VANSA Statement - Copyright Dispute between DALRO and Auction Houses

VANSA statement on the present dispute between DALRO and various auction houses

Summary
VANSA has noted with concern recent media reports concerning the dispute between the Dramatic, Artistic and Literary Rights Organisation (DALRO) and various auction houses. The present dispute revolves around the fact that DALRO – the only rights management organisation in South Africa which presently deals with the licensing of copyright on behalf of visual artists – has over the past year started to require, in terms of the South African Copyright Act, that auction houses seek permission for, and pay for, the right to reproduce the work of artists that DALRO represents. The assertion of these rights with the auction houses has principally been in relation to the media advertisements and on-line and print catalogues/prospectuses that they produce to advertise upcoming auctions. The auction houses – some of which are complying and others of which are not – have countered with a variety of reasons as to why they should not pay.

In summary, our position is as follows:

  1. We believe that collective rights management for artists is an inevitable and necessary part of the process of the ongoing professionalising of the visual arts sector in South Africa, as has taken place in other parts of the creative industries in South Africa, and in the visual arts in the rest of the world. We note that at present DALRO is the only organisation performing this function and that in the absence of any other organisation stepping forward to do so, there should be constructive engagement on the part of the sector with these efforts.
  2. A system of rights management can only be effective for producers and users if there is a critical mass of artists mandating a rights management organisation. We encourage those artists/estates for whom such a mandate would be meaningful to mandate DALRO to license these rights on their behalf. We note that this mandate will primarily be meaningful where there is a likelihood that a given artist’s work will be reproduced by others, and for those artists who wish to exercise some level of control over the use, circulation and/or adaptation of their creative work. We encourage artists generally to exercise informed choice on how they seek to manage their copyright, whether through collective administration by DALRO or through alternate mechanisms such as creative commons licensing or stock photographic agencies.
  3. We recommend that all stakeholders should lobby for legislative review with a view to the introduction of a form of the artists resale right. We also recommend that, should the resale right be introduced, that serious consideration be given to limitations being placed on the exercise of copyright in relation to the marketing activities of art market professionals and auction houses, in a way that would simultaneously bring our legislation in line with international practice in this area and make this legislative framework more relevant and responsive to local circumstances and conditions.
  4. In the absence of resale rights legislation being in place in South Africa, we believe that the payment of royalties for the reproduction of artists works in auction house catalogues and other contexts encompassed by the Copyright Act as it stands should be treated as mandatory.
  5. We recommend that in the context of the present dispute, specific rates and schedules for payment should be subject to independent mediation between DALRO and the users of artists work, with independent opinion being solicited on the reasonableness of these rates with reference both to international practice in this area, and to the specific context of the South African visual arts economy. Such rates and schedules should be updated at reasonable intervals by DALRO in consultation with rights-holders and organised user groups (such as auction houses).
  6. Finally, we make specific recommendations pertaining to the need for these rights to be managed and administered – in both perception and reality - in a manner which is fair, transparent and is informed by the active and organised engagement of both rights-holders and users in the process.

 

1. Preamble and Context

The organisation has noted a number of media reports (principally, in Beeld, the Financial Mail and the SA Art Times) concerning the current dispute between DALRO and various auction houses. VANSA has undertaken extensive research, consultation and awareness-raising around the application of copyright law to the visual arts in South Africa over the past three years. Given the present dispute, the organisation feels that it is necessary at this juncture to outline a clear position on this issue.

It is an issue that the organisation has been engaged with since 2010, when we convened a public seminar on this matter with Owen Dean, the Anton Mostert Chair for Intellectual Property at the University of Stellenbosch. Additionally, we have actively promoted the idea that DALRO should extend its licensing functions in a more active way in the visual arts in the absence of any other organization with the capacity and knowledge base to do so, including VANSA itself. We have done so based on a commitment to promoting fair and ethical business and professional practice in our sector.

In 2012, we then developed, with financial assistance from DALRO and the National Arts Council, a series of awareness-raising workshops and a resource on copyright. The content of these workshops and resources was developed entirely independently by VANSA, and was informed by input from a wide range of specialist legal expertise and roleplayers, including artists, galleries, auction houses, public institutions and relevant government departments (principally the Department of Arts and Culture and the Department of Trade and Industry).

Our approach in the development of these workshops and resources has been to provide information that is factual and which makes clear the choices that are available to artists around the management of copyright. We explicitly do not advocate that all artists should mandate DALRO to manage their copyright, but only those for whom it makes sense to do so given the likely use of their work by other parties, and for those artists who wish to exercise some level of control over the use, circulation and/or adaptation of their creative work by others, whether for commercial or non-commercial purposes. The workshops and the resource have also made reference to alternative and potentially complementary mechanisms for managing copyright through, for example, creative commons licensing and stock photography agencies. It should also be placed on record and stated clearly that VANSA as an organisation stands to receive no financial benefit from the collective administration of copyright.

