AMI and ASIP Support a Resale Royalty Right for U.S. Visual Artists

On December 1, 2012, the American Society of Illustrators Partnership (ASIP) filed comments with the U.S. Copyright Office in response to their Notice of Inquiry about a federal Resale Royalty Right in the United States. ASIP is a coalition of 12 professional illustration societies of which the Association of Medical Illustrators is a member.

Comments of the American Society of Illustrators Partnership

The American Society of Illustrators Partnership (ASIP) respectfully submit comments in response to the Copyright Office’s Notice of Inquiry published in the Federal Register on September 19, 2012. We appreciate the opportunity to submit comments based on our direct observations and experiences as the potential beneficiaries of the resale royalty right.

The American Society of Illustrators Partnership is a coalition of 12 professional illustration societies representing over 4,500 of the most prolific and widely published illustrators in the world.

Recognizing the long overdue need for a collective rights administration for American illustrators, in 2001 the Illustrators’ Partnership of America founded the IPA Reprographics Coalition. American illustrators united under the coalition to protect our copyrights, promote the proper licensing of our works, establish transparent accountability of our secondary royalty streams, and foster the implementation of appropriate licensing methods to assure that American illustrators are properly represented and remunerated. In October 2007 the Coalition formalized as a nonprofit corporation under the name of the American Society of Illustrators Partnership.

The members of ASIP support legislation for implementation of a federal resale royalty right, with half of the royalties collected to be distributed to the artist and half used to promote the interests of living artists by subsidizing museum purchases of contemporary works. We welcome and applaud legislation to encourage the establishment of a collective licensing mechanism to administer the royalty payments as the most efficient and accountable means to carry out the legislative mandate.

American Illustrators and the Resale Royalty Right

When C.F. Payne, Illustrator and Founding Board Member of the Illustrators’ Partnership interviewed author and journalist Tom Wolfe for the Illustrators’ News, Wolfe remarked:

“I feel very comfortable predicting that art historians 50 years from now, assuming we’re in a world kind enough to indulge art historians, will look back upon illustrators as the great American artists of the second half of the 20th century.”

The time is right for the US to implement the resale royalty right for its artists. The sale of American illustration paintings and drawings is an emerging market attracting sophisticated collectors worldwide. American illustration is evocative of a unique type of American artistry as well as treasured Americana.

One auction house alone has reported more than $40 Million in sales of American illustration in the last five years.¹ Auction prices are on an upward trend as this market expands. Bringing the US into compliance with Article 14ter of the Berne Convention will finally bring equity to these artists for the value their talents have brought to the US art market and abroad. Article 14ter reciprocity would allow American illustrators to benefit from the market for American art in any of the 46 countries that have implemented the resale royalty, including the major art markets of the UK and the European Union. Likewise, overseas artists would finally begin to receive resale royalties when their works are resold in the US.

Illustrators are at a well-known disadvantage in initial leverage for the commission of illustration created for publication, and they are at a distinct disadvantage for pricing the sale of their originals. In some cases, the original art was never sold, but simply retained by publishers, advertisers and printing houses.²

The resale royalty right restores a measure of equity by allowing the artist to share in the increased value of his or her works. It also recognizes the ongoing stake an artist has in the economic value of their work. Royalties received within an artist’s lifetime help sustain a career to continue creating new works. A lifetime spent creating a body of work also means the burden of creating and maintaining an archive. This burden is inevitably passed onto the artist’s estate. A resale royalty stream can help support the considerable work that heirs contribute to the creation and maintenance of an art market, including preservation and cataloguing, promotion, and establishing provenance and authenticity.

