By: Alejandra Aramayo & Reema Taneja*

Speakers:

• Kevin Amer, Counsel for Policy and International Affairs, United States Copyright Office
• Irina Tarsis, Esq., Founder and Director, Center for Art Law; Chair, Cultural Heritage and the Arts Interest Group, American Society of International Law
• Lisa L. Jones, Director, Silver and Decorative Arts, Costumes, Textiles and Fashion, Sloans & Kenyon Auctioneers and Appraisers

Moderator:

Peter Jaszi, Professor of Law, American University Washington College of Law

Many countries, particularly in the European Union, have adopted resale royalty rights.  However, to this day, the United States has failed to implement them into federal legislation; despite the fact that in the last twenty years, U.S. courts have addressed the doctrine at the state level.  In an attempt to combat this issue, speakers in Panel one evaluated the implementation of resale of royalty rights in various countries and assessed whether the United States should follow suit.

Resale royalty rights, also known as droit de suite, originated in France in 1889.  They enable visual artists to benefit from the increased value of their works over time by granting them a percentage of the proceeds each time their work is sold at auction.  The average royalty rate is three to five percent and is capped for each sale made.  Irina Tarsis emphasized that many heirs have benefitted from resale royalty rights as over seventy countries have implemented legislation providing for such rights.  She observed that these countries have had a positive experience.  For example, despite United Kingdom legislation enforcing these rights, sales in London have reached record numbers.  Similarly, France has a number of societies in the country that collect the dues owed to artists for the resale of their works.  However, Lisa Jones noted that the maximum royalties an artist in the European Union can receive for the resale of his or her work is 12,500 euros.  To shed light on the relationship between this cap and value of the pieces, she explained, for instance, that Andy Warhol, whose Triple Elvis was sold at Christie’s New York for $81.9 million, would only receive 12,500 euros for the resale.

Ms. Tarsis observed that while the United States Constitution permits laws granting artists certain rights, this country currently does not provide for resale royalty rights.  While the U.S. is a party to the Berne Convention for the Protection of Literary and Artistic Works, which grants these rights, the U.S.’s obligations under that convention are optional and reciprocal.  Kevin Amer highlighted that this means American artists do not recoup royalties for the resale of their works, even when the works are sold in countries providing for resale of royalty rights.

The current status of the resale royalty rights in the U.S. is murky.  California passed a resale royalty rights law in 1976, but the Ninth Circuit struck it down as unconstitutional because it violated the commerce clause.  The case is pending appeal.  As both Mr. Amer and Ms. Tarsis noted, the U.S. Copyright Office, published a report in 1992 recommending against resale royalty rights because of concerns over the negative effect they would have on the secondary art market in the U.S.  Its follow-up report in 2013 suggested that the rights’ benefits on artists was not conclusive, and would only affect a small number of established artists.  Auction houses have vehemently spoken out against resale royalty rights.

Despite these developments, all three speakers recommended that the U.S. consider implementing resale royalty rights at the federal level.  Mr. Amer noted that the number of countries with similar legislation has doubled in the past several years, and suggested that Congress may wish to consider granting resale royalty rights to artists to eliminate this disparity.  Ms. Tarsis observed that there are an equal number of people supporting and rejecting a federal law providing for resale of royalty rights.  She emphasized, however, that while U.S. auction houses are fighting against these rights, the artists themselves are not united.  She opined that the artists must come together because they are the ones that would benefit from the proposed legislation.  Ms. Jones observed that artists should be allowed resale royalty rights to protect the reputation and the value of their work, especially given the high prices at which some of their pieces can sell for at auction.  She further highlighted that although the maximum royalties received for an artist’s work is capped, receiving some money is better than not receiving anything at all.  However, she did note that a buyer collecting the works of a mid-range artist might not be willing to bid high amounts for the artist’s pieces at auction.

*Both of the authors are junior staffers for Volume 30 of the American University International Law Review writing as a part of our series recapping our February 2015 Symposium: Protecting Art and Cultural Property Through International Law at ASIL