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California Statute - Civil Code § 986, California Resale Royalty Act

Cal. Civ. Code § 986 (California Resale Royalty Act).


The California Resale Royalty Act (CRRA), which entered into effect January 1, 1977, is the only U.S. law – state or federal – that recognizes resale royalty rights (droit de suite) for visual artists. However, recent federal court decisions have greatly limited its scope. In 2015, the Ninth Circuit limited the application of the CRRA to only sales of artwork occurring within the State of California. In 2018, the same court restricted the CRRA even further, ruling that it was preempted by the 1976 federal Copyright Act beginning the date the federal law entered into force (January 1, 1978). Therefore, the court held, the CRRA is only applicable to sales of artwork that occurred in California between January 1, 1977 and January 1, 1978.

Under the original terms of the CRRA, when an artwork sold for more than $1,000, the artist or his heirs (for a period of 20 years after his death) were entitled to a 5% royalty on the total sale price, to be paid by the “seller or the seller’s agent.” The royalties did not attach to “initial sales,” such as sales made by an artist directly. Rather, the royalties began to accrue when the initial buyer sold the artwork to a third party, and continued for all subsequent sales of the work. Royalties would be collected on transactions that took place in California, as well as all sales by California residents, regardless of where they occurred.

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