We have also pursued this issue in the knowledge that there are a variety of other pressing issues relating to the need to achieve greater professionalism, collective organization and effective management in the visual arts more broadly. We nevertheless believe that the way in which the present issue is resolved will establish an important precedent for how our sector resolves other potentially contentious professional issues. We further believe that the position outlined in what follows is one which reconciles the rights of artists with the promotion of a robust and professionally managed visual arts economy in South Africa.

We also strongly believe that the terms of the present debate need to shift from an adversarial engagement concerned with avoiding compliance with copyright law and a fundamental questioning of the legal and moral basis for copyright (which are largely undisputed and systematised in all other parts of the creative industries in South Africa, and in the visual arts in a wide range of international contexts), towards a constructive engagement that places the interests of artists and their heirs at the centre of the debate.

International experience demonstrates that the exercise of copyright enables artists across all art forms (and their heirs) to generate modest, passive income streams, which are important to a sector in which the majority of creative producers are self-employed or freelance workers with erratic and unpredictable sources of income. This is particularly the case in a developing economy such as South Africa’s, and has a special pertinence for artists (and their heirs) who have suffered from historical disadvantage on the basis of the political and economic history of the country. In South Africa, the historical absence of a system of collective rights management has meant these benefits have not been felt. We believe that the present situation represents an important moment to assert the importance of our sector progressively adopting and building a system of collective rights management, bringing the visual arts up to speed with other art forms within the country, and international practice in the visual arts.

We are also mindful of the need to balance artists’ rights with respect to copyright against the rights of other stakeholders – art market professionals, publishers, the owners of artworks, etc. – and to ensure that the administration of these rights does not stifle the development of a robust and healthy art market, without which artists are deprived of income. It is also incumbent on artists to exercise their rights in ways that will maximise the visibility and circulation of their work.

In what follows we outline the fuller implications of such a position in ways that we hope will also clarify where and how copyright law in South Africa applies to the visual arts, so that individual artists and other stakeholders are able to engage with this issue in an informed way and, in the case of artists, make informed decisions about how they wish to exercise their rights. In doing so, we address five interrelated issues that we believe are fundamental to the present dispute:

  • The question of permission
  • The question of payment
  • The question of resale royalties
  • The question of an implied licence
  • The question of accountability

 

2. The Question of Permission

The first obligation that the Copyright Act places on those wishing to reproduce or adapt artists’ work is that they ask permission to do so. This is the case regardless of whether any payment is involved. Our view is that in South Africa a culture of impunity has been allowed to develop where this obligation is frequently not observed and generally not taken seriously. We believe that this is a basic right of all creative artists that should be upheld and strenuously asserted, unless artists of their own free will choose not to assert this right. It is also important to note that in law this obligation exists regardless of whether, or not, the artist is represented by a rights management organisation such as DALRO. This last point is important because it highlights the value for users of having an effective collective rights management system in place for artists. An organisation such as DALRO enables users to engage with a single fit-for-purpose entity rather than having to obtain permission from and negotiate agreements with multiple artists or their estates on an individual basis.

Our view is that in all instances, permission should be obtained from artists/their estates for artwork to be reproduced, other than in instances where this is sensibly not a requirement in South African copyright law – for example, in the context of criticism, review or news reporting.

It is also important to note that the aforementioned exclusions refute the oft-repeated claim that the enforcement of copyright will somehow stifle the circulation of, visibility of and marketability of artists’ work. Two other points are worth noting on the question of copyright and the marketability/visibility of artists:

  • the argument that artists who assert their rights with regard to copyright will undermine the visibility of their work in the market (i.e. auction houses will simply not reproduce their work) is predicated on the troubling assumption that only a limited number of artists in South Africa will assert these rights, either through DALRO, or individually. In this respect it is an argument that (wittingly or unwittingly) implies a ‘divide and conquer’ response to the very idea of collective rights management for artists.
  • this line of argument is additionally based on a further assumption that visibility in the auction market inevitably benefits artists through appreciation in the value of their work. The benefits (particularly for living artists) of being visible in the secondary market are however ambiguous, as the value of artists’ work in the primary market (which is where artists accrue a direct and indisputable financial benefit through gallery or studio sales) can often be undermined by lower values being achieved in the secondary/auction market.

 

 

3. The Question of Payment

A second obligation on the part of users relates to the fact that artists – or their estates – may require others to pay for the right to do reproduce their work in different contexts. Again, such payment is not contingent on artists being mandated by DALRO – any artist may require payment to be made for the right to reproduce their work, again regardless of whether they are mandated by DALRO – and as noted previously it is incumbent on those that wish to reproduce artists’ work to obtain permission and negotiate agreements regardless of whether artists are represented by DALRO, or not. In other parts of the creative sector in South Africa (music, performing arts, literature) such royalty payments have been regularised and systems have been put in place to collect royalty payments on a collective basis through rights management organisations such as SAMRO (for composers) and DALRO (for dramatic and literary authors).

