Practice Area

The Resale Right in Art - Where do we go from here?

Author: Rodney D. Ryder

It was in the early twentieth century that copyright law responded to growing public awareness of the plight of impoverished artists whose works greatly increased in value to the benefit of dealers and collectors, without any corresponding benefit to the artist. 

In France, a drawing by Forain published inFranceprior to the First World War is reputed to have ignited a major campaign in the popular press in that country in favour of the art resale right. It depicted two children in rags outside an auction salesroom. One child says to the other, "Look! They're selling one of Papa's paintings!” Another story often cited is that of the granddaughter of Millet who sold flowers in the street while Millet's painting "The Angelus", purchased from the artist for 1,200 francs, was re-sold for 1,000,000 francs.

The Droit De Suite, which means “resale rights in original work of art”, 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 characterised as a measure of justice for creators and as an extension of intellectual property. Resale rights cover the right of an artist, sculptor, engraver or photographer to receive a certain percentage of the resale price when his work of art is sold, subsequent to its first sale.

There has long been a global market for Indian miniature paintings, sculptures and other antiquities, but interest in the country’s modern art has suffered. Now, a robust economy, a new moneyed class and the energetic participation of young expatriate Indians are boosting sales of contemporary art to new highs.

Proponents have argued for the droit on several grounds. First, and most importantly, sometimes characterized as the ‘genius in the garret’ theory – is that great works are rarely recognized at first sale, with the artist consequently being inadequately rewarded. Each generation, resellers and buyers should accordingly “make some reparation for the insensitivity of its ancestors”. 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 realized through resale. The royalty provides a mechanism through which the artist can share in realization of that latent value and thus have an incentive for creativity.

In India, under section 53A of the Copyright Act, 1957, the creator of an original work of art has a right to royalty but only in secondary or second sale of price exceeding Rupees Ten Thousand. The Indian statute states that the author of the works of painting, sculpture, drawing, manuscript, literary, dramatic and musical should be given resale right protection provided the author was the first owner of the rights under the Act. The rights shall cease to exist on the expiration of the term of copyright in the work.

The Berne Convention however, to which Indiais a signatory has not laid down any minimum price level for the application of droit. The resale rights under the convention are available only in respect with original works of art and original manuscripts of the writers and composers. The protection of the resale rights of the artists provided under the convention may be claimed by an artist or author if the legislation of the country to which he belongs so permits, and also to the extent permitted by the country where this protection is claimed. The Convention 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 protection.

The artists in India have protection in terms of the resale rights provided under the Copyright Act but it does not provide the rates at which the royalty shall be payable to the author of the work and even there are no organizations as such to take care of the payments made to the authors. So because of the lack of guidelines in this regard the royalty paid to the authors is not as good as they deserve to get and because of their economic condition they are unable to safeguard their rights. Even if India has national legislation for the protection of the resale rights of the artists, they are still suffering when there works are sold in the international markets and specially in those countries where there is no legislation in this regard, since the Berne convention provides for the existence of national legislation in both authors’ country as well as buyers’ country.

The prerequisite of reciprocity limits the possibility of disproportion in world standards between different markets and rules out the likelihood of individual markets making excessive payments to artists from other countries which do not recognize the right and which could result in imbalances in the art market.

The harmonization of a legal approach would mean that Indian artists could, in future, benefit from droit de suite and discrimination resulting from the Berne Convention would be eliminated. The harmonization of this law would be favourable to the economic situation of visual artists worldwide and it would not place an unacceptable burden on the art market. 

  

 <Rodney D. Ryder>, a leading technology and new media lawyer is a partner with Scriboard.

 <rodney@scriboard.com>.