Copyright: Suites for Artists - Resale Right Directive

Jane Lambert

14 July 2002

On 27 Sep 2001 the EU Council of Ministers adopted the "Resale Right Directive" (Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art, OJ L 272 , 13/10/2001 p. 32 - p. 36).  Art. 1(1) requires member states to provide a resale right for the benefit of the author of an original work of art. This right, also known as the "droit de suite", will be:

"an inalienable right, which cannot be waived, even in advance, to receive a royalty based on the sale price obtained for any resale of the work, subsequent to the first transfer of the work by the author." 

Member states must implement the directive and advise the Commission that they have done so by 1 January 2006 ( Art. 12 (1) and (2) ibid). Eleven of the 15 member states of the EU already provide for such a right in their national laws. Those that do not are Austria, Ireland, the Netherlands and the UK.  According to Martina Supper, resale rights exist in a number of civil law countries outside Europe but the only common law jurisdiction where it is available is California (s.986 California Civil Code).

History
According to James Fenton the idea of an artist's resale right originated among a syndicate of art investors who each agreed to invest 220 French francs to acquire new works of art, rotate each acquisition around the syndicate and then sell the collection after 10 years. Because the value of the collection handsomely exceeded the original investment, the members further agreed in 1914 to pay 20% of the net proceeds of sale into a fund to be shared by the artists in proportion to the appreciation of the value of their individual works ("Becoming Picasso" A review of John Richardson "A Life of Picasso: Volume II, 1907-1917" (New York Review of Books, 6 Feb 1997)). The French National Assembly embraced the principle on 20 May 1920 passing the first law to require a percentage of the gross sale price of the work of art to be paid to the artist on a subsequent sale (Art. 42 of Loi du 20 mai 1920 (1957 JO 2723)). The French lead was followed by Italy in 1941 (Arts. 144 - 155, Law No. 633, Gaz. Uff. 166 (16 July 1966) and Germany in 1965. Article 14ter of the Bern Convention recognizes an inalienable right of an author or, after his death, the persons or institutions authorized by national legislation, to an interest in any sale of his work subsequent to the first transfer by the author of the work. However, such right is conditional upon legislation providing for such right in the country to which the author belongs and members of the Bern Union are not compelled to enact such legislation.

Reason for the Directive

The recital to the Resale Right Directive cites three reasons for harmonizing the law in this area. The first is that it is anomalous that authors of graphic and plastic works of art cannot benefit from successive exploitation of their work in the way that writers, composers and performing artists can. As the Commission put it in its "Clarification" web page:

"Why should David Hockney, Damien Hirst or Tracey Emin be differently treated from the Spice Girls or Elton John?"

Secondly, the European Court ruled in Joined cases C-92/92 and C-326/92 Phil Collins v Imtrat HgmbH and others  [1993] ECR I-05145 that provisions of national law requiring reciprocity cannot be relied upon to deny nationals of other member states rights conferred on national authors since such provisions are inherently discriminatory. Thirdly, the existence of a resale right in some EC states but not in others and disparities in treatment in national law tend to distort the Community market for works of art and antiquities.

Scope

The new right will apply to "works of graphic or plastic art", that is to say "pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs, provided they are made by the artist himself or are copies considered to be original works of art" (art 2 (1)) that are protected by copyright as at the 1 January 2006 (art 10).Copies will fall within the definition if they are made in limited numbers by the artist himself or under his authority. They will normally have been numbered, signed or otherwise duly authorised by the artist (art 2 (2)).  Paragraph (19) of the recitals makes clear that the harmonization brought about by the directive does not apply to original manuscripts of writers and composers. Member states are free to set a minimum sale price for the application of resale right (art 3 (1)) provided that it is not below €3,000 (art 3 (2)). The right shall apply to all acts of resale involving "art market professionals, such as salesrooms, art galleries and, in general, any dealers in works of art" (art 1 (2)) but not to resale by persons acting in their private capacity to museums which are not for profit and which are open to the public (paragraph (18) of the recitals). Member states may provide that the right shall not apply to acts of resale where the seller has acquired the work directly from the author less than 3 years before that resale and where the resale price does not exceed €10,000 (art 1 (3)). 