In all other national contexts where there is a visual arts economy of any significance, these royalties are collected and distributed to visual artists through rights management organisations. As noted previously, in the absence of such a system, it becomes very difficult for both artists/their estates and the users of their work to benefit from a system of rights management that is workable, transparent and ensures compliance with the law. In the present context, the issue is clearly that DALRO has only relatively recently started to assert this right and obtain the mandate to do so from visual artists, resulting in a situation where organisations reproducing artists work find themselves being required to pay for something that they have not had to pay for previously, unsurprisingly leading to some discomfort on their part.

We believe that a resolution to the present impasse needs to be arrived at through mediated negotiation between DALRO and the auction houses regarding the rates that are presently being applied, which would appear to be a fundamental sticking point for the auction houses. We believe that independent opinion should be solicited – possibly under the auspices of Business and Arts South Africa (BASA) - on the question of whether the rates presently being charged - are, or are not, reasonable with reference to both international practice and the particular context of the secondary market for the visual arts in South Africa.

 

4. The Question of Artist Resale Rights

In the context of the question of payment, we note with interest that the issue of the resale royalty has also been introduced into the present debate, with at least one of the auction houses indicating that they would be happier with a system of reward to artists predicated on such a right, rather than through the enforcement of copyright law. Some background is necessary to clarify and contextualise the question of artist resale rights and their relevance in the present context.

In at least 59 other countries, artist resale rights legislation exists which enable artists to receive a small percentage (usually between 0,25 and 5%) of the value of sales of their work in the secondary market (i.e. sales that occur after the first sale of the work in the primary market through, for example, a gallery). This legislation is either integrated into existing legislation (as is the case with most EU countries) or functions as standalone or sui generis legislation (eg. the UK and Australia). The resale royalty addresses the relative disadvantage that visual artists have (by comparison to other art forms) on account of the ‘once-off’ or singular nature of visual artworks, and the limited ability of visual artists to benefit from the subsequent success of their work in the marketplace after the first sale has taken place. In the case of copyright in music, literature and other art forms, royalties are accrued to artists by virtue of the volume of sales of multiple copies of that work (in the form of books, CDs, monetised downloads, etc). In the case of the visual arts, value is generated through single, high-value sales, and potentially through a small number of high-value resales. The resale royalty enables artist to receive a moderated economic benefit from the latter. As with copyright royalties, resale royalties are in all instances collected by rights management organisations in the countries in which this right exists.

This right is not as yet in place in South Africa, though it is one that we have argued should be investigated with a view to implementing a model which takes into account the size, strength and nature of the South African secondary art market. Were the resale right to be introduced in the South African context we would argue that serious consideration should be given to the exclusion of art market professionals and auction houses from having to pay copyright related royalties for the reproduction of artworks in the context of advertising auctions or sales, given that artists and their estates would receive significant compensation through the resale royalty right.

However, in the absence of such a right being in place in legislation in South Africa, and the extreme unlikelihood that auction houses and dealers in the secondary market will collectively agree to adopt a uniform royalty system voluntarily, we believe that copyright-related royalty payments should be forthcoming from these parties. Should the auction houses be committed to the introduction of resale rights as an alternative to copyright enforcement in relation to their activities, we propose that they should either engage in a formal and collective agreement with DALRO on the operation of such a right on a voluntary basis (though it should be noted that such a voluntary system has not been implemented anywhere in the world – the right has always been vigorously opposed by auction houses and dealers), or lobby the Department of Trade and Industry to prioritise legislative intervention in this area.

In media reports, favourable reference has been made to the exclusion that exists in UK law relating to art market professionals reproducing artwork in the context of the sale of work. It is, however, important to note that in the UK, and across the whole of Europe, the resale royalty applies – from which substantially greater revenue is accrued to artists through the activities of auction houses than is the case with copyright revenue. It should also be noted that in the particular context of the UK, in spite of this exclusion, auction houses are in fact the single most important source of copyright related revenue for artists, by virtue of the comparator images that UK auction houses reproduce in their catalogues, providing context for the work being sold (the reproduction of these comparator images not being exempt from copyright royalty payments).

 

5. The Question of an Implied License
It has been suggested that the claim for copyright related royalty payments on images reproduced in auction house catalogues is null and void on the basis that there is an ‘implied license’ passed onto the buyer of an artwork which gives him/her – or an appointed agent such as an auction house - the right to reproduce an artwork in the context of reselling that work to another party. A fundamental precept of copyright law as it applies to the visual arts in South Africa and every other national context that we are aware of, is that the artist retains copyright in the artwork when the physical work is sold to another party. The exceptions to this rule in South African law include, but are not limited to, situations where a portrait has been commissioned, or where a work has been produced during the course of employment by another party. None of these exceptions or exclusions are, however, relevant in the context of the present dispute.

