This profile considers droit de suite, a royalty
for visual artists on the resale of artworks.
It covers -
The droit de suite aims to provide visual artists with
a share of revenue from sales of their work after
initial sale of that work to a dealer or other buyer.
It has been criticised as an inappropriate or ineffective
tax. It has also been characterised as a measure of justice
for creators and as an extension of intellectual property.
It is independent of droit moral - moral rights
schemes - that are based on respect for the artist's creativity.
Moral rights legislation is discussed here.
The resale right provides that visual artists or their
estates receive a royalty on the resale of artworks. That
royalty is usually between 3% to 5% of the price of the
work, with individual payments being made to copyright
collecting societies on behalf of the artists. (Some regimes
involve galleries and dealers paying 1% of their turnover
into a special fund. Some nations base the royalty on
the seller's profit rather than the price of the work).
It relates to public rather than private sales - eg by
dealers and auction houses rather than directly between
private individuals - and covers work above a specific
value. (Some benchmarks for Australian and overseas sales
An artist who originally sold a painting for a few hundred
francs might thus receive considerable royalties many
years later when the work is resold several times for
several million francs, sharing in the increased value
of the work and enjoying an ongoing incentive for creation.
The droit is concerned with the resale of physical entities
- for example canvas, a sculpture, a work on paper - and
is independent of reproduction rights (ie the artist's
licensing of intellectual property for use in posters,
Typically, artists sell the canvas, pigment or paper -
the embodiment of their creativity - but retain the intellectual
property. The droit allows artists or their estates to
snaffle between 5% and 0.25% of the price of the artwork
when the embodiment is resold, sharing in the increase
in value of the work over time. An Australian report,
for example, notes that Indigenous artist Johnny Warangkula
Tjupurrula sold one of his paintings for $150. At an auction
thirty years later that canvas went for $206,000; in 2000
it fetched around $500,000. (As at July 2007 the record
for auction of work by an Indigenous artist is Clifford
Possum Tjapaltjarri's 1977 Warlugulong, firs
sld for $2,500 in 1977 and auctioned for $2.4m in 1977).
Warhol's 'Lemon Marilyn' sold for US$250 in 1962, fetching
US$15m in 2007.
The droit lasts while a work is in copyright
(so there is no need to pay money to the estate of Rembrandt,
Raphael or Da Vinci on the increasingly rare occasions
when their works change hands).
It has been strongly opposed on economic grounds by some
dealers (eg UK galleries and auction houses argued vehemently
that it would disadvantage artists by discouraging sales),
on philosophical grounds as a social welfare measure unrelated
to copyright and on operational grounds as difficult to
First proposed in the 1860s, the droit was established
in France in the 1920s to assist the widows of artists
killed in the 1914-18 War. It supplemented a special tax
on the overall turnover of art dealers that has been used
for a special arts social welfare fund.
Droit de suite provisions were subsequently incorporated
into the copyright legislation of most nations in what
is now the European Union and reflected in the Berne Convention
for the Protection of Literary & Artistic Works, discussed
in our Intellectual Property guide.
The EU Resale Royalty Directive (discussed in the following
page of this profile) harmonises legislation in the various
EU states, including the UK.
The droit is a peculiarity that has not found much favour
in the US (although a form of the droit is in place in
California), Canada, New Zealand or Asia. In Australia
it was established by the Resale Royalty Right for
Visual Artists Act 2009 (Cth), in effect from 9 June
Application is discussed in the following page of this
Much of the debate about the droit has been polemical.
In practice the most serious argument against introduction
of the droit is uncertainty about whether it
Supporters acknowledge that although a resale royalty
regime has been operating in France and other nations
since at least the 1930s, the impact of those regimes
on the overall resale market, on the viability of dealers
and on the bottom end of the first sale market is unclear.
Agreed statistical information about which artists benefit,
how frequently, on what scale and with what effect is
Discussion has been vexed by disagreement about economic
models, motivation and philosophies. Particular issues
are highlighted in Creative Industries: Contracts
Between Art & Commerce (Cambridge: Harvard Uni
Press 2000) by Richard Caves, The State and the Arts
(Cheltenham: Elgar 1998) by John O'Hagan, The Economic
Structure of Intellectual Property Law (Cambridge:
Harvard Uni Press 2003) by William Landes & Richard
Posner, Muses and Markets: Explorations in the Economics
of the Arts (Oxford: Blackwell 1989) by Bruno Frey
& Werner Pommerehne and Playing Darts with a Rembrandt:
Public & Private Rights in Cultural Treasures
(Ann Arbor: Uni of Michigan Press 1999) by Joseph Sax.
Proponents have argued for the droit on several grounds.
One - sometimes characterised as the 'genius in the garret'
theory - is that great works are rarely recognised at
first sale, with the artist consequently being inadequately
rewarded and even dying in poverty.
Each generation - resellers and buyers - should accordingly
"make some reparation for the insensitivity of its
Another is that resale of artworks involves exploitation
of the artist, who creates a commodity that is profitable
for sellers and intermediaries but does not share that
profit. A royalty on resale enables the artist to share
the benefits enjoyed by the vendor, dealer or auctioneer,
insurer and other intermediaries in the distribution chain
in a way that is broadly analogous to licensing by literary
creators, composers and performers.
