Artists’ Resale Rights: What? Why? How?
Introduction
Appearing first in France in 1920, Droit-de-suite, or, Artist Resale Rights is a moral right that is also vindicated as an economic right as well as an extension of the personhood theory of copyright, which claims that the creator of a work holds onto some property interests in the work as it is a part of their personhood. Moral rights allow artists to receive royalties for subsequent sales of their works and are inalienable, unwaivable, and non-assignable.
This right is restricted to visual artists as they cannot benefit from derivative or reproducible income that is characteristic of writers, filmmakers or musicians, who can earn regular incomes from screenplay-rights or soundtrack-licencing, for example. Further exasperating this division is the art industry’s affinity of uniqueness, on which it places a premium. This ‘premium of uniqueness’ is a curate’s egg in that visual artists are not able to benefit from derivatives or reproductions of their work which tends to enjoy appreciation in value over time. Sans droit-de-suite, artists are devoid of any benefits from the rising value of their works. This has been a chief reason for its growing international adoption.
Following France, Belgium (1921) and Czechoslovakia (1926) legislated similar rights. By 1948 many other countries showed significant interest and the ‘Berne Convention for the Protection of Literary and Artistic Works’ was amended to include resale royalty rights for artists and their works with the addition of Article 14ter. The right is not mandatory and relies on participating countries to pass their own laws on the matter which has seen slow implementation.
Given its moral and economic aspects, artist resale rights present both opportunities and challenges. A hundred-years after the first passing of the law, any assessment of it demands a look into the various advantages and disadvantages of the droit-de-suite.
Arguments For Artist Resale Rights
Intrinsically, the rights conferred under droit-de-suite aim to provide artists and their heirs the opportunity to reap financial benefits attached to future sales of works. As such there are several arguments supporting it.
The first-and-foremost benefit is economic by providing artists with a source of future income for past works. This allows artists to focus on ongoing projects with reduced pressures of sustaining themselves or helps estates of artists to accomplish their objectives. Meret Meyer, granddaughter of Marc Chagall, speaks of the “ crucial importance ” of the right in funding the work of the Marc Chagall Committee in cataloguing and tracking the artist’s works and helps them tackle counterfeits by funding investigations contributing to universal artistic heritage.
Proponents have cited that even though the majority of eligible artists receive small royalties, they customarily reinvest those funds into ongoing projects to purchase equipment or materials, for example. There have also been arguments that royalties provide an intangible psychological benefit, where artists value the validation of their creativity being awarded by royalty payments in-addition to the economic aspects of it.
Having systems in-place that track artist’s works and the market values they achieve provides benefit to the art world as it allows for authentic and verifiable provenance. This leads to more transparency in the art market which is characteristically opaque and secretive. The art market as it exists features a highly imbalanced ecosystem that has provided auction houses, galleries, private collectors and museums with extreme wealth and influence. These rights give agency to the artists who have traditionally been at a bargaining disadvantage against these institutions.
Under the concept of ‘reciprocity’ mentioned in the Berne Convention, countries that have legislation on artist resale rights respect the rights of foreign artists for sales occurring on their soil, this allows artists to benefit from sales of their works not only in their own countries but in foreign countries that respect the reciprocity.
Arguments Against Artist Resale Rights
There exist arguments against resale rights as well. Continuing with the notion of reciprocity, the Berne Convention does not enforce any stipulated rules for countries to adopt which has resulted in no regularised framework across the world. The fragmented nature of international adoption means artists can exercise their rights only in countries with reciprocal rights arrangements. Amongst others, two major art markets, United States and China, do not possess artist resale rights meaning artists and their heirs cannot benefit from sales of their works in those countries, pointing to the need for harmonisation in the fractured international market.
Detractors of the rights often point to the cumbersome administrative burdens of implementation. This includes the efforts of creating a legal framework and ensuring meaningful compliance of all parties. Another aspect concerns establishing structures to undertake the arduous tasks of tracking, locating and distributing royalties. While existing administrative schemes, such as collecting societies, already exist, they often lack transparency and are riddled with internal politics and red tape.
Several studies show that royalties remain limited to relatively famous artists with a majority of payments being made to heirs and estates as opposed to living artists. Law professor Sam Ricketson admits that royalty rights are indeed “open to the objection that sums collected tend to be relatively small and concentrated among a narrow band of artists and their descendants.”
The rights are based on the assumption that all works appreciate over time, however, the art market is volatile causing works to depreciate in value as well. Already riddled with high transaction costs, resale rights only add to them, raising costs inhibitively for future sales. Artists cannot benefit from the right if their works depreciate or not sell at all.
Impact of Artist Resale Rights on the Art Market
As a platform for sales, the art market is a tiered system; the primary art market, for instance, is where creators directly sell their works to buyers, who may be dealers or collectors. The secondary art market, for instance, is where dealers or galleries sell works to other dealers, collectors, or museums. Opponents of droit-de-suite presume that the resale royalty will have a detrimental effect on the primary and secondary art markets.
As droit-de-suite is intrinsically linked to artists and their buyers, a study of the impact of resale rights on buyers in primary art markets would shed-light on the efficacy of the right itself. The first point raised by opponents is that buyers will demand lower sale prices to compensate for the risk that they may one day pay resale royalties back to the artist in the secondary market.
Moreover, as the rights are inalienable and non-assignable artists cannot waive their right for higher first sale prices. This would lead to a scenario where all artists would have to reduce their prices while only few ‘successful’ artists will have the opportunity to earn back a percentage through the resale royalty.
This means that costs of the royalty at the primary market level would outweigh the benefits given to the few artists. The European Union has established a few mechanisms as a reproach, by offering tiered royalty rates that decrease as the value of the work increases along with lower threshold rates. These mechanisms contribute to making the droit-de-suite more equitable by opening them up to more artists across the primary and secondary markets.
Fundamentally it must be asked if the amount artists are able to earn from the rights and the royalty are enough to justify their existence or if they contribute significantly to the art market at-large.
About the author: Indraneel Banerjee is an MBA in Art and Culture Management from IESA Arts & Culture, Paris. Having a foundation in Psychology, Communications and Culture, he is Trustee of Udayan and Founder of Cultur·Able, a platform on Accessibility and Inclusion in Culture
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