We have come across no precedent in any other national context for the ‘implied license’ argument presently being put forward. In European and UK law, there are explicit exceptions which are unambiguously spelled out in their respective legislation, which grant art market professionals or auction houses the right to reproduce work without permission or payment in the context of advertising the sale or auction of artwork. Again, it is important to note that in all of these contexts, the resale right applies, from which substantially greater revenue is generally due to artists.

In other national contexts (for example, Australia and Canada) this exception is not included in legislation, and auction houses are obliged to pay for the right to reproduce artwork in their online and/or print catalogues. In this general context, we would be surprised if the ‘implied license’ argument were to find purchase in a court of law in South Africa, and believe that the substantial expense that will be incurred in legal fees in pursuing this argument would be more profitably invested in paying artists royalties that we believe are due to them.

 

6. The Question of Accountability

During the unfolding of the present dispute, it has been suggested that DALRO – and the artists and heirs that they represent – are acting out of an insufficiently considered self-interest. In the less-considered expressions of this position, epithets such as ‘greed’ have been applied to the organisation, and to the artists or heirs that it represents. We firmly believe that such language should have no place in the present debate/dispute. Collective rights management is an established mechanism the world over, and provides visual artists with a rare – if not the only - channel that they have for collectively asserting their rights in an industry whose structure – for better or worse - is inimical to unionisation.

At the same time we also believe that DALRO should seek to build a sustained and accountable engagement with artists and the sector more generally, particularly in the context of the relative novelty of collective rights management for the visual arts in the South African context. We recommend that the following measures are taken on the part of DALRO:

  • The organisation should actively seek appropriate representation from the visual arts sector/visual artists in its governance and advisory structures.
  • The organisation should work towards the progressive reduction of the administrative fee charged for the collection and distribution of royalties over time, as the collection of revenue from the visual arts becomes more economically viable for the organisation. This is, for example, the approach of DALRO’s counterpart in the UK, DACS (see www.dacs.org.uk).
  • We note the importance of DALRO taking into particular account the constraints under which the non-profit and public infrastructure for the visual arts operates (principally, public art museums and arts development organisations) in the determination of appropriate rates for the reproduction of artwork in museum catalogues, exhibition publications and the like.
  • We also note the importance of there being a system of advice and support in place on copyright related issues for the significant number of artists for whom rights management will not be relevant at this stage of their careers.

In short, we believe that all stakeholders in the industry should engage constructively and positively with the concept of collective rights management for artists. It is a space that has been filled by DALRO and until such time as another organisation steps forward to play this role, we believe that DALRO’s efforts in this area should be supported by both artists and the users of their work, as having a system of collective rights management serves the interests of both parties.

 

 

Background to VANSA’s engagement with copyright as an issue for the visual arts sector

VANSA operates as an umbrella structure and development agency seeking to engage with and serve the interests of the visual arts sector in South Africa. The membership that we seek to serve includes visual artists, curators, academics, arts managers, gallerists and a variety of businesses and organisations operating in the contemporary visual arts sector. We do so through considered engagement in strategic projects that seek to address one or more of the following goals:

  1. Wider access to opportunities and networks for individual and organisational development
  2. Improved levels of professional and ethical practice among individuals, businesses and organisations working in the visual arts
  3. New ideas, new practices and new audiences for contemporary art practice in South Africa
  4. New market opportunities and buyers for South African contemporary art
  5. An enabling policy and regulatory environment for visual arts professionals, businesses and organisations

Our engagement with the issue of copyright relates principally to goals 2 and 5. Informed by the findings of the 2010 Human Sciences Research Council report on the visual arts sector, VANSA initiated a process of dialogue with DALRO and public consultation on the specific issue of copyright in the visual arts in 2010. During the course of 2012, VANSA undertook wide-ranging consultations, developed resources and convened workshops and meetings across all nine provinces aimed at raising awareness among artists and other stakeholders in the visual arts on the application of copyright law to the visual arts in South Africa. An advisory resource on copyright for artists and other professionals working in the visual arts is forthcoming in 2013.

The present statement has been developed in consultation with the national executive of the organisation, whose membership is as follows:

  • Jonathan Garnham (gallerist)
  • Nontobeko Ntombela (curator and academic)
  • Themba Shibase (academic and artist)
  • Claus Bradtke (gallerist)
  • Zen Marie (artist and academic)
  • Athi Patra-Ruga (artist and curator)

 

Bookmark and Share
Document Actions

Art-map-button.jpg

 Artright-Button.jpg

« October 2017 »
October
MoTuWeThFrSaSu
1
2345678
9101112131415
16171819202122
23242526272829
3031