The 'Droit de Suite', An Analysis Across Two Jurisdictions: Cross Fertilisation Towards Inclusivity
| Author | Anthony O' Dwyer |
| Position | BBS, BCL Phd Candidate UCC |
| Pages | 59-78 |
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THE ‘DROIT DE SUITE’, AN ANALYSIS ACROSS TWO JURISDICTIONS: CROSS
FERTILISATION TOWARDS INCLUSIVITY
Anthony O’ Dwyer*
ABSTRACT
The paper will examine the ‘droit de suite’ or artists’ resale right and analyse how it has
been applied in the EU and in Ireland. The paper will also look at moves in the US to adopt
a similar right and assess whether there has been any cross fertilisation of ideas. The
question will also be asked whether the current EU system could learn something from the
proposed US formulation. The compar ison will be conducted under a number of hea dings
which will compare how the right functions in the EU, Ir eland and under the proposed US
provisions. It will conclude with an assessment of the effect of the droit de suite on the EU
market to-date and whether this will have any effect on a future US decision to incorporate
the right into their copyright law.
A INTRODUCTION
The droit de suite is an intellectual property right. It literally means ‘the right to follow’, and
is a further extension of the protection afforded by copyright to the creators of art. These
rights combined respond to a market failure to make socially beneficial activities financially
viable for their creators.
The droit de suite entitles artists and their heirs to retain an interest in all successive
commercial re-sales of their art-work and receive a portion of the selling price.
1 The right is
often referred to as a moral right as opposed to an economic right as enshrined in traditional
copyright law.2 ‘Moral rights consecrate the idea that there is an intimate link between the
author and the work, because the work carries a personal imprint of the author.’3 Historically
these moral rights4 encompassed rights of integrity, paternity, disclosure and retraction,
giving artists control of how their work was utilised after sale. There was no economic return
*BBS, BCL Phd Candidate UCC.
1 Rita E Hauser, ‘French droit de suite The Pro blem of Protection for the Underprivileged Artist Under the
Copyright Law’ in Copyright Law Symposium 1, 24 (ASCAP Copyright Law Symposium Series No 11, 1962).
2 Henry Lydiate, ‘Artists Resale Right; Fourth Year Report’, (Artlaw, Art Monthly Magazine 2010),
http://www.artquest.org.uk/articles/view/artists-resale-right-4th-year-report > accessed 2 0 February 2013.
3 Anne Latournerie, ‘International Perspectives on Moral Rights’ (SABIP Policy Panel Event, 23 rd March 2010)
2010.pdf > accessed 20 February 2013.
4 These moral rights have their basis in the civil law tradition and it was not until the Berne Convention of 1928
that moral rights took on an international dimension and transcended their civil law origins. See ‘The Berne
Convention for the Protection of Literary and Artistic Works’, September 9, 1886 , as revised at Paris on July 24,
1971 and as amended Sept 28, 1979, 102 Stat 2853, 1161 UNTS 3,
http://www.wipo.int/treaties/en/ip/berne/trtdocs_wo001.html#P174_33037 > a ccessed February 20 2013.
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as the focus was on protecting the art and the artist’s reputation. Therefore, while the droit de
suite is often cited as a moral right, it is fundamentally different.
B DROIT DE SUITE IN THE EU
Albert Vaunois first introduced the concept of the droit de suite for visual artists in an article
published in the Chr onique de Pa ris in 1893.
5 A French attorney, Edouard Mack, then raised
the issue of the droit de suite in his 1896 report to the Berne Congress of the International
Literary and Artistic Association. The Société des Amis du Luxembourg were formed in
Paris in 1903 with the specific purpose of enacting the droit de suite into law. Its draft
proposal was issued one year later, serving as the basis for the French Act of 1920.6 Under
that law there were several exemptions to the right including the exclusion of private sales; it
was thought that this made collection of the royalty more practical as collecting societies
could engage in arrangements with galleries and auction houses.7 The right slowly spread for
a time across Europe with Belgium adopting the right in 1921,8 Czechoslovakia in 1926,9
Poland in 1935,10 Uruguay in 1937,11 and Italy in 1941. 12 The right was subsequently
adopted by the Brussels Conference of the Berne Convention in 1948.13 However it was not
until the block adoption by the EU fifty years later14 that the right gained some momentum.
In the EU a desire to remove distortions in the internal market gave impetus to the EU
Commission to investigate the merits of the droit de suite and consider whether the laws of
Member States should be harmonised so as to include the right. Following the EU
Commission Green Paper in 1995 it was decided to harmonise the law by implementing the
right.15 The Resale Right Directive came into effect on the 21st of September 2001.16
5 Albert Vaunois, ‘Chronique de Paris’, 25 Feb 1893, quoted in Liliane de Pierredon -Fawcett, The Droit de Suite
in Literary an d Artistic Proper ty, A Comparative Law Study (Louise-Martin Valiquette Translation), (New
York, Columbia University 1991).