But, not least of all, a resale royalty income produced by the ongoing and increasing value of desired works is the artist’s rightful economic legacy. In his article,A Right Deferred: Resale Royalties for Visual Artists, Charles Chen writes “[T]he resale royalty is consistent with American legal traditions because it also focuses on promoting creativity – ‘the progress of Science and the useful Arts.’ See U.S. CONST. art. I. §8, cl. 8.”³ Shira Perlmutter noted in Resale Royalties for Artists: An Analysis of the Register of Copyright’s Report, “Copyright law is and always has been considerably more disadvantageous to visual artists. Artists therefore have a good claim to some form of remedy . . . artists feel that even small amounts paid occasionally are worthwhile both psychologically and financially.”⁴

Henry T. Hopkins, distinguished museum director and educator who played a leading role in establishing Los Angeles’ art scene, was more direct when he testified before the Senate Subcommittee on Patents, Copyrights and Trademarks in December 1987, stating “Investors continue to profit directly from the creation of the artist. It is unfair that the artist be limited to proceeds from the original transaction while someone else reaps financial rewards from the product of an artist’s hand on into infinity.”⁵

This is not an Abstract discussion for us.

Even with a brief survey, we count among our members several second-generation illustrators that are heirs to a parent’s works being resold at auction, including:

• Matthew Joseph Peak, Illustrator, son and heir of Bob Peak, Illustrator
• Zina Saunders, Illustrator, daughter and heir of Norm Saunders, Illustrator
• Leslie Cober-Gentry, Illustrator, daughter and heir of Alan Cober, Illustrator

And as we write these comments we are mindful of several of our contemporary colleagues’ estates, including:

• Gerald P. Hodge, (d. 2012) renowned scientific and medical illustrator
• David Grove, (d. 2012) renowned book, magazine, movie and advertising illustrator
• Dugald Stermer, (d. 2011) renowned flora, fauna and social issues illustrator
• Robert T. McCall, (d. 2010) renowned NASA space artist and muralist
• Robert Heindel, (d. 2005) internationally renowned dance and opera artist
• Thomas B. Allen, (d. 2004) expressive visual journalist, renowned for album covers
• Bernie Fuchs, (d. 2003) renowned advertising, magazine and portraiture artist
• R. G. Smith, (d. 2001) internationally renowned aviation artist
• Charles M. Schulz, (d. 2000) creator of Charlie Brown & Peanuts

Please see Appendix 1 for a list of active supporters of the resale royalty right.

Selected Examples

In 1943, film producer David O. Selznick commissioned Norman Rockwell to create the poster art for “The Song of Bernadette,” starring Jennifer Jones as the Maid of Lourdes. Years later, Rockwell was quoted by author Arthur Guptill in his monograph, Norman Rockwell, Illustrator, as saying:

Nothing else I ever painted was reproduced in so many ways. In addition to its being run in magazines, newspapers, and on theatre posters, I was told that it covered the entire wall of one eight-story building.”⁶

The painting’s location was unknown for a number of years. It was later discovered in the private collection of the film’s producer, William Perlberg. Ownership subsequently passed to the Mount Saint Mary’s Academy in Los Angeles; thence, to the present owner. In 2005, the original was put up for auction at Heritage Galleries with an estimate of $200,000. The buyer paid $478,000.^{7 8}

Norman Rockwell’s “Breaking Home Ties” was voted the public’s second favorite of all of his works. It was painted for the September 25, 1954 cover of The Saturday Evening Post. It was owned for years by his neighbor in Arlington, VT who was the cartoonist who drew the “Henry” comic strip in the 1940s. He purchased the painting for $900 in 1960. In 2006, his estate put it up for auction at Sotheby’s. It sold for $15.4 Million.⁹

The previous auction record for a Rockwell was $9.2 Million at Sotheby’s in May, 2006 for “Homecoming Marine” painted for the October 13, 1945 cover of The Saturday Evening Post.¹⁰

Examples abound of original art created for publication in newspapers, books, magazines, advertisements, calendars and comic strips now selling at auction for 1,000% –100,000% more than the commission price to create the art for publication rights. Please see Appendix 2 for more examples.

Comments on Proposed Legislation

We would like to commend the intent, and the ethical and moral components, of the proposed legislation, Equity for Visual Artists Act of 2011 (EVAA), S.2000 and H.R. 3688 respectively, and confirm the legislation has our full endorsement. We would respectfully add some further suggestions.