Advocates of 'intrinsic value' argue that the latent value
of an artwork at the time of first sale is realised through
resale. The royalty provides a mechanism through which
the artist (or estate) can share in realisation of that
latent value and thus have an incentive for creativity.
The absence of hard data has strengthened criticisms that
include claims that any scheme will be administratively
cumbersome (with disproportionate overheads that benefit
government agencies or a collective rights administration
that existing arts support and social welfare schemes
make adequate provision for struggling creators or - less
plausibly - that artists can use contract law to secure
a share in future resales.
US lawyer Elliot Alderman sniffed that the droit
was an inappropriate mechanism "based on romantic
nostalgia". He argued that artists are in fact not
starving and commented that
individuals are attracted to high-risk careers in the
arts, like participants in a lottery, for the possibility
of an eventual large payoff or the significant nonmonetary
rewards of creation, and are willing to sacrifice consumer
goods for other advantages. For example, artists work
a substantially lower average number of hours, have
more rapid earnings growth than other workers, and,
over the age of 40, earn more than nonartists. Moreover,
artists have higher job satisfaction than other workers:
fewer of them leave their professions than do workers
in other occupations.
have charged that
droit necessarily benefits the wrong artists
at the wrong time of their career (eg 'stars' rather
than those who really need assistance)
financial needs of artists are adequately met through
first sale and subsequent reproduction rights
between private persons "tend to be conducted discreetly",
making information and remuneration rights difficult
demand for and spending on art is fixed, so benefits
for celebrity artists will be at the expense of emerging
for contemporary works will be reduced by a "tax
on the profits of philanthropy"
works are sold or donated to cultural institutions and
thus aren't resold
legislation will be evaded, either by sales going to
'friendlier' jurisdictions (eg from London and Paris
to the US) or resellers ignoring the law and relying
on the inability or disinterest of artists in taking
them to court
Australian agents have featured droit de suite provisions
in contracts when selling works on behalf of artists,
reportedly not encountering major resistance by private
or commercial purchasers.
The Australian Copyright Council, however, notes that
no substitute for a right under legislation, as rights
under a contract are generally not enforceable against
people other than the people who are party to the agreement,
and cannot be imposed retrospectively (for example,
where as a younger or less aware person, an artist sold
a work without such a contractual clause).
with overseas studies, the ACC notes that in practice
only established artists may be in a position to impose
such conditions on sale and resale of their work.
Critics of droit schemes have noted
that the profits accrued by some collectors, although
striking, may in fact be lower than what they would have
received by investing in the stock market and selling
those shares after 15 to 20 years.
Others have noted that in France around 70% of resale
payments appear to go to the families of a handful of
famous dead artists (notably Picasso, Braque, Matisse
and Léger). In Germany artists' estates are reported
to collect seven times as much as living artists. Critics
typically point to such figures as eroding claims that
resale royalties will significantly aid needy artists.
Berne, TRIPS and UNESCO
Article 14 of the Berne Convention (as revised in 1971)
identifies droit de suite as one of the 'author's
rights' comprised in copyright, with the expectation that
it can be claimed by creators and their heirs during the
duration of copyright
Berne essentially treats the droit as aspirational:
it is not a 'minimum right' that must be reflected in
the national legislation of all signatories to the international
agreement but instead is one that can be linked to reciprocity
in national regimes.
Proponents of the droit have often argued that it is an
inalienable right, ie one that the creator cannot waive
in advance. That argument, reflected in the EU Directive,
reflects perceptions that the art market is weighted strongly
towards dealers. Those dealers holds a stronger bargaining
position than emerging artists and are able to set price
and sale conditions.
In practice inalienability merely specifies that an artist/heir
can - in principle - exercise the right following first
sale and does not obligate the artist (or another entity
such as copyright collecting society or government agency)
to exercise that right.
in 2001 that
original works of fine art in its widest sense, including
works of graphic art and photographs of a creative nature,
which are resold on the art market in the world, must
be subject to droit de suite legislation.
persons entitled to droit de suite remuneration are
the artists and their heirs. In order to prevent the
art dealers from forcing the artists to give up this
right on the occasion of the first sale it must be recognised
as inalienable and non-waivable.
The droit de suite claim must be addressed not only
to the vendors themselves, but also to any art market
professional involved in resale either on the vendor's
or on the buyer's side. This right should not apply
to sales between private persons.
Droit de suite legal provisions should provide for uniform
royalty rates; rate splitting for certain portions of
sale prices only complicates its management.
The precondition to making droit de suite claims is
a right to information granted to the right owners and
enforceable against vendors and traders; it is more
appropriate that this right be exercised by a collecting
The remuneration claim can be enforced independently
of the information claim and be asserted either individually
or by a collecting society; practice will prove that
this claim is usually made by a collecting society jointly
with the information claim which makes the management
of this right less costly and minimises the interference
in the market proceedings.