6 Art 42 of Loi du 20 mai 1920 (1957 JO 2723).
7 ibid.
8 Law of 25 June 1921.
9 Law of 24 November 1926, art 35.
10 Law of 22 March 1935, modifying that of 29 March 1926.
11 Law of December 1937, art 9.
12 Law of 22 April 1941, arts 144-55.
13 ‘Brussels Conference on the Berne Convention for the Protection of Literary and Artistic Works’ (June
26th1948).
14 Council Directive 2001/84/EC, Official Journal L 272, 13/10/2001 P 0032 -0036.
15 Commission (EC), ‘Copyright and Related Rights in the Information Society’ (Gree n Paper) COM(95) 382
final, 19 July 1995.
16 Council Directive (n 14).
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Subsequent EU implementation came in two stages; firstly, the right applied during the
lifetime of the artist only, and then later, to their heirs for a period of 70 years post mortem.
17
Secondly, regarding the application of the right to the heirs of deceased artists, there was an
extended implementation period of two years for countries that had not previously recognised
the right. 18
C DROIT DE SUITE IN THE US
Several copyright bills have been introduced in the US Congress which propose moral rights
protection for visual artists, some including a resale royalty. In 1978, Representative Henry
Waxman introduced legislation calling for a five per cent resale royalty of the gross sales
price of works sold in interstate or foreign commerce for $1,000 or more.19 In 1986 and
1987, Senator Edward Kennedy and Representative Edward Markey sought a seven per cent
royalty of the appreciated value. Neither attempt to introduce the droit de suite into US law
was successful.
In 1989 the US became a member of the Berne Convention and as such was required to
address the lack of status of moral rights in US law. In 1990, the US passed the Visual Artist
Rights Act of 1990.20 During the drafting process there was intense debate surrounding the
introduction of moral rights and the droit de suite into US law. The Act saw the transposition
of the moral rights of paternity (right to have your name attached to the work) and integrity
(prevention of mutilation of the work) into US law. These rights applied strictly to visual
artists only; writers, composers, and performers were excluded. The droit de suite yet again
failed to pass muster as it was considered to be too much of an interference with the
constitutionally enshrined right to property. However, section 608(b) of the Act required the
Copyright Office, in consultation with the Chair of the National Endowment for the Arts, to
study the feasibility of implementing a resale royalty on the sale of visual artwork. Again, in
17 ibid. Art 8(1) ‘The term of protection of the resale right shall correspond to that laid down in Art 1 of
Directive 93/98/EEC.’ Art 8(2) ‘By way of derogation from paragraph 1, those Me mber States which do not
apply the resale right on (the entry into force date referred to in Art 13), shall not be required, for a per iod
expiring not later than 1 January 2010, to apply the resale right for the benefit of those entit led under the artist
after his/her death.’
18 ibid. art 8(3) ‘A Member State to which paragraph 2 applies may have up to two more years, if necessar y to
enable the economic operators in that Member State to adapt gradually to the resale right system while
maintaining their economic viability, before it is required to apply the resale right for the benefit of those
entitled under the artist after his/her death’.
19 Marilyn J Kretsinger, ‘Droit de suite: T he Artist’s Right to a Resale Royalty’, (1992-1993) 15 Hastings
Commerce and Entertainment Law Journal 967, 969. HR 11403, 95 th Congress, 2nd Session (1978).
20 17 USC § 106A (VARA).
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1992, the droit de suite was shelved following a report by the US Register for Copyright
Committee.
21 They concluded that there was insufficient economic and copyright policy
justification for incorporating the dr oit de suite provisions into the US Copyright Act.22 In
addition, a ‘wait and see’ policy regarding the EU stance should be adopted.23 It should be
noted that the Copyright Office Report’s methodology has been criticised as being overly
one-sided, favouring the opponents of the right.24
Pursuant to the introduction of EU legislation in 2001, several attempts were made in the US
to revive the issue. In December of 2011 a droit de suite bill, The Equity for Visual Artists
Act 2011,25 was introduced by Jerrold Nadler, the ranking member of the House Judiciary
Subcommittee on the Constitution and in the Senate by Senator Herb Kohl. On the 6th of
January 2012 the House Committee on the Judiciary referred the Bill to the Subcommittee on
Intellectual Property, Competition and the Internet. On September 19, 2012, the US
Copyright Office, at the request of Congress, issued a Notice of Inquiry seeking public
comment on the proposed Bill. The purpose of the Inquiry was:
to review how current copyright law affects and supports visual artists; and
how a federal resale royalty right for visual artists would affect current and
future practices of groups or individuals involved in the creation, licensing,
sale, exhibition, dissemination, and preservation of works of visual art.26
Comments from stakeholders across multiple jurisdictions were received, including: auction
houses, galleries, museums, art collectors, artists, collecting societies etc.27 Members of the
public had until December 5th to submit comments:
21 United States Copyright Office, ‘Copyright Office Hearings on the Dr oit de suite’ (1992) 16 Columbia-VLA
Journa l of Law and Arts, 185.
