Copyright & Resale Right

Harmonisation of the laws of the 15 EU States, aimed at creating a level economic playing field, usually takes years to achieve: it requires at least two successful readings in the EU Parliament, and ratification by the European Council of Ministers, before a Directive becomes European law directly applicable throughout the EU.

Two Directives affecting the visual arts will soon come into force: the EU Copyright Directive, and the Droit De Suite (Resale Royalty Right) Directive. What are they, and how will they affect artists and the marketplace?

Copyright
This Directive will enable the EU to sign the World Intellectual Property Organisation's Copyright Treaty, and will harmonise key facets of copyright law, especially in relation to the acts which will be permitted to be done without the copyright owner's express licence or authorisation. The Directive also tackles weaknesses in current copyright laws experienced through use of the internet.

There will be a new right for copyright owners of 'communication to the public' which will mean that only copyright owners will have the exclusive right to display their works online and that anyone else doing so without authorisation will be guilty of copyright infringement. Such infringements, wherever they occur within the EU will be legally actionable from anywhere within the EU. This newly reinforced protection (some protection already exists) is supported by further provisions outlawing interference with mechanisms used by copyright owners to protect their works, such as digital watermarking and encryption, and 'click-on' contractual terms.

Most EU countries have copyright laws which allow 'fair dealing' by non-copyright owners for specific Public interest', purposes such as private study, criticism and review (with sufficient acknowledgement of the artist), copying by educational institutions and libraries, and for current news reporting. The Directive will allow establishments which are accessible to the public to make reproductions for non-commercial purposes such as public museums, galleries and libraries. They will be allowed to make copies (without authorisation by, or payment of a fee to, the copyright owner) but not to publish online. Private galleries and auction houses are already permitted to reproduce artworks for the purposes of advertising their sale (in the UK and some other EU States).

Regrettably, the Directive has been framed so as to enable each EU State to choose which aspects of the new laws it wishes to implement within its own (domestic) legislation. This will mean that would-be copyright image users will be permitted to do different acts of copying in different EU States. The Directive is likely to be implemented in Autumn 2002.

Partly in response to existing copyright laws, partly in the light of increasingly tougher laws protecting online uses of copyright images, and partly in an attempt to promote access to contemporary artworks through the use of digital technology, there has recently been established a 'Copyleft' organisation, which has developed a 'Free Art Licence' (contact www.artlibre.org).

Droit de Suite (Resale Royalty Right)
This Directive will harmonise the laws of all 15 EU States, 11 of which have already enacted a droit de suite law. The UK is one of the four not to have done so to date, though the UK Government is currently preparing to do so. The Directive will require each EU State to legislate to give artists a right to a percentage of the profit made on the resale of their works, during their lifetime and for 70 years after their death. The law will come into force in January 2006, so far as living artists are concerned, and in 2012 for artists who died less than 70 years earlier.

The Directive currently awaits ratification by the European Council of Ministers which, it is generally expected, will be achieved; even though the UK Government will (as a formality) probably vote against the measure, because it has consistently and forcefully argued against the Directive on the basis that its introduction would seriously damage the UK (London) art market. That damage, it has been argued for many years, includes the transfer away from London (the UK/EU) of sales of significant modern and contemporary artwork and the introduction of an unnecessary and onerous layer of bureaucracy to deal with the required paperwork.

Resale royalty rates will operate on a sliding scale, and with a minimum transaction threshold of around £1,800 (ie sales below this figure will be outside the scheme). For a sale between around £1,800 and £30.000, the royalty will be 4%; up to around £125.000, it will be 3%, up to around £210,000, it will be 1%; up to around £300.000, it will be 0.5%; over around £300.000, it will be 0.25% (subject to a maximum payment of around £8,000 per sale).

There has been much opposition to droit de suite throughout the EU - from artists and dealers alike - over many years; the UK has been no exception. EU artists who have already experienced the scheme argue that it hardly benefits them and inhibits their freedom to dispose of the works as they would wish; and that heirs of recently dead artists benefit far more than those alive. Others argue that the costs of collection of the royalty (by whatever means) reduces their benefits significantly.

Art dealers have strongly lobbied their respective Governments over many years; in the UK, Tony Blair is widely reported to have written to his fellow EU Premiers questioning how Europe would benefit from the damage that would be done to the UK's art market and suggested that the right should only be applied to living artists (so as to preserve the UK's lucrative art market for sales of work of recently dead artists).

Late last year, several well-known artists launched a poster campaign as part of their lobbying of MEPs, 'Artists Against Droit De Suite: the European Directive violates artists' human rights', and which included their photographs: Karel Appel, Georg Baselitz, Sir Anthony Caro, David Hockney and Sigmar Polke were among them.

On the other hand, the organisation of European Visual Artists, supported by artist's copyright collection societies (such as the UK's Design and Artists Copyright Society), strongly lobbied in favour of resale royalties. They argued that artists live chiefly through sales of their works, that generally first sales are at a low price, and that a resale royalty is the best method of providing artists and their heirs with economic benefits from the enhancement of their reputations (and resale prices) in subsequent years.

Moreover, sharing in the secondary art market acts as an encouragement to the artists themselves and to their creativity since only a tiny number of artists achieve substantial sale prices during their lives. One significant, but often neglected argument, is that Governments in the USA and Switzerland have indicated their willingness to consider introducing the right into their own laws, once the EU has done so. (The USA and Switzerland are always cited, by opponents of the right, as the States to which the EU/UK art market would transfer). In the USA art world, which has taken a keen interest in the protracted EU debate over the right, reactions have been revealing. The US Copyright Office, in particular, has confirmed EU artists' claims that US introduction could very well follow EU introduction of the right (as indeed occurred when the EU recently extended the length of copyright from 50 to 70 years after the artist's death). The debate should now be settled in Europe, with the remaining issues being practical: what form will UK legislation take, when will it be introduced into Parliament, and who will be responsible for its monitoring and collection? The Arts Council of England, at the UK Government's behest, has recently been conducting research into solutions for the collection and distribution of the royalties when the law is introduced - of which more anon.

© Henry Lydiate 2001

This article is from the Artlaw Archive of Henry Lydiate's columns published in Art Monthly since 1976, and may contain out of date material.
The article is for information only, and not for the purpose of providing legal advice.
Readers should consult a solicitor for legal advice on specific matters. Artists can get free online legal information from Artquest.