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Gov aims to extend dead artists' royalty denial

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The Government has asked the European Commission for permission to continue to deny dead artists' estates a royalty on art sales. It has sided with the art sale industry over artists in seeking to extend the denial of the royalty until 2012.

The Government said that it feared that introducing the royalty for dead artists' work might dampen demand in the art industry at a time when difficult economic conditions are adversely affecting sales.

A European Union Directive of 2006 introduced a new artists' right. They became entitled to a royalty payment when their work was sold by dealers even if they were not the seller of the work.

The royalty was designed to bring some benefit to artists from the very high prices that pieces of art can sell for in the years after the original sale by the artist.

There was no such right in the UK before the Directive, and countries which did not already have a resale royalty were allowed to award it only to living artists in a transition period until 2010. They have an option to extend that derogation until 2012, and the Government has now applied for that extension.

The royalty only applies to works that are still in copyright, which means that it is by an artist who is alive or who died less than 70 years ago.

The UK exercised its right to introduce the royalty only for living artists and has now asked the Commission to extend that right to 2012. In asking for the extension the Government is backing the interests of the art sale industry over the interests of artists.

The UK's Intellectual Property Office (IPO) conducted a consultation on the extension in which artists unanimously asked for it to lapse in 2010. The IPO said that 90 per cent of the 400 respondents to the consultation, and all of the artists who responded, asked for the derogation to end in 2010.

The IPO also said that all bar two of the art trade responses asked for the derogation to be extended until 2012 so that dealers and buyers did not have to pay the levy.

The royalty only applies to sales of over €1,000 and is capped at €12,500. It is calculated on a sliding scale.

The Government said that it believed that the current credit crisis-triggered economic problems are adversely affecting art sales, and that the introduction of a royalty for dead artists would make matters worse.

"We are committed to supporting businesses, including the UK art trade, through the current downturn. Applying resale right to deceased artists at this time would place a considerable burden on the art trade," said John Denham, Secretary of State for Innovation, Universities and Skills.

"If the art traders are seeing a reduction in business they will not only sell fewer works - but will not buy them from artists either. This will have a knock on effect for artists who will find that there is less of a market for their work," he said.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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