22 Copyright Act of 1976, P ublic Law No 94-553, 90 Stat 2541(for the general revision of copyright law, title
17 of the United States Code, and for other pur poses) (19 October 1976).
23 Nobuko Kawashima, ‘The droit de suite controversy revisited context, effect and the price of art’ (2006) 3,
IPQ 223-255, see also The US Register of Copyrights’ Report on Resale Royalties (1 December 1992).
24 Shira Perlmutter, ‘Resale Royalties for Artists: An Analysis of the Register of Copyrights' Report’ (199 3) 40
J Copyright Society, 284. Carol Sky,’ Report of the Register of Copyrights Concerning Dr oit de suite, The
Artist's Resale Royalty: A Response’, (1993) 40 J Copyright Society 315.
25 United States - House of Representatives 3688 (112th): Equity for Visual Artists Act of 2011, Senate 2000
(112th): Equity for Visual Artists Act of 2011.
26 Notice of Inquiry, Resale Royalty Right, 77 Fed. Reg. 58175 (Sep. 19, 201 2). The original comment period
was extended from November 5 to December 5. Extension of Comment Period: Resale Royalty Right, 77 Fed.
Reg. 63342 (Oct. 16, 2012).
27 United States Copyright Office Website accessed 20 February 2013.
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on the means by which visual artists exploit their works under existing law as
well as the issues and obstacles that may be encountered when considering a
federal resale royalty right in the United States.
At the time of writing this paper the Equity for Visual Artists Act 2011 remains at the early
stages of the legislative process. Introduced bills and resolutions first go to committees that
deliberate, investigate, and revise, before they go to general debate. It should be noted that
the majority of bills and resolutions never make it out of the committee stage.
That which follows is a brief look at the practical application of the droit de suite in the EU
as compared to the proposed application of the right under the US Bill. The comparison will
illustrate certain conceptual differences between these two trading blocks regarding the
economic and moral basis of the droit de suite.
D DROIT DE SUITE – A COMPARISON OF THE IMPOSED AND PROPOSED
PRACTICAL EFFECT OF THE ACT
28
1 Who Pays?
In the EU, Article 1 of Directive 2001/84 states that the royalty shall be payable by the seller
but Member States may provide that buyers, intermediaries; such as art market professionals,
salesrooms or galleries,29 and any dealers in works of art shall be liable or share liability with
the seller for payment of the royalty.30 In Ireland the royalty is solely payable by the seller.31
The Directive states that 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 three years before that resale and where the resale
price does not exceed €10,000.32
This was adopted directly into the Irish Regulations.
28 The lay-out has been adopted from Pierre Valentin, ‘Dr oit de suite’ (2006) 28(5) EIPR 268.
29 Council Directive (n 14) Art 1(2).
30 ibid. Art 1(4).
31 SI 312/2006 – European Communities (Artist’s Resale Right) Regulations 2006, 7(1).
32 Council Directive (n 14) Art 1(3).
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In the EU, the royalty is payable by the seller acting as an art market professional, private
sales excluded.
33 Under the US Bill the right only applies to auction houses with sales of
over €25,000,000 in the previous year.34
Section 3(2) of the US Bill, Equity for Visual Artists Act 2011, states that sales at public
auction of a work of visual art by someone other than the artist who is the author of the work
shall be liable to pay the royalty.35 This is qualified by Section 2(1) of the Bill, which defines
an auction as:
meaning a public sale run by an entity that sells to the highest bidder works of
visual art in which the cumulative amount of such works sold during the
previous year is more than $25,000,000 and does not solely conduct the sale of
visual art by the entity on the Internet.36
In both the EU and the US the droit de suite is calculated as a percentage of the sale price of
the work irrespective of whether the work appreciated in value. This is interesting
considering that ‘[t]he rationale for the droit de suite lies in the considerable increases in the
value of works of art, increases which benefit only the owner, the artist being ignored.’37 In
1926, Czechoslovakia introduced the droit de suite on the basis that it would apply to the
appreciated value only.38
This perfectly harmonised the rationale for the droit de suite with its practical
implementation,39 however this method failed as its implementation proved too difficult:
33 Article 1 of Directive 2001/84 states that the royalty shall be payable by the seller but member states may
provide that buyers, intermediaries - such as art market professionals, salesrooms or galleries, and an y dealers in
works of art shall be liable or share liability with the seller for payment of the royalty. In Ireland the royalty is
solely payable by the seller. The European Community Regulations state that member states may pro vide that
the right ‘…shall not apply to acts of resale where the seller has acquired the work directly from the author less
than three years before that resale and where the resale price does not exceed €10,000.’ This was adopted
directly into the Irish Regulations.
