Towards universal resale rights…

[10 May 2017]

Artist’s resale rights are a key theme at the WIPO (World Intellectual Property Organization), and this month the organization hosted an international conference to discuss the universal extension of these rights (International Conference on Artist’s resale right on 27 and 28 April 2017, WIPO, Geneva).

Artist’s resale rights were first implemented in France in 1920 after public opinion was moved by a poignant story involving the children of the painter Jean François MILLET (1814-1875). Shortly after WWI, Millet’s children apparently discovered the sale of a masterpiece, the Angelus, acquired from their father for 1,200 francs, and being resold for the very considerable sum at the time of a million francs. According to the story, one of the children exclaimed “Look! that’s daddy’s painting” and the contrast between the child’s poverty and the new-found wealth of the seller seems to have prompted the legislation. Today, the law defends the interests of artists and their beneficiaries by providing them with rights to a royalty on resale prices and is now applicable in more than 70 countries. The royalty is calculated on all resales exceeding 750 euros (about $800) using a cumulative degressive scale (with rates ranging from 4% to 0.25% depending on the resale price) and is capped at 12,500 euros.

The Artist’s Resale Right (ARR) is therefore designed to protect the interests of artists and their beneficiaries when works are resold. It is defined as the right of an author of an original two- or three-dimensional artwork to receive a percentage of the price obtained on any subsequent resale of the work. The artist’s beneficiaries also benefit from the resale of artworks until 70 years after the artist’s death. The Intellectual Property Law which defines the ARR in France stipulates that the relevant artworks include paintings, collages, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware, photographs and audiovisual artworks on digital or non-digital formats. Works created in limited series under the control of their authors are considered original works of art, as defined above, if they are numbered or signed or otherwise duly authorized by the author (transposed from the EU Directive into French law under Article R.122-3 of the Code de la propriété intellectuelle).

Critics of this law have suggested it could distort competition by pushing the art market towards countries that do not apply resale rights. However, a recent study by economist Kathryn Graddy and published by the WIPO conference shows that the implementation of this law has had no negative impact on the market, with countries applying it not suffering any reduction in ARR-eligible transactions.

Paid by the seller, the ARR works effectively in many European countries and the UK. But it is still not applied in a number of leading art market countries. The United States is particularly behind in this area and China’s artists and beneficiaries do not seem to appreciate the importance of copyright issues… unlike the French. In other countries, information concerning artists’ rights appears to be poorly publicised, particularly in Japan where a resale right, although enshrined optionally in the Berne Convention for the Protection of Literary and Artistic Works signed in 1899, is not claimed by artists because they are under-informed.

Today, according to Artprice’s econometrics department, resale rights could theoretically be applied to almost half of all secondary market transactions, i.e. in 2016, roughly $6 billion in auction turnover and roughly 17,000 artists… many of whom happen to be American and Chinese…