Qualifying a Visual Arts’ Collecting SocietyAmerican illustrators have suffered greatly from the lack of a collective rights administration. Millions of dollars of royalties generated by the re-publication of our works, both in the US and abroad, have been averted from rightsholders. This has contributed to a substantial economic loss to American fine artists, illustrators, photographers and writers. The continued disarray has prevented published visual artists from the full enjoyment and exercise of their copyrights, and is fully inconsistent with the intent of authorial rights granted by US Copyright law.American illustrators have suffered greatly from the lack of a collective rights administration. Millions of dollars of royalties generated by the re-publication of our works, both in the US and abroad, have been averted from rightsholders. This has contributed to a substantial economic loss to American fine artists, illustrators, photographers and writers. The continued disarray has prevented published visual artists from the full enjoyment and exercise of their copyrights, and is fully inconsistent with the intent of authorial rights granted by US Copyright law.

As Mary Beth Peters, Register of Copyrights, wrote in a letter to Congressman James P. McGovern when he requested her views onNew York Times v. Tasini,“Although, in the words of Barbara Ringer, former Register and a chief architect of the 1976 Act, the Act represented ‘a break with the two-hundred-year-old tradition that has identified copyright more closely with the publisher than with the author’ and focused more on safeguarding the rights of authors, freelance authors have experienced significant economic loss since its enactment. This is due not only to their unequal bargaining power, but also to the digital revolution that has given publishers opportunities to exploit authors’ works in ways barely foreseen in 1976.[emphasis added] ¹¹

In her New York Times v. Tasiniopinion, Supreme Court Justice Ruth Bader Ginsburg dismissed the publishers’ warning that a ruling adverse to them would have “devastating” consequences for the historical record. “The parties,” she wrote, “may enter into an agreement allowing continued electronic reproduction of the Authors’ works; they, and if necessary the courts and Congress, may draw on numerous models for distributing copyrighted works and remunerating authors for their distribution.” She further stated there was “no basis for this Court to shrink authorial rights created by Congress." [emphasis added] ¹²

The American Society of Illustrators Partnership was born from this inequity and has sought opportunities to implement licensing models to conform to the digital environment. Because of the vacuum created by these events, its founders suffered a baseless lawsuit in New York State Supreme Court, dismissed in its entirety as having no merit after nearly three years of prolonged litigation.Please see Appendix 3 for a case summary.

Because of all these reasons, we welcome the proposed legislative directive to the Register of Copyrights to develop qualifying criteria and issue regulations governing the designation and oversight of visual artists’ collecting societies. We support this process, and urge that it proceed with the full input of rightsholders and our experiences.

No Delay of Implementation of Resale Right

However, we also urge that the implementation of the resale right royalty should not be delayed by the regulatory process. There are already two qualified and functioning visual art societies to administer a newly implemented resale royalty, and at least one of them is amenable to supporting our members until such time that ASIP can be self-supporting. ASIP members have already designated Artists Rights Society as their collecting society for the administration of the resale right royalty. We have had a long and mutually beneficial relationship with the Artists Rights Society.

It has already been more than a decade since the courts recognized the damage to authorial secondary rights. Reprographic royalty income has, in fact, been lost to visual authors for more than 30 years. Yet, it is a secondary royalty stream that continues to expand in both value and marketshare.¹³ The legislative implementation of the federal resale royalty has been in abeyance since the US joined Berne in 1983, and that has resulted in a generation of potential resale royalties lost to artists and their heirs in the US and around the world.

There can be no doubt that the adoption of a federal resale royalty regime would further incentivize and protect visual authors. The direct beneficiaries of financially productive works would share in the equity of the value they have created. The additional 50% of the royalty would bring much needed capital into the living visual author community, and foster living talent at a level never experienced before in the US.¹⁴

Acquisition of Works by Living Artists We applaud the 50% share of the royalties placed into an escrow account to support US nonprofit museums in their future purchases of visual art created by living artists domiciled in the US. We would like to make the further recommendation that those royalties be apportioned according to a collection ratio by genre of fine art, illustration and photography. For example, if 20% of the collected royalties placed in escrow have been earned by the auction of American illustration, then 20% of the royalties would be designated for a non-profit museum acquisition of a work(s) of living American illustrators. Please see Appendix 4 for a partial list of accredited non-profit museums that acquire American illustration works.