34 Artists Act (n 25) s 2(1).
35 ibid. s 3(2), ‘Whenever a work of vis ual art is sold as the result of auction of that work by someone other than
the artist who is the author of the work, the entit y that collects the money or other consideration paid for the sale
of the work shall, within 90 days of collecti ng such money or other consideration, pay out of the proceeds of the
sale a royalty equal to 7 percent of the price.’
36 Artists Act (n 25) s 2(1).
37 Liliane de Pierredon-Fawcett, ‘The Droit de suite in Literary and Artistic Property’, A Compara tive Law
Study (Louise-Martin Valiquette Translation ) (New York Columbia University 1991) 4.
38 Law of Nov 24, 1926, art 35.
39 Valiquette Translation (n 37) 5.
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The droit de suite thus turned out to be a prisoner of its own logic. When
based on a participation in the sale price, it was criticised for departing from
its own rationale. When based on a participation in appreciation, it was
impracticable.
40
In both the EU and the US the droit de suite has been subsumed within the author’s economic
rights thus resolving previous difficulties regarding the harmonisation of theory with practice.
These rights are based on the author receiving a percentage of the exploited price and not a
percentage of the appreciated value of the work. In this way rights of reproduction, for
example, and the droit de suite are analogous in that remuneration is received from each
exploitation. This reconciles the theoretical basis of the right with its practical application and
overcomes earlier criticisms.
2 Who Receives?
In the EU Article 6(1) of the Directive states that; ‘The royalty … shall be payable to the
author of the work and, subject to Article 8(2), after his death to those entitled under
him/her.’41 Article 8(2) states that those Member States which did not allow for the resale
right at the time of implementation of the Directive, ‘…shall not be required, for a period
expiring not later than 1 January 2010, to apply the resale right for the benefit of those
entitled under the artist after his/her death.’42 Article 8(3) extends this period for a further two
years where such time is needed for reasons of ‘economic viability’ and to allow the Member
State ‘…adapt gradually to the resale right.’43 In Ireland SI 312/2006 enforced the right for
living artists, and on the 1st of January 2012, the Regulations were amended by SI 709/2011
which extended the right to the estates of deceased artists.44 Ireland took the longest time
possible to fulfil its requirements but interestingly did not limit the transmission of the right
solely for the benefit of the heirs of the artist. The resale right is for the life-time of the artist
plus 70 years.
40 ibid.
41 Council Directive (n 14) art 6(1).
42 ibid. Art 8(2).
43 ibid. Art 8(3).
44 SI 709 2011, 2(b): ‘Transmission of resale right. Notwithstanding Regulation 4, resale right is tra nsmissible
by testamentary disposition or in accordance with the rules of intestate succession as personal or moveable
property.’
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3 Which works of art are protected?
The EU Directive states that:
original work of art’ means works of graphic or plastic art such as 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.
45
It further states that:
copies of works of art covered by this Directive, which have been made in
limited numbers by the artist himself or under his authority, shall be
considered to be original works of art for the purposes of this Directive. Such
copies will normally have been numbered, signed or otherwise duly authorised
by the artist.46
Interestingly, there appears to be no limit to the number of copies that an artist can make and
the remit of the term, ‘under his authority’ is not defined. 47 On this issue the Irish
Regulations do not give a definition but Section 2(2) refers to the Council Directive and
states that ‘… a word or expression that is used in these Regulations and in the Council
Directive has, unless the contrary intention appears, the meaning it has in the Council
Directive.’48 Therefore, it would appear that the Irish provisions apply a similarly expansive
scope to what constitutes ‘original work of art’.
The US schema,49 defines a ‘visual work of art’ under the remit of the Bill as:
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
45 Council Directive (n 14) art 2(1).
46 ibid. art 2(2).
47 Valiquette Translation (n 37) 269.
48 SI 312 (n 31) 2(2).
49 Artists Act (n 25) s 2(5)(1).
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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.
50
It would appear that the US Bill is far more restrictive than the EU Directive, both in terms of
the type of art and the number of copies that are protected by the droit de suite. It is possible
however, that the remit of the right will expand through the case law as the courts apply a
broad interpretation to the meaning of ‘works of art’ as has occurred in Europe since the
1920s.
It could be argued that a limit on the number of copies considered to be ‘original’ reflects the
personal rather than economic nature of the right. Economic rights of reproduction and
performance do not set a cap on the amount of copies or the level of remuneration that can be
earned by the author from his work. To encompass the droit de suite within authors’
economic rights but to limit their exploitation seems at variance with the nature of such rights
(conversely the argument runs that visual artists’ economic rights, in the form of publishing
royalties, are already adequately protected and there is no limit to the number of copies that
can be produced and royalties derived). However such a limit cannot rest soundly upon
authors’ economic rights, which by their very nature are non-exhaustive. It is therefore
submitted that any compromise or limit in the number of ‘originals’ can only be justified
within moral rights theory. To allow unlimited ‘originals’ is to dilute and extinguish the
personal connection between the artist and his work. It also creates problems for the market
where identical copies and identical originals exist in tandem. It is submitted that while the
droit de suite has been subsumed within copyright and authors economic rights, the droit de
suite’s moral rights basis can never truly be expunged. To do so would present an absence of
justification for limiting authors’ exploitation of the original/originals. The moral rights
element thus survives, if only to circumscribe the droit de suite.
