S.C. Section 109, it permits the owner to sell without regard to the creator's rights.

In arguments at the Ninth Circuit, artists' attorney Michael Bowse tried to get around it. Judge Paul Watford understood, but apparently was not persuaded.

"I think it hurts your position," Watford said. "Seems to me if the principle holds, the California law can't sit with that principle."

Once Pre-empted

At the trial court two years ago, Judge Michael Fitzgerald said the federal law pre-empted the state law. The resale act applies to sales in California and to sellers in California.

Visual artists say that Sotheby's and Christie's, which are in the business of selling fine art, haven't followed the resale act for years. In their complaint, they allege the auction houses "deliberately concealed" information about sales to avoid paying the artists.

The Ninth Circuit has heard all this before. In 2015, the en banc court said one part of the California law was unconstitutional. Fitzgerald then ruled against the artists, prompting another appeal.

They want the royalties, interest and punitive damages.

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