American Royalties Too Act of 2014

Summary: American Royalties Too Act of 2014 - Expands copyright owners' exclusive rights, in the case of a work of visual art, to include the right to collect or authorize the collection of a royalty if the work is sold by a person other than the author for at least $5,000 in an auction. Defines &quot;auction&quot; as a public sale of visual art to the highest bidder run by an entity that sold at least $1 million of works of visual art during the previous year. Revises the term &quot;work of visual art&quot; to make requirements for photographs consistent with requirements for paintings, drawings, and prints. (Currently, a photograph must be a still photographic image produced for exhibition purposes only.) Limits the amount of such a royalty to the lesser of: (1) 5% of the purchase price; or (2) $35,000, subject to cost-of-living adjustments. Directs entities conducting such auctions to collect and pay the royalties to a visual artists' copyright collecting society. Requires the collecting society, at least four times each year, to distribute the appropriate royalties (minus administrative expenses) to authors or successor copyright owners. Requires an author of a work of visual art, in order to be eligible to receive such a royalty, to: (1) be a citizen of, or domiciled in, the United States or a country that provides resale royalty rights; or (2) have first created the work in the United States or a country that provides such royalty rights. Establishes a copyright infringement offense for the failure to pay such a royalty. Subjects infringers to: (1) statutory damages, and (2) liability for the full royalty.  Prohibits the sale, assignment, or waiver of the right to collect such a royalty, subject to exceptions for works made for hire and transfers of copyright ownership.  Directs the Register of Copyrights to issue regulations governing visual artists' copyright collecting societies.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Royalties Too Act of 
2014''.

SEC. 2. DEFINITIONS.

    Section 101 of title 17, United States Code, is amended--
            (1) by inserting after the definition of ``architectural 
        work'' the following:
            ``An `auction' means a public sale at which a work of 
        visual art is sold to the highest bidder and which is run by an 
        entity that sold not less than $1,000,000 of works of visual 
        art during the previous year.'';
            (2) by inserting after the definition of ``Pictorial, 
        graphic, and sculptural works'' the following:
            ``For purposes of section 106(b), `price' means the 
        aggregate of all installments paid in cash or in-kind by or on 
        behalf of a purchaser for a work of visual art as the result of 
        the auction of that work.'';
            (3) by inserting after the definition of ``registration'' 
        the following:
            ``For purposes of sections 106(b) and 701(b)(5), `sale' 
        means transfer of ownership or physical possession of a work of 
        visual art as the result of the auction of that work.''; and
            (4) in the definition of ``work of visual art'', by 
        striking ``A `work of visual art' is--'' and all that follows 
        through ``by the author.'' and inserting the following: ``A 
        `work of visual art' is a painting, drawing, print, sculpture, 
        or photograph, existing either in the original embodiment or in 
        a limited edition of 200 copies or fewer that bear the 
        signature or other identifying mark of the author and are 
        consecutively numbered by the author, or, in the case of a 
        sculpture, in multiple cast, carved, or fabricated sculptures 
        of 200 or fewer that are consecutively numbered by the author 
        and bear the signature or other identifying mark of the 
        author.''.

SEC. 3. EXCLUSIVE RIGHTS.

    Section 106 of title 17, United States Code, is amended--
            (1) by inserting ``(a) In General.--'' before ``Subject to 
        sections 107 through 122'';
            (2) in paragraph (5), by striking ``and'' at the end;
            (3) in paragraph (6), by striking the period at the end and 
        inserting ``; and''; and
            (4) by adding at the end the following:
            ``(7) in the case of a work of visual art, to collect a 
        royalty for the work if the work is sold by a person other than 
        the author of the work for a price of not less than $5,000 as 
        the result of an auction.
    ``(b) Collection of Royalty.--
            ``(1) In general.--The collection of a royalty under 
        subsection (a)(7) shall be conducted in accordance with this 
        subsection.
            ``(2) Calculation of royalty.--
                    ``(A) In general.--The royalty shall be an amount 
                equal to the lesser of--
                            ``(i) 5 percent of the price paid for the 
                        work of visual art; or
                            ``(ii) $35,000.
                    ``(B) Adjustment of amount.--In 2015 and each year 
                thereafter, the dollar amount described in subparagraph 
                (A)(ii) shall be increased by an amount equal to the 
                product of--
                            ``(i) that dollar amount; and
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) of the 
                        Internal Revenue Code of 1986 for the year, 
                        determined by substituting `calender year 2015' 
                        for `calendar year 1992' in subparagraph (B) 
                        thereof.
            ``(3) Collection of royalty.--
                    ``(A) Collection.--Not later than 90 days after the 
                date on which the auction occurs, the entity that 
                conducts the auction shall--
                            ``(i) collect the royalty; and
                            ``(ii) pay the royalty to a visual artists' 
                        copyright collecting society.
                    ``(B) Distribution.--Not fewer than 4 times each 
                year, the visual artists' copyright collecting society 
                shall distribute to the author or his or her successor 
                as copyright owner an amount equal to the difference 
                between--
                            ``(i) the net royalty attributable to the 
                        sales of the author; and
                            ``(ii) the reasonable administrative 
                        expenses of the collecting society as 
                        determined by regulations issued under section 
                        701(b)(5).
            ``(4) Failure to pay royalty.--Failure to pay a royalty 
        provided for under this subsection shall--
                    ``(A) constitute an infringement of copyright; and
                    ``(B) be subject to--
                            ``(i) the payment of statutory damages 
                        under section 504(c); and
                            ``(ii) liability for payment of the full 
                        royalty due.
            ``(5) Right to collect royalty.--The right to collect a 
        royalty under this subsection may not be sold, assigned, or 
        waived except as provided in section 201.
            ``(6) Eligibility to receive royalty payment.--The royalty 
        shall be paid to--
                    ``(A) any author of a work of visual art--
                            ``(i) who is a citizen of or domiciled in 
                        the United States;
                            ``(ii) who is a citizen of or domiciled in 
                        a country that provides resale royalty rights; 
                        or
                            ``(iii) whose work of visual art is first 
                        created in the United States or in a country 
                        that provides resale royalty rights; or
                    ``(B) the successor as copyright owner of an author 
                described in subparagraph (A).''.