50 ibid.
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4 Exempt transactions
In the EU there are four exemptions to the Resale Right:
1) persons acting in their private capacity without the participation of an art
market professional.
51
2) acts of resale by persons acting in their private capacity to museums
which are not for profit and which are open to the public.52
3) art galleries which acquire works directly from the author … which take
place within three years of that acquisition. 53 However, this final
exemption is limited to works where the resale value does not exceed
€10,000.
4) Where the sale price is less than the stated threshold which Member States
can set at €1,000 but no greater than €3,000.
The Irish Regulations are almost identical with just two small variations: firstly; the highest
threshold of €3,000 was applied, and secondly; with regard to the private sale exception, this
was rephrased to exclude sales not conducted by sellers, buyers or agents, ‘acting in the
course of a business in works of art.’54
The US Bill provides for the following exceptions:
1) Sales concluded in auction houses where annual sales are less than $25
million in the previous year.
2) Auction houses that only operate in the on-line environment would also be
excluded.
3) Works sold for less than $10,000. The exceptions under the US Bill are
far wider than under the EU legislation and have the effect of excluding a
far greater number of artists.
51 Council Directive (n 14) Recital 18.
52 ibid.
53 ibid.
54 SI 312 (n 31) s 5(2)(a).
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The potential limiting effect of this US approach is mitigated by the income distribution
mechanism, which will be discussed below. In addition an EU threshold of €3,000 in some
Member States is more likely to exclude a greater number of early career artists.
5 At what rate?
Both in the EU and in Ireland the droit de suite or artists resale royalty rate is as follows:
4% for the portion of the sale price up to €50,000,
3% for the portion of the sale price from €50,000.01 to €200,000,
1% for the portion of the sale price from €200,000.01 to €350,000,
0.5% for the portion of the sale price from €350,000.01 to €500,000,
0.25% for the portion of the sale price exceeding €500,000.
The effect of the apportionment is that where a work of art sells for €600,000, for example,
the subsequent royalty will be made up of all five royalty bands. 4% on the first €50,000 =
€2,000 + 3% on the portion between €50,000.01 and €200,000 = €4,500 and so on. There is
however a cap on the amount that artists can earn from this royalty and this is set at €12,500.
The US Bill is far less convoluted. It simply outlines that 7% applies to sales above $10,000,
conducted through a qualified auction.
55 50% of the net royalty goes to the artist or his or her
successor as copyright owner. After payment to the artist or his or her successor as copyright
owner, the remaining 50% of the net royalty shall be deposited into an escrow account
established by the collecting society. This part of the royalty will be used by non-profit art
museums in the United States to purchase works of visual art authored by living artists
domiciled in the United States.56
It should be noted that the income distribution model is not a new concept for the droit de
suite, for instance in Germany a share of the royalty is paid into a fund which supports
55 Artists Act (n 25) s 2(1) Previous year annual sales over $25,000,000.
56 ibid. s 3(2).
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elderly artists, in Finland and Sweden, it is used to support young artists.
57
The escrow account mechanism overcomes one of the fundamental criticisms of the right –
that it only benefits artists later in their careers when they do not need financial assistance. In
addition it secures an income for early career artists when it is most needed.
The US policy decision to encompass an income distribution mechanism in the resale royalty
is reflective of the origins of the resale right. The welfare premise of the right has arguably
been expunged in EU states where a resale threshold of €3,000 has the effect of excluding
nascent career artists, the modern day embodiment of Forrain’s ‘starving artist’.
Despite this profit sharing arrangement, without a royalty cap, the US artist has the potential
to earn much higher royalties than his/her EU counterpart. Price observes that this device
serves one of the primary objectives of droit de suite, namely, subsidising the ‘gap in
understanding.’58 This gap refers to the time between when an artist produces work and
when the market finally appreciates their work. This benefits artists by securing higher prices
for their work earlier in life, but it also benefits society by allowing for earlier understanding
through exposure.59
The US Bill demonstrates awareness that where a tax is placed on a purchaser of art, it does
not necessarily follow that the proceeds of the tax should go to the particular authors or artist
that created the work.60 It has long been observed that government policies better serve
society if more as opposed to fewer citizen benefits.61 This was an ideal rooted in Abel
Ferry’s address to the Chambre des Desputes in 1914,62 when he petitioned legislators for the
droit de suite.
57 Victor Ginsburg, ‘The Economic Consequences of dr oit de suite in the European Union’ (2006) 35 Economic
Analysis and Policy, 1&2.
58 Monroe E. Price, ‘Government Policy and Economic Security for Artists: The Case of the Droit de suite’
(1968) 77 The Yale law Journal 7, 1356.
