Droit de suite
The resale right or droit de suite is the most important copyright for authors of fine art. Unlike writers and composers who have a regular income from royalties which are due whenever their works are performed or published, artists depend primarily on the selling of original works and, therefore, --without the resale right--would be excluded to benefit from subsequent increase in value of their works.
Artists and their associations together with the collecting societies for visual artists have been lobbying for decades to harmonise the resale right within Europe which also leads to the introduction of the right in the UK, Ireland, The Netherlands and Austria as from 1 January 2006.
In Ireland IVARO, the new society for visual authors was launched in June 2005 with the clear perspective to manage the new right as from its expected introduction in 2006.
In April 1996 the Commission presented a proposal to harmonise the droit de suite within Europe. The Parliament voted with overwhelming majority in favour of the project in April 1997. The Commission presented its amended proposal in March 1998. Surprisingly the Council needed two more years to decide on the project. The Member States without a resale right were the strongest opponents. The UK played a key role because the London art market plays a major role in Europe and the two auction houses based in the UK, Sotheby's and Christie's hold 95% of the global art market. Still, the opposition against the introduction of such a fundamental right appears to be strongly exaggerated because only a small portion of this market deals with resale-right-eligible works, while the largest market share concerns antiquities, jewellery and personnel items of 20th century celebrities. Besides, a percentage of below 3% in average of the sales price while buyer's and seller's commissions reach up 30% appear to be far too low to have any influence on the choice of sales location.
It comes as no surprise that the introduction of import vat in the UK an additional cost factor of comparable dimensions had no impact on its lively art market
On 19 June 2000 the Council approved unanimously a common position on the proposed Directive. However, the Commission could not agree on the compromise because it was feared that the extremely long implementation term and other delays would set a precedent for Internal Market issues. In December of the same year Parliament proposed a number of helpful amendments, however a political agreement was only possible in the Conciliation Committee on 1 June 2001.
Parliament has endorsed the changes in its plenary session on 3 July 2001 by an overwhelming majority. Finally Council has adopted the Directive on 19 July 2001.
The Members States have to fix a threshold which defines as from which prices the realse right is applied. This threshold maybe defined below but not above € 3 000. The higher the application threshold the more living artists are excluded from the right. Surprisingly the UK - once fiercly fighting for the option of the high threshold in the Directive - has recently implemented a law with a threshold of only € 1 000. In April 2005 already the Culture Media and Sports Committee of the UK Parliament had urged the government in a report on the art market to inoduce the law in an author friendly way.
Although, the implementation term – that is the delay to introduce the directive's provisions into national legislation - expired on 31 December 2005 there are still several Member Countries which have not even tabled a draft law. We are expecting that the Commission will deal with these cases by use of all enforcing instruments. The long implementation term of 4 years for a comparably small law was the issue mostly critisised by the Commission.
Member States that introduce the right for the first time may exclude the works of deceased artists until 1 January 2010. This term may be prolonged for further 2 years. Such provision is a novelty to copyright where no such limits are known. Heirs of artists are treated like second class citizens. There is also a ceiling for the amount payable to an artist or heir introduced at € 12 500. In combination with the sliding scale of percentages on price bands the regulation has the effect that from a sales price of € 2 million the share for the author is frozen at € 12 500. It is the maximum amount an author may obtain, even if his or her work is sold at € 10 million for example.
The sliding scale of percentages on price bands also results in the effect that for instance for the price bands above € 500 000 the artists receives only € 250 (0,25%) on any additional amount of € 100 000 while the auction house might charge € 30 000 (30%) for the buyer's and seller's commission. Thus, the regulations discriminate unfairly against successful artists while successful auction houses and art collectors are allowed to make profit undreamed by such limits.
Related documents:
EVA report on management of droit de suite in the EU
Practical aspects in the exercise of droit de suite: study by Mr Gerhard Pfennig, Director General of the Society of Authors of Fine and Graphic Arts, VG Bild-Kunst, Germany, at the request of the UNESCO secretariat.
Press release on introduction of the resale right in the UK
Report of the UK DCMS on the art market
"Der Künstler schafft das Werk - nicht der Kunstmarkt": article published in Neue Züricher Zeitung from 23/08/2006 by Werner Stauffacher on the situation of Resale Right/Droit de Suite in Switzerland