What is it?

The artist’s resale right is a right which enables an artist to receive payment for successive transfers of the protected work of art. It is intended to allow artists share in the economic success of their original work. It has been introduced as an attempt to redress the balance between artisans and producers of other types of creative works. For example, producing a work of music, literature or drama entitles the creator to a lifetime copyright in that work. After the artist passes on, their estate is entitled to a further 70 years copyright in the work.

The right is unassignable and inalienable. An artist cannot sell, repudiate, forfeit, transfer or otherwise alter the right. This may seem like a restriction on the right but it is designed to prevent contracting out of the right. Many artists may choose to sell works for low prices while they are becoming more established, out of a need to have an income. The inalienability of the right ensures that should one of these works resell, under certain base conditions, the artist or the artist’s estate will be entitled to a portion of the resale amount.

Background

The resale right was described in directive 2001/84/EC of the European Parliament and Council, issued on 27^th September 2001. This directive does not oblige Member States to implement the directive into national law until January 1^st 2006 at the latest however the directive states “The resale right is currently provided for by the domestic legislation of a majority of Member States”. The rights of successors to the artist must be transposed into domestic law by January 1^st 2010. It is argued that the disparity between implementations of the right in Member States contributes to distortions of competition and negatively impacts the proper functioning of the internal market. The directive seeks to harmonise the right across the Community.

The Right applied in Ireland.

The directive was transposed into Irish law by Statutory Instrument 312 of 2006 European Communities (Artist’s Resale Right) Regulations 2006. The right is referred to as a resale royalty which applies to any resale subsequent to the first transfer of ownership. The directive as transposed into Irish law has chosen not to extend the right to the heirs of the original author at this time. The right subsists during the life of the original author and is extinguished on the original author’s death.

Resale

The sale may be regarded as a resale for the purposes of the application of the regulation if the buyer, seller or agent of either party is acting in the course of a business of dealing in works of art AND the sale price is not less than EUR3,000.

Liability of the Seller

The liability for the payment of the royalty due under the regulations is on the seller of the work. The seller may withhold the payment of the royalty until sufficient evidence of entitlement is produced. Any liability to pay the royalty to more than one person as joint authors is considered discharged upon the payment of the royalty to one author.

How does the artist find out the detail of a sale?

The author of an original work may request of the seller or a person involved in the sale, any information that may be necessary in order for the author to secure payment of the royalty. The seller is required to make every effort to provide the information requested within 90 days of the request. If the information requested is not provided the author may apply to the High Court for an order requiring the person to whom the request was made, to supply the information. The request for information should be made within 3 years of the sale.

How is the amount of the royalty determined?

Subject to the upper limit of EUR 12,500 the royalty amount is determined as a percentage of consecutive portions of the sale price (the price obtained for the sale net of any tax payable). Should the sale happen in an alternate currency, the sale price shall be converted according to the European Central Bank rate on the day of the sale.

Example:

An original work resold for 400,000 Euro (net of tax) would be calculated as follows:

The first 50,000 @ 4% = 2,000
The second portion 50,000.01 to 200,000 (14,999.99) @ 3% = 4,500
The third portion 200,000.01 to 350,000 (14,999.99) @ 1% = 150
The fourth portion 350,000.01 to 400,000 (49,999.99) @ 0.5% = 250

Total royalty: 2,000 + 4,500 + 150 + 250 = 6,900

Note: Galeara seeks to provide general knowledge and background on relevant issues and does not purport to give a legal interpretation of legislation or case law. If you wish to have a legal opinion given to you on any matter, please consult a qualified professional.