The Artist´s Resale Right

The EC has passed a directive to give artists a royalty, calculated as a percentage of the sale price, each time their work is sold. The droit de suite, or artist’s resale right, is an attempt to put artists on an equal footing with other authors of copyright works such as writers, composers and performers by ensuring they receive a royalty on sales of their work.

The droit de suite is not a new concept. The Berne Convention for the Protection of Literary and Artistic Works directs that authors of original works of art should benefit from a droit de suite. It has been an essential element of France’s intellectual property law since 1920 and it exists in the laws of 11 Member States of the EU.

Many artists live on or below the poverty line today. Van Gogh famously sold only one painting in his lifetime and lived impoverished, while his paintings sell for millions of pounds today. The droit de suite will give artists during their lifetime, and their successors for seventy years after the artist’s death, the right to receive a royalty on the sale price of their works and the opportunity to share in the appreciation of the value of their works as a result of the artist’s continuing success.

It will apply to all acts of resale subsequent to the first sale by the artist, involving as sellers, buyers or intermediaries art market professionals such as salesrooms, art galleries and, in general, any dealers in works of art. Member States may provide an exception from the droit de suite for acts of resale where the seller has acquired the work directly from the artist less than 3 years before the resale and where the resale price does not exceed EUR 10,000 (about £6,215). It applies to "original" works of art that are protected by law of copyright on 1 January 2006. The droit de suite will therefore only apply to sales of modern art.

Original works of art are defined as "works of graphic or plastic art such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs" that are made by the artist himself or are copies of works of art which have been made in limited numbers by the artist himself or under his authority.

The droit de suite is unassignable and inalienable. It cannot be transferred, sold or waived. This protects artists from the vulnerable position that many writers and performers find themselves in when a publisher or production company demands that they assign their copyright or waive their moral rights in a work.

The royalty is payable by the seller and is calculated on a tapering scale as the sale price of the work increases. The following table sets out the rates artists are entitled to receive. The directive specifies that these rates are net of tax. The maximum royalty an artist may receive per sale is about £7,820. Member States are free to set a minimum sale price from which the droit de suite will apply, but this must not be less than EUR 3,000 (about £1,900). This gives artists a minimum royalty of about £76.

*Member States may choose to increase this to 5%.

To enable artists to collect the royalty, Member States must provide that, for a period of three years after the sale of a work of art, artists (and their successors) can require information from any art market professional who sold the work in order to secure payment of the royalties due to them in respect of that sale.

The droit de suite will be implemented in the UK despite the fierce practical and economic arguments against it. The London art market sees serious disadvantages to the droit de suite. London is the largest art market in Europe and the second largest art market in the world. Auction houses, commercial galleries and dealers are extremely worried that the droit de suite will cause a loss of business because it will force sale prices and administration costs to rise and sales will shift to either New York or Geneva, where there is no droit de suite.

Artists argue that any benefit they receive from the droit de suite will be negligible or even non-existent because sale prices will drop to take account of the extra charge and the administration costs involved in operating the droit de suite. Alternatively, sales of art will be private, circumventing the droit de suite and any benefit to the artist altogether.

Another consideration is the number of artists and their families that will actually benefit from the droit de suite. In France, it is estimated that only a handful of artists and their families receive any significant benefit from the droit de suite. It is only commercially successful artists – a significant proportion of whom will be dead - who will get any significant value from this new right. Furthermore, the maximum royalty an artist can expect to receive per sale is only about £7,820. Artists looking to the droit de suite as a significant source of income would do better to re-examine the commercial arrangements that they already have, particularly those for the reproduction of their works.

Directive 2001/84/EC of 27 September 2001 must be implemented into UK law by 1 January 2006. Member States who do not apply a droit de suite at present, such as the UK, have an extension until 1 January 2010 to implement the Directive and can request a further extension of 2 years to enable economic operators to adapt to operating the droit de suite. The droit de suite may not therefore become part of UK law until 2012.