Contractual Considerations

Contract law has a long history of abrogating US Copyright law to the deteriment of the creator. What good will a resale royalty right be if gallery contracts, publishing contracts, etc. are rewritten the day the law is passed to require the surrender of the resale royalty right as a condition of a commission or first sale? We urge caution to also expect the appearance of retroactive conveyance of the resale right in contracts. Many contracts encountered by visual artists are take-it-or-leave-it. The unequal bargaining power of the American visual artist is not trivial.

We highly recommend the resale royalty right be inalienable, as designated in (1) Article 14, the Berne Convention:

BERNE CONVENTION FOR THE PROTECTION OF LITERARY AND ARTISTIC WORKS (Paris Text 1971) Article 14ter

1. The author, or after his death the persons or institutions authorized by national legislation, shall, with respect to original works of art and original manuscripts of writers and composers,enjoy the inalienable right to an interest in any sale of the work subsequent to the first transfer by the author of the work. [emphasis added]
2. he protection provided by the preceding paragraph may be claimed in a country of the Union only if legislation in the country to which the author belongs so permits, and to the extent permitted by the country where this protection is claimed.
3. The procedure for collection and the amounts shall be matters for determination by national legislation.¹⁵

Duration of term

We believe the duration of the term for the resale royalty right should be concurrent with the copyright term of life of the author plus seventy years. If the point of the royalty is to return equity to the artist – equity that often grows with compounded interest after death because no new works will ever be created – why abbreviate the potential for the artist or heirs to receive the equity just when it begins to significantly grow?

Shortening the duration of the term would also significantly starve the 50% share of the royalty that is dedicated to fostering living talent by encouraging museum acquisitions. The royalty pool subsidy for living talent will achieve its fullest potential by the funding of the appreciated works that are actively creating high value in the art market for collectors, dealers and investors.

Conclusion

We concur with Chen that “The United States has put off implementing a resale royalty for years, and federalizing the resale royalty would help the United States comply with the International Berne Convention and continue dominating the international art market.” And we concur with Bruce Lehman, Esq., that “In other cases Congress has acted to assure that American creators would be able to benefit from reciprocity with European nations when new benefits were granted by the E.U. to its own rights holders. . . [it] is now time for the Congress to reconsider the unfinished business of the Visual Artists Rights Act of 1990.”¹⁶

As previously noted, in the case of illustrators, in many instances the original art was never sold by the artist, but passed into the hands of publishers, advertisers and others through the production process. As more publishing archives are mined for illustrators’ original works of art, the market for published illustration originals will continue to grow. In fact, this Thursday, December 6th 2012, “232 photos, paintings and drawings that helped to turn National Geographic into an international brand will be auctioned at Christie's in New York to celebrate the society's 125-year anniversary in January. . . The works for sale are part of an archive of 11.5 million images that were commissioned or purchased by the society and are stored in a giant underground library at National Geographic’s headquarters in Washington, D.C. This is the first time that the works have been put up for auction . . . The most expensive item for auction is a painting by Newell Convers Wyeth (father of Andrew), who had been commissioned to paint murals at the society’s headquarters that are displayed to this day. His “The Duel on the Beach,” which depicts a dramatic pirate swordfight, ran in the 1999 issue and is priced between $800,000 and $1.2 million.” ¹⁷

Contemporary illustrators today are creating the Americana of tomorrow, and some, like Robert Crumb, are experiencing the market exchange of the growing value of his original art occurring in his lifetime, and enriching only others. On behalf of the American illustration community we thank you for taking up the effort to pass this very needed legislation, and taking measures to promote a healthy copyright system that incentivizes and protects visual authors.

Respectfully submitted,

Cynthia Turner Co-Chair, American Society of Illustrators Partnership

Brad Holland Co-Chair, American Society of Illustrators Partnership

www.asip-repro.org