Author' societies mandated to exercise droit de
suite are in a position to maintain social institutions
or institutions which support young artistic talents
with a view to encouraging the growth of the artistic
potential of the nation, as well as persons excluded
from the art market who benefit, at least partially,
if this lies in the national legislature's intentions.
To encourage all States to introduce this right, it
should be bound to the principal of material reciprocity
for the aggregate value of global art sales are problematical.
One estimate is that the market of auctioned art grew
million to over US$1.8 billion from 1970 to 1997, with
the US and UK accounting for 44% and 29% respectively.
Administration of the droit is based on national legislation
- a discrete enactment or provisions in the Copyright
Act - with royalties being collected and distributed by
a government agency or by a collective intellectual property
rights (IPR) administration body, often known as a copyright
We have profiled Australian and overseas collecting societies
here. They are owned
by copyright owners, operate on a not-for-profit basis
and provide efficiencies in rights administration that
are not available to most individual copyright owners.
The costs of collecting the droit in Europe appear
to vary between 10% and 40% of the royalties collected.
Australian rights administration body Viscopy foreshadowed
that its costs might be 25% of the royalty. France reportedly
deducts administration costs of 20%.
The Californian regime requires the vendor to withhold
5% of any sale over US$1,000, paying the royalty directly
to the artist within 90 days of the sale.
Fenton's 6 February 1997 NYRB review
of Richardson's monumental life of Picasso provides an
anecdotal view of the early history of droit de suite
and the then current UK furore about the EU Directive.
A 1914 Picasso still life - Bottle of Glass, Wineglass,
Packet of Tobacco & Visiting Card - features the visiting
card of financier Andre Level, responsible for the La
Peau de l'Ours (skin of the bear) art club, sometimes
characterised as the prototype art
investment fund. The 'bear' involved a group of art
lovers contributing 250 francs each year for speculative
investment in modern paintings. The investments would
be displayed in the shareholders' homes (an example is
the Picasso here)
before being sold after ten years, when the fund was wound
up through sale of the collection. Matisse - who had unsuccessfully
sought a group of backers to support him in a similar
way - may have originated the idea, echoed in a US scheme
in 2004 and in some Japanese schemes during that nation's
1980s art and property bubbles.
Level assembled twelve partners and began investing in
1904. Ten years later, as if to prove that the fund had
matured on schedule, it became almost impossible for him
to buy the kind of works he'd originally set out to acquire.
A catalogue was printed - now a collector's item fetching
prices greater than the Bear group's original investment
in works by Picasso or Braque - and the sale duly took
place, just in time to beat the German cultural export
drive planned by von Schlieffen. As we noted several years
ago in an article for the Commonwealth arts and communications
department, there is more than one way to skin a bear.
The investors, whether out of nobility or concern to secure
future works, agreed that 20% of the proceeds should go
to the artists, divided between them in proportion to
That principle entered French law six years later - in
search of a good anecdote, Fenton glides over agitation
for droit since the 1860's and postwar lobbying by veteran's
groups - and was known as droit de suite, with artists
or their estates receiving a small proportion (2 to 5%)
of works resold in France or other European countries
with similar legislation.
Robert Rauschenberg has become famous for a supposed confrontation
with collector Robert Scull, who sold the artist's Thaws
(purchased for US$800 in 1958) for US $85,000 in 1973.
Rauschenberg susequently proclaimed
now on, I want a royalty on the resales and I'm going
to get it.
defenders have noted that his rate of return was less
than that earned by investment in IBM or Xerox shares,
although stock offers less aesthetic pleasure and status
Writing at the height of agitation by UK art dealers,
the NYRB quoted coverage in the London Daily
Telegraph of 16 December 1996 of a speech by auction
house supremo, Lord Hindlip, who warned that the extension
of droit de suite to the UK would send all 'bears' swimming
to the US.
In the House of Lords, Hindlip claimed that the EU Directive
would be the end of London as the center of the modern
art market, if not the end of the world (the two are synonymous
to all right-thinking people) as no Japanese collector
would wish to pay the extra 2%.
a conversation with the Japanese seller of the £2m Picasso,
the bread and butter of our business. I tell him that
our charges are 2% and that we will charge him expenses
of a further 0.5%. "So I will have to pay 2.5%
to sell my picture in London?" asks our Japanese.
"Not quite", I have to reply, "there
is the question of droit de suite". His face clouds
and he says "So it is 2.5% to you and 2% to the
artist's heirs?" "Yes, that is so", I
add, "but if it bought by a European there will
be another 5%".
speculated, with little justification, that La Peau de
l'Ours might one day be responsible for closing down Christie's
London operations - a bear market for art in London. Critics
subsequently commented that "although roughly a third
of the fine art sold around the world is French in origin,
only 7 percent of all French art sales take place in France",
supposedly because of the droit.
In reality its impact on the UK or on Australia is unlikely
to be that drastic.
Separate reports about the German regime, for example,
indicate that in 1998 the resale rights of around 7,454
artists were administered by a nonprofit copyright collecting
society. Only 274 received any payment: an average of
DM1,681 (about £550). Some of the more spirited memoirs
of the art trade suggest that some dealers spend more
than that each year on nose candy.
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