Artist Resale Rights

 

Artist Resale Rights

Brooke Ripley and Laura Loew

Critical Issues in Contemporary Art

September 24, 2020

Artist resale rights, in short, provision artists with royalties for their works. Each time an artist’s work is resold, the artist receives a small percentage of the profits. Fine art tends to appreciate in value, so artist resale rights ensure that the artists reap the benefit of that appreciation. In countries that do not recognize artist resale rights, art collectors buy from an artist early in their career, when they sell their works for cheap, and hold onto the works until the artist has built a reputation. Without artist resale rights, the art market is not for artists, rather it is for collectors.

Though each country approaches resale rights differently, there are a few, foundational factors. When it comes to legislation, the first step is determining the threshold at which royalties begin to apply. In France, the threshold begins at seven-hundred and fifty dollars, but this amount varies from country to country. To communicate secondary sales to artists and allocate funds appropriately, Collective Management Organizations (CMOs) are implemented. The function of the CMOs can either be voluntary or compulsory. Respectively, the CMO will either prompt sellers with a “resale reports request”, or the CMO will actively seek out artists, regardless of membership.

Europe has adopted the droit de suite, which allows artists to receive a percentage of the subsequent sales of their art. In legislation, droit de suite is a right recognized by several countries in the European Union in which an artist, or their heirs, are entitled to a percentage of a work’s resale value, so long as it is resold while the artist is still alive or within seventy years of their death. However, artists cannot sell works without this obligation and they cannot assign the rights to the work to another person. Without this. artists would not receive any payment for their work past the initial sale. 

The US, Japan, and China contribute largely to the art market; however, these countries have not recognized the importance of resale rights. In 1920, France was the first country to establish these laws protecting and supporting artists. In recent years, countries such as Argentina, Senegal, Czechoslovakia, and Chile have made great progress in advancing these rights. The disconnect between legislation regarding artist resale rights in different countries even impacts virtual sales. With the recent pandemic, artists are selling their work in auctions online, but if the virtual action is held in a country that does not have legislation to protect artists, then the artist doesn’t profit from it.  

For many countries, artist resale rights are common practice. However, the United States has yet to adopt any policies to grant artists resale royalties. Unfortunately, there are unintended consequences from this choice to not grant artist resale rights in the United States. Artist resale rights are considered reciprocal rights, meaning that for an artist to receive royalties for secondary sales, resale rights must be acknowledged in both the artist’s home country and the country in which they are selling. Subsequently, foreign artists are disincentivized from selling in America, since they will not receive royalties. The United States holds 35% of the global art auction market, so foreign artists lose access to a large chunk of sale opportunities. Additionally, American artists are disincentivized from selling in other countries, as they do not profit as much as other artists in said countries.

While artist resale rights positively impact artists, it is important to note that it creates a sizable cost for collectors. In Europe, the implementation of artist resale rights has increased sales costs for the buyer, collectors, and galleries. One way is in an increase in administrative costs. It is estimated that each sale transaction costs fifty euros since art market professionals have to take time to determine whether or not an artist is eligible. Additionally, collecting societies deduct their costs before distributing to beneficiaries, which ends up being roughly ten to twenty percent of the collected royalties per sale. Since the United States has yet to implement artist resale rights, and reciprocal rights mean that an artist does not receive royalties when a piece is sold in a country that does not recognize artist resale rights, collectors circumvent the aforementioned additional costs by moving sales to the United States. So, the United States’ negligence of artist resale rights causes foreign artists to lose out on sales. Essentially, until the United States passes legislation to provide artists with royalties, the global art market will continue to serve collectors.

As of right now, art collectors benefit the most from selling art, not the actual artist who created the work. Like many others, Congressman Jerrold Nadler is fighting to make royalty rights for artists a reality. For every time a visual artist’s work is resold, the American Royalties Too (ART) Act would guarantee that artists are compensated. If an American artist's work resells in another country, then countries with a similar agreement would pay the American artist a percentage of what it was sold for. This means that no matter where their work is sold the artist would benefit from it. In other words, if an artist sells a painting for $500 and that painting is later resold for $50,000, the artist would receive 5% of that resale price.

Artist resale rights may be only a small percentage of the total resale value, but they positively impact artists in great ways. Art is an extension of the artist, even after the art has been sold. Thus, many believe that it is imperative that the artist should still benefit from their work. Numerous other countries have succeeded in implementing artist resale rights with little impact on their economy, apart from large-scale sales moving to countries that do not mandate artist royalties. If the United States were to implement legislation, it would not only benefit American artists, but it would also benefit artists from all around the globe. Artists of other mediums such as writing, cinematography, or music, receive a percentage of the reproduction of their work, so it stands to reason that those rights would also be granted to fine artists. 

References

Cisac, European Visual Artists, and Gesac. “What Is The Artist Resale Right.” Artists Resale Right. Resale Right, 2014. https://www.cisac.org/Media/Studies-and-Reports/Publications/SG14-0464_Resale_right_2014-05-15_EN.

Downs, Linda. “Artist Resale Rights – CAA News: College Art Association.” CAA News | College Art Association, July 26, 2014. https://www.collegeart.org/news/tag/artist-resale-rights/.

The European Economic and Social Committee, and Commission to the European Parliament. “Lex Access to European Union Law.” EUR-Lex, 2011. https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A52011DC0878.

Salisbury, Laurel Wickersham. “It's Not That Easy: Artist Resale Royalty Rights and The ART Act.” Edited by Jana Farmer. Center for Art Law, December 5, 2019. https://itsartlaw.org/2019/07/01/its-not-that-easy-artist-resale-royalty-rights-and-the-art-act/.

Schten, Allison. “No More Starving Artists: Why the Art Market Needs a Universal Artist Resale Royalty Right.” Notre Dame Journal of International and Comparative Law, March 23, 2017. https://scholarship.law.nd.edu/cgi/viewcontent.cgi?article=1063&context=ndjicl.