The artist’s right to resale – recent developments

Posted on 02 Jun 2020, by Eleni Drakou

An artist’s resale right enables artists and their heirs to retain a share in their work as it increases in commercial value. It is provided and protected by law for the benefit of the author of an original work of art. The Cyprus Parliament has recently voted for an amendment in the Cyprus Law on Copyright and Related Rights of 1976 (59/1976) which is expected to further support the art world.

The resale right offers an economic interest in successive sales of the creator’s work. It forms an integral part of copyright which enables the author or the artist to receive consideration for successive transfers of his/her work. The subject matter of the resale right is the physical work, namely the medium in which the protected work is incorporated. The main aim is to ensure that authors of graphic and plastic works of art share the economic success of their works.

The first law referring to the resale right (referred to as “droit de suite” in French) was enacted in France in 1920. The resale right is recognised under international copyright law and it is incorporated in the Berne Convention for the Protection of Literary and Artistic Works.

The 2001/84/EC Directive of the European Parliament and of the Council on the resale right for the benefit of the author of an original work of art (the “Directive”) imposes the resale right in all the European Union Member States, thus providing creators with an adequate and standard level of protection. The Directive has been ratified with the Cyprus law 123(I)/2006and has been incorporatedin the Cyprus Law on Copyright and Related Rights of 1976 (59/1976) (the “Law”).

The Law protects original works of art, which are defined 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. Besides the originals, the copies of the art work are protected by the Law as well, provided that such copies have been made in limited numbers by the artist himself or under his authority. Such copies must be numbered, signed or otherwise duly authorised by the artist.

The resale right enables the creator to receive a royalty based on the sale price obtained for any resale of the work, subsequent to the first transfer of the work by the author. The right is extended to all acts of resale, involving art market professionals acting as sellers, buyers or intermediaries, such as salesrooms, art galleries and art dealers in general. Nonetheless, the resale right is not extended to resale effected directly between persons acting in their private capacity without the participation of an art market professional.

Following each resale of the original work of art, the creators and, following the creator’s death, their heirs, can claim the royalties from the seller. For a period of three years following the resale, the artists or their heirs can request from any art market professional acting as a seller, buyer or intermediary, to furnish any information that may be necessary in order to secure the payment of royalties in respect of the resale.

Besides Cypriot citizens, Cypriot residents, and E.U. nationals, the resale right covers creators, or their heirs, who are citizens of a non-EU country and have their residence outside Cyprus, provided that the legislation of the country of the creator’s or the heir’s nationality permits the resale right protection in that country for authors from the Member States and their successors in title.

The protection of the resale right runs during the creator’s life and lasts for seventy years following his/her death. It is important to underline that this is an inalienable right which cannot be waived, not even in advance, thus providing even more protection.

The royalty is calculated as a percentage of the sale price and not of the work’s increase in value. According to the Directive, the Member States are free to set a minimum sale price from which the sales shall be subject to resale right, however, this should not, under any circumstances, exceed €3.000,00. Until recently, the Cyprus Law provided that the minimum sale price which is subject to the resale right was €3.000,00.

Recently, though, a positive amendment to the Cyprus Law was passed by the Parliament. On the 22nd May 2020, the Cyprus Parliament voted for the extension of the resale right to art work which is sold for less than €3.000,00, hence providing further support to art workers. This development has extended the artists’ benefit from resales, enabling them to secure an additional income from royalties from art work with a price even below €3.000,00. Such a change is expected to contribute to the art world, especially after the outbreak of COVID-19 which has resulted in a pause in art investment.

Following the amendment in the law, as voted by the Parliament, the royalty shall be set at the following rates:

  • 4% for the portion of the sale price up to €50.000,00;
  • 3% for the portion of the sale price from €50.000,01 to €200.000,00;
  • 1% for the portion of the sale price from €200.000,01 to €350.000,00;
  • 0,5% for the portion of the sale price from €350.000,01 to €500.000,00;
  • 0,25% for the portion of the sale price exceeding €500.000,00.

The total amount of the royalty, however, may not exceed €12.500,00. The stated sale prices are net of value added tax (VAT).

The royalty to be paid for art work which is sold for a price less than €3.000,00 is only 4% on the sale price, which is not a prohibitive fee for art investors. Nonetheless, this amendment is considered as an important contribution to a creator, especially to new artists who are now starting their careers and hence, selling their work at low prices. Such a change will enable them to receive a percentage from each subsequent resale, as their reputation grows and the value of their work increases.

This amendment in the law has been greatly praised by the art world in Cyprus, as, in a global world, the right will highlight their contribution to a work’s value, and will enable them to establish a permanent link with it. It marks a positive development for the promotion of culture at large as a universal application of the right would improve the traceability of artworks and the transparency of the global art market.

The content of this article is intended to provide a general guide to the subject matter and does not constitute legal advice. For any further information please contact Eleni Drakou, Senior Associate and Director of Business Development of Michael Kyprianou and Co LLC by email at eleni.drakou@kyprianou.com or by phone at +357 25 363685.