59 ibid.
60 ibid. 1348.
61 ibid. 1352.
62 Abel Ferry, 1914 JO, Chambre des Deputes, Doc parl, annexe 3423, 150 et seq, 2nd Session of January 23,
1914.
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6 Calculation basis of the resale right?
In Ireland and the EU the sale price is net of tax.
63 Neither the Directive nor the Irish
Regulations say whether the basis of calculation includes art market intermediaries’
commission. In the UK, the patent office suggests that the basis of calculation should be the
hammer price or ticket price; however that interpretation is not binding.64
The US Bill refers to the ‘net royalty’ and this means:
the royalty amount collected less administrative expenses of the visual artists’
collecting society. In no case shall the administrative expenses of the visual
artists’ collecting society subtracted from the royalty amount collected exceed
18 per cent.65
The US Bill does not state whether the droit de suite calculation is based on the sale price
inclusive or exclusive of tax.
Overall, the underlying policy concerns of the US schema seem to embody the idea of the
powerless artist as against empowered market agents. The Bill’s drafters are clearly
cognisant that the introduction of a second layer of art intermediary could negate the effect of
the resale royalty.
7 Who Collects?
In the EU, Member States may provide for compulsory or optional collective management of
the royalty.66 In Ireland the Irish Visual Artists Rights Organisation (IVARO) was established
as a collecting society. However no reference has been made to the society in the
implementing Regulations. As a result artists may elect to avail of collective management
through IVARO or collect personally.
63 Council Directive (n 14) art 5.
64 Valentin (n 28) 269.
65 Artists Act (n 25) s 3(b)(1).
66 Council Directive (n 14) art 6(2).
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The US Bill states that:
[s]uch royalty shall be paid to a visual artists’ collecting society. The
collecting society shall distribute, no fewer than 4 times per year, 50 per cent
of the net royalty to the artist or his or her successor as copyright owner.
67
It would appear that because of the income distribution element and the resulting need for
transparency and traceability, collection via a collecting society would be mandatory.
8 Right to Information
Recital 30 of the EU Directive states that:
Appropriate procedures for monitoring transactions should be effectively
applied by Member States. This implies also a right on the part of the author
or his authorised representative to obtain any necessary information from the
natural or legal person liable for payment of royalties. Member States which
provide for collective management of the resale right may also provide that
the bodies responsible for that collective management should alone be entitled
to obtain information.
There is no equivalent provision in the US Bill.
9 Right to Waive and Assign
It should also be noted that in the EU the droit de suite is not assignable, is inalienable68 and
cannot be waived. Under the US Bill the right cannot be waived.69 The US Bill appears to
allow the artist to assign their right to receive a royalty but there still remains an obligation to
pay 50% of the royalty into an escrow account, breach of this constitutes an infringement of
US copyright law.
67Artists Act (n 25) s 3(2).
68Council Directive (n14) Recital 1.
69Artists Act (n 25) s 3(2), ‘The right to receive such royalty and the obligation to deposit the r emaining share of
sale proceeds into the escrow account provided in this subsection may not be waived by the artist or his
successor as copyright owner.’
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It can be seen from the above that the EU Directive enshrines a distinctly paternal approach
to the welfare of visual artists. Conversely the U.S Bill allows an artist to freely assign his
property thus maintaining perceptions of a free market economy.
70 However the percentage
of the royalty to be paid to the escrow account cannot be weighed, therefore retaining some
element of the traditional paternalistic nature of the right. Arguably the US Bill strikes a
more appropriate balance between a desire to protect visual artists by providing them with
adequate income for their work and the reluctance of the state to interfere with the consensual
contract model.
10 Availability of the Right to artists from other countries
Article 7 of the EU Directive allows nationals of third countries to avail of the right on the
basis of material reciprocity. Article 6 of the Irish Regulations state that the ‘… resale right
may be exercised in respect of a sale only if the author of the work is, on the contract date of
the sale, a national of a member State, Iceland, Liechtenstein or Norway.’71 The Berne
Convention for the Protection of Literary and Artistic Works provides that the resale right is
available only if legislation in the country to which the author belongs so permits. The right
is therefore optional and subject to the rule of reciprocity.
The current draft of the US Bill does not make any comment on the applicability of the right
to artists from other countries. As the right is framed within US copyright law and as the US
is a member of the Berne Convention, it may be presumed that the right would extend to
artists of other nations in the same way as rights of reproduction and performance.
11 Droit de suite & Succession
In the EU Article 6(1) of the Directive states that; ‘[t]he royalty … shall be payable to the
author of the work and, subject to Article 8(2), after his death to those entitled under
him/her.’72 Member states decide whether the right is passed onto the artist’s heirs or
70 ibid. s 3 of the US Bill states that the right to receive such royalty cannot be waived by the artist or his
successor as copyright owner. Recital 1 of the EU Directive states that the right is unassignable and unwaivable.