Incidence

The royalty will be due from the seller (art 1 (4)). However, national legislation may provide for the liability to be shared with buyers and such intermediaries as salesrooms, art galleries and dealers in works of art. 

Beneficiaries

The royalty will be payable to the author of the work and after his death to those entitled to his estate (art 6 (1)). However, countries such as the United Kingdom that do not confer resale right on the 27 September 2001 may delay applying the benefit of retail right in favour of the estates of deceased artists until 1 January 2010 (art 8 (2)). Any such country may have a further 2 years, if necessary, to enable its economic operators to adapt gradually to the resale right system while maintaining their economic viability provided that the government concerned informs the Commission with its reasons not later than 12 months before the end of those 2 years (art 8 (2)). This extension of time and the complicated dispute resolution formula is a compromise necessitated by strenuous opposition to the directive by the London art market (See "New deal struck on droit de suite" Antiques Trade Gazette) and some Eurosceptic politicians (see speech by Mr Jeffrey Titford MEP on 2 July 2001 to the European Parliament, Strasbourg).
 

Member states may provide that authors who are nationals of third countries and their successors in title shall enjoy resale right only if legislation in the country of which the author or his or her successor in title is a national permits reciprocal resale right protection (art 7 (1)). The Commission is required to publish and update a list of such third countries (art 7 (2)).Member states may treat authors who are not nationals but who have habitual residence in their territories in the same way as their own nationals for the purpose of resale right protection (art 7 (3)).

Rates

Art. 4 (1) sets the royalty at the following rates: 

However, the total amount of the royalty may not exceed C12,500. All sale prices are nett of tax.

Collection and Enforcement

Member states may provide for compulsory or optional collective management of the royalty (art 6 (2)).For a period of 3 years after resale, persons entitled to the royalty may require from any art market professional involved in a subsequent sale to furnish such information as may be necessary to secure payment of the royalty in respect of the resale (art 9),

Term

Resale right shall continue for so long as copyright remains in force.

Review

Art. 11 (1) requires the Commission to submit to the European Parliament, the Council and the Economic and Social Committee not later than 1 January 2009 and every 4 years thereafter a report on the implementation and effect of the directive, paying particular attention to the competitiveness of the market in modern and contemporary art in the Community, especially as regards the position of the Community in relation to relevant markets that do not apply the resale right and the fostering of artistic creativity and the management procedures in the member states. The Commission must examine in particular the directive's impact on the internal market and the effect of the introduction of the resale right in those member states that did not have a resale right in national law before the directive. Where appropriate, the Commission is to  submit:

• proposals for adapting the minimum threshold and the rates of royalty to take account of changes in the sector,

• proposals relating to the maximum amount laid currently set at C12,500, and

• any other proposal it may deem necessary in order to enhance the effectiveness of the directive.

A Contact Committee consisting of representatives of the competent authorities of the member states and chaired by a representative of the Commission, which shall meet either on the initiative of the chairman or at the request of a member state, shall organize consultations on all questions deriving from application of the directive and facilitate the exchange of information between the Commission and member states on relevant developments in the art market in the Community (art 11 (2) and (3))

Implementation in the UK

In a report commissioned by the Arts Council Clare McAndrew and Lorna Dallas-Conte identified some 10 requirements for the implementation of the directive in the UK. They concluded that whoever may be chosen as a collection and distribution body will need to demonstrate that they can meet those requirements and have rigorous and transparent procedures for administering artists' resale right. They recommended that implementing legislation be formulated as simply and clearly as possible and that collection should be entrusted to a single institution to maximize efficiency. They favoured the German system of requiring dealers and auctioneers to report periodically the turnover of eligible works of art and make lump sum payments to the collection agency. The Patent Office is inviting comments and enquiries from members of the public though it has not yet begun formal consultations.

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