• the EU harmonisation directive
• the droit in EU states
• New Zealand
• and in the US

     the EU harmonisation directive

The European Union agreed in 2001 on harmonisation of droit de suite (PDF), with consistency in resale royalty schemes across the EU.

The droit had been in place in several EU jurisdictions for many years but had been strongly resisted by British art dealers, with government support, amid claims that increasing the cost of works sold in galleries or at auction would cripple the local market and drive buyers offshore, particularly to New York.

The droit is being implemented in Britain from the beginning of 2006. It will initially only cover work by living artists, in contrast to the rest of Europe where it covers works that are in copyright (ie the intellectual property of both living and recently deceased artists). It is envisaged that the work of dead artists will become subject to the royalty in 2011.

The royalty is payable on a sliding scale, capped at €12,500 (around $20,000) and falling to 0.25% for sale prices over €500,000 (about $80,000). It covers works resold for more than €1,000, with the the royalty in most cases being 4% of the sale price.

It covers 'original work of art', identified as

works of graphic or plastic art such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs, provided they are made by the artist himself or are copies considered to be original works of art.

It has been the subject of argument for around a decade, with strong opposition from some stakeholders in the UK. Bunny Smedley for example declared that

the EU's harmonisation scheme will drag London down to the sclerotic decrepitude of Paris – much to the delight of New York, Geneva and Tokyo.

The UK agreed to special conditions for its art market and accordingly did not exercise its veto power (EU Directives are based on unanimous agreement).

A UK government study (PDF) reported that the total turnover of the UK art market industry in 1996 was around £2.2 billion (around 50% of the overall EU art market). The four largest auction houses - Christie's, Sotheby's, Phillips and Bonhams - had sales of £832 million (some 56% of auction sales and 28% of all art and antiques market sales).

If the droit had been in force in the UK at that time it would have applied to £242.8 million of auction house sales, resulting in payments of £6.5 million - arguably not a staggering sum. Art dealers would have faced estimated payments of £3.4m on the same basis.

One perspective on the figures is announcement by Sotheby's in 2004 that it had recorded "antitrust related special charges" of US$21.9 million and suggestions that the auction house lost over US$100 million in its dotcom venture. By 2005 we were encountering claims that

London currently accounts for over a quarter of the world's reported US$23.5bn art market, with the domestic contemporary market representing more than US$500m of that

There is an intriguing analysis of the EU regime in Do Resale Royalties Make Artists Better Off? An Economic Analysis of a New EU Directive, a paper (PDF) by Roland Kirstein & Dieter Schmidtchen published in 2000.

It is also considered in Alexander Weatherall's 2003 paper Harmonising the Droit de Suite: a Legal and Economic Analysis of the EC Directive and an Overview of the Recent Literature and in Martina Supper's 2000 thesis An Analysis of droit de suite from a Law & Economics Perspective (PDF).

A UK perspective is provided by Clare McAndrew & Lorna Dallas-Conte's 2002 report Implementing Droit de Suite (artists' resale right) in England (PDF). Louisa Buck's Market Matters: The dynamics of the contemporary art market (PDF) report for the UK Arts Council discusses demand for work by emerging artists.

     the droit in EU states

There has been significant variation between European countries regarding royalty thresholds and ceilings, royalty rates, complementary schemes and reliance on government or non-government agencies.

Rates range from 2% in Belgium to 10% in Iceland. The royalty is collected by government agencies in some countries (eg in Belgium and Hungary). Some schemes provide for payment to the artist/heirs; others use the royalty for a general arts fund (eg Norway). Most base the royalty on the resale price; the Italian scheme (apparently not implemented) provides for a royalty from 2% to 10% of the difference between the prices of initial sale and first resale.

Germany's copyright legislation stipulates the right of artists to 5% of the resale price where an original work is resold by an art dealer or auctioneer, with artists having a right to information (through the visual arts copyright collecting society) about works resold by an art dealer or auctioneer as intermediary during the previous calendar year.

Those provisions complement the separate Künstlersozialversicherungsgesetz - arts social insurance law - that requires buyers to contribute 5-7% of overall payments to the federal government for a French-style arts welfare fund. The BildKunst copyright collecting society thus notes

almost every financial transaction involving an original artistic work places a financial obligation on the dealer: if he buys directly from a living artist, he is obliged to pay the contribution according to the social security law; if he resells a work by an artist protected by the copyright law he has to pay a remuneration for the resale right.

     in New Zealand

New Zealand does not currently have droit de suite. It appears to be waiting to see whether the droit is introduced in Australia.

     in the US

In the US the droit has largely been regarded as a curiosity, a potential exotic import like a designer cheese or the bidet. Proposals for a droit scheme in New York state were defeated but a similar law in California (here) has been in place for several years and does not appear to have destroyed the local market.

A useful starting point is provided by two essays in Stephen Weil's A Cabinet Of Curiosities: Inquiries Into Museums & Their Prospects (Washington: Smithsonian Institution Press 1996).

In 'Resale Royalties For Artists: Boon or Boondoggle' he discusses a 1992 inquiry by the US Registrar of Copyrights, with support from the National Endowment for the Arts. That inquiry was mandated by the 1990 Visual Artists Rights Act (VARA), the US federal version of Australia's Moral Rights legislation. His 'Resale Royalty Hearing: New York City' supplies Weil's testimony about the NY state proposals, with a brief discussion of economic and arts literature on droit de suite in the EU and the Californian state resale royalty arrangements.

Monroe Price's 1968 Yale Law Journal article Government Policy and Economic Security for Artists: The Case of the Droit de Suite seems to have set the tone for much US legal and economic thinking, reflected in Elliott Alderman's 1992 paper Resale Royalties in the United States for Fine Visual Artists: An Alien Concept and Bernhard Berger's 2001 comment Why Resale Rights for Artists Are a Bad Idea. There is a more positive approach in John Solow's 1991 An Economic Analysis of the Droit de Suite (PDF).

Peter Karlen's 'The California Droit de Suite' in Copyright World (1996) offers a view of the state legislation. Overviews are provided by Edward Damich's Moral Rights Protection and Resale Royalties for Visual Art in the United States: Development & Current Status in the 1994 Cardozo Arts & Entertainment Law Journal, Gerhard Pfennig's broader 'The Resale Right of Artists (Droit de Suite)' in the 1997 Copyright Bulletin and Carla Shapreau's 'The Statute with teeth like a Gummy Bear: Droit de Suite in the US' in the April 1998 Art & Law Supplement to The Art Newspaper.

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