SEC. 4. NOTICE OF COPYRIGHT.

    Section 401 of title 17, United States Code, is amended by adding 
at the end the following:
    ``(e) Non-Applicability to Works of Visual Art.--The provisions of 
this section shall not apply to a work of visual art.''.

SEC. 5. COPYRIGHT OFFICE.

    Section 701(b) of title 17, United States Code, is amended by--
            (1) redesignating paragraph (5) as paragraph (6); and
            (2) inserting after paragraph (4) the following:
            ``(5) Issue regulations governing visual artists' copyright 
        collecting societies described in section 106, that--
                    ``(A) establish a process by which an entity is 
                determined to be and designated as a visual artists' 
                copyright collecting society, that--
                            ``(i) requires that a visual artists' 
                        copyright collecting society authorized to 
                        administer royalty collections and 
                        distributions under this title shall--
                                    ``(I) have prior experience in 
                                licensing the copyrights of authors of 
                                works of visual art in the United 
                                States; or
                                    ``(II) have been authorized by not 
                                fewer than 10,000 authors of works of 
                                visual art, either directly or through 
                                reciprocal agreements with foreign 
                                collecting societies, to license the 
                                rights granted under section 106; and
                            ``(ii) prohibits an entity from being 
                        designated as a visual artists' copyright 
                        collecting society if, during a period of not 
                        less than 5 years that begins after the date on 
                        which the entity is designated as a visual 
                        artists' copyright collecting society, the 
                        entity does not distribute directly to each 
                        author, or to the successor as copyright owner 
                        of each author, the amount of the royalties 
                        required to be distributed under section 
                        106(b)(3)(B);
                    ``(B) determine a reasonable amount of 
                administrative expenses that a visual artists' 
                copyright collecting society may deduct from the 
                royalties payable to an author of a work of visual art 
                under section 106(b)(3); and
                    ``(C) establish a process by which--
                            ``(i) not less frequently than annually, a 
                        visual artists' copyright collecting society 
                        may request from any entity that conducts 
                        auctions a list of each work of visual art sold 
                        in those auctions that is by an author 
                        represented by the collecting society; and
                            ``(ii) an author of a work of visual art 
                        may obtain from a visual artists' copyright 
                        collecting society any information requested by 
                        the collecting society under clause (i) that 
                        relates to a sale of a work of visual art by 
                        the author, including the amount of any royalty 
                        paid to the collecting society on behalf of the 
                        author.''.

SEC. 6. STUDY REQUIRED.

    Not later than 5 years after the date of enactment of this Act, the 
Register of Copyrights shall--
            (1) conduct a study on--
                    (A) the effects, if any, of the implementation of 
                this Act, and the amendments made by this Act, on the 
                art market in the United States; and
                    (B) whether the provisions of this Act, and the 
                amendments made by this Act, should be expanded to 
                cover dealers, galleries, or other professionals 
                engaged in the sale of works of visual art; and
            (2) submit to the Committee on the Judiciary of the Senate 
        and the Committee on the Judiciary of the House of 
        Representatives a report on the study described in paragraph 
        (1), including any recommendations for legislation.

SEC. 7. EFFECTIVE DATE.

    This Act and the amendments made by this Act shall take effect on 
the date that is 1 year after the date of enactment of this Act.