Section 4 of the Irish Regulations repeats this but go on to say that, a charge on a resale right is void, a waiver
has no effect and that an agreement to share or repay resale royalties is void.
71 SI 312 (n 31).
72 Council Directive (n 14) art 6(1).
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successors.
73
Section 3(2) of the US Bill stipulates that:
[s]uch royalty shall be paid to a visual artists collecting society … [t]he
collecting society shall distribute … 50 per cent of the net royalty to the artist
or his or her successor as copyright owner.
The Bill does not expressly state whether the right passes to the authors’ heirs therefore it
must be presumed that the rules on succession apply and any entity or person may come to
own the right.
12 The Moral & Economic debate
As previously noted, the droit de suite derives from the French civil law system where it is
defined as a personal right, based on an intrinsic link between the artist and his work. ‘The
painting as object is imbued with the personality of the artist as subject, whose thought it
expresses in shapes and colours.’74 In essence the work is the personification of the artist.75
Moral rights protect this personal link and inform the resulting nature and use of the droit de
suite. This moral character has been reflected in the legislation of many States over the
years. For instance, in Ireland, the droit de suite cannot be waived or assigned to another
person or entity. The question that follows is, how ought the right be dealt with after death?
Should it remain exclusively with the artists’ heirs or be freely assignable like ordinary
property? Can an unfettered transmission of the right upon death be justified? Surely this
would negate the welfare premise of providing financial support for the artist and his family?
Such a debate arose in the EU when works by Salvador Dali were sold by a French auction
house. Under French law the droit de suite can only benefit the artist and his heirs; therefore,
the resulting income was given to the heirs of the artist. Complications arose where the artist
had bequeathed his estate to the Spanish Government thus making the Spanish State his
73 Note, Ireland took the longest time possible to fulfill its requirements but interestingly did not limit the
transmission of the right solely for the benefit of the heirs of the artist. The resale right is for the life -time of the
artist plus 70 years.
74 Vergnaud, ‘Les droits du peintrre sur son oeuvre’ (1966) Juris-Classeur Pério dique I No 1975, quoted by
Valiquette Translation (n 37) 26.
75 Valiquette Translation (n 37).
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successor in title. The European Court of Justice had confirmed that each state could
introduce its own laws as to how its scheme operates. Under Spanish law, the fact that Dali
had left the rights to his works to the Spanish State meant that the State, rather than his family
members, was entitled to be paid upon resale. However, when items were sold in France, the
French collecting agency (ADAGP) applied French law and paid the monies to family
members. The ECJ and the Paris court held that Spanish law must prevail in the case and that
the Spanish State rather than the family members must benefit. The French regulations were
not applicable to the inheritances of foreign artists because these were regulated by the
inheritance law of their own country as per 14.ter of the Berne Convention.
76
The French scheme reflects the original moral right basis of the droit de suite while the
Spanish scheme reflects international recognition of the right as an economic entitlement.
This reflects what Pierredon-Fawcett has described as the dual nature of the right, 77
encompassing both a moral and personal right with an economic entitlement.
It would seem an oddity of the EU legislation that a right, which is inalienable during the life
of the artist, is then transmissible to persons and entities other than the author’s heirs. This is
not unusual in common law jurisdictions where the right has been seen as part of authors’
economic rights. The dr oit de suite is then similar to the reproduction or performance right,
allowing the artist to benefit from the exploitation of his work. If this is correct then what is
the common law basis of the right, considering that the artist’s economic rights of
reproduction are already provided for? Why should the visual artist be allowed a second bite
of the apple?
Pierredon-Fawcett suggests that the right is based upon the weakened bargaining position of
the artist:
[t]he protection that the legislature intended stems from the character of the
person holding the right, not because he is an artist but rather because of his
weakness in economic bargaining power.78
76 Fundació Gala-Salvador Dalí v ADAGP, Friday 8 July, High Court of Paris, see Fundació Gala -Salvador Dalí
News accessed 20 February 20 13.
77 Valiquette Translation (n 37).
78 ibid. 33.
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To suggest that all artists are poor negotiators would be to do them a disservice. This
weakness in economic bargaining power may be better characterised as a weakness in the
mode of creation rather than any personal attribute of the artist. For artists the mode of
creation, paint to canvas for instance, fuses ‘the creative work’ with its material support and
they are hence forth inseparable.
79 The material support for the writer or the composer is not
so entwined as to render it irrelevant to these authors whether they first write their works on a
napkin or on a laptop. The intangible nature of the ‘work’ can be enjoyed, whether in digital
form or hard copy. The artist on the other hand cannot transfer ‘the work’ to other mediums
without losing the essence of the original or without fundamentally changing it. Equally the
public does not gain the same appreciation from a post card containing an image of a Rothko
as against standing in the presence of the original. The actual weakness in bargaining
position is due to the limited exploitative nature of the mode of creation for visual artists.
The work can only be sold by the artist once. The droit de suite thus allows the visual artist to
improve his position by allowing participation in the resale price of the work.
Whether the right is seen as moral or economic in nature, both jurisdictions base the right on
the fact that visual artists cannot adequately avail of traditional author’s rights to the same
extent as other creators. The aforementioned is exemplar of how the right has been
transformed as it traversed jurisdictions, thus reflecting the divergent theoretical nature of the
right.
E FUTURE CONCERNS
Article 11 of the 2001 Directive required the Commission to submit a report on the
implementation and effect of the Directive to the European Parliament, the Council and the
Economic and Social Committee not later than 1 January 2009. It was not until December of
2011 that the Commission issued the Report.80
The Report showed that since the harmonisation of the right in 2006, the E.U art market had
decreased in terms of value, and global market share. Attributed to this were factors such as
79 ibid. 27.
80 Report from the Commission to the Europea n Parliament, the Council a nd the European Economic and
Social Committee: Report on the implementation and effect of the resale r ight directive (2001/84/EC) Brussels,
14 December 2011 COM (2011) 878 final.
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the global economic downturn and the growth of China’s art market.
81 Both causes are
arguably justifiable as they had a relative impact on comparator countries such as the US and
Switzerland. The Commission drew from this that:
[n]o clear patterns [could] be established to link the loss of the EU's share in
the global market for modern and contemporary art with the harmonisation of
provisions relating to the application of the resale right in the EU on 1 January
2006.82
Prior to the introduction of the droit de suite, concerns were raised that the right would cause
art market dealers to move sales of fine art to jurisdictions where the right did not apply. In
fact there is some evidence that this was a valid concern.83 On this point the Report states
that:
[no] clear patterns [can] currently be established that would indicate
systematic trade diversion within the EU away from those Member States
which introduced the right for living artists in 2006.84
However, the report also found that since the harmonisation of the right in 2006 the UK had
lost market share while markets such as France and Germany had increased.85 This may not
be an example of ‘systematic trade diversion’ but it is indicative of an expected reaction to
internal market harmonisation. The greater concern relates to any form of trade diversion to
outside of the EU.
The Report also notes that at the time of publication, full implementation of the droit de suite
throughout the EU had not occurred. Member States such as Ireland and the UK had not
81 ibid. 10. A growth from 5% to 25%.
82 ibid. 10.
83Société d’auteurs S v Hotel des Ventes Mosan, Civ. Brussels, April 30, 1999.
The case is available from the French collecting society ADAGP at accessed 20 February
2013. In 1995, the Hotel des Ventes Mosan SA, a Belgian firm of auctioneers, held an auction in Liége,
Belgium, of three paintings which were located in Luxembourg at the time and shown on a televisio n screen to
the audience attending the auction in Liége. A Belgian artists’ collecting society claimed pa yment of the Belgian
resale right over the sale proceeds of the three paintings sold in Luxembourg. Four years later, when the dispute
was finally tried, the Belgian court held that the Belgian resale right was payable on the sale price o f the three
paintings because they formed part of an auction organised in Belgium and the co nnection with Luxembourg
was ‘artificial’.
84 Commission Report (n 80) 10.
85 ibid. 6.
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extended the right to include the estates of deceased artists. This category represented a large
percentage of eligible art market sales; 82% by value and 71% by volume.
86
F CONCLUSION
The effect of full implementation of the droit de suite on the EU art market should not be
underestimated. If ‘systematic trade diversion’ to markets outside of the EU were to occur
then it would be after the derogation periods ended in 2012. At the time of writing this paper,
only 12 months after the derogation periods had ended, data to support such a view is limited
and ultimately inconclusive. A follow on report is due from the Commission in 2014 and it is
only then that the full effect of the droit de suite on the EU art market will be seen.
Regarding the 2014 Report, what is of greatest concern is that the US could once again adopt
a ‘wait and see’ approach to the droit de suite. Were this to occur it would almost inevitably
lead to the current Bill failing to move past the committee stage. If data were found to show
that the US art market was in fact benefiting from the EU’s full implementation of the droit
de suite, the fate of the droit de suite in the US would be surely sealed.
Finally, the droit de suite is seen by many as a further encroachment of copyright law on the
free market. And while it attempts to alleviate a market failure to make socially beneficial
activities financially viable, it may prove to be a step too far. The flight of art market sales to
jurisdictions where the right is not recognised, may result in a market reaction that EU
macro-economic policy cannot ignore. If this were shown to be the case, could the EU in its
current weakened economic condition sustain such a loss? There is however, to date, no
conclusive data to support this view and any loss in market share may be a temporary
phenomenon experienced during any market transition. Irrespective of this, for the droit de
suite is to survive in the global market, its adoption by the US amongst others is an
imperative that cannot be ignored.
86 ibid. 10. Heirs account for a much larger portion of sales eligible for the resale right, making up 82% of
eligible sales by value, 71% by volume, and 63% of beneficiaries.
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