Artist Resale Royalty Rights – Is a US Droit de Suite in our Future?

By Hanoch Sheps*

Contention, concern and equity – three words that best describe a recent discussion of proposed federal legislation for an artist’s resale royalty right in the United States. If passed, US artists would also benefit from the royalties on sales in other countries with resale royalty rights through reciprocity protocols. Currently the lack of a resale right in the US prevents such participation.

Last week, the International Foundation for Art Research held a panel discussion on the pros and cons of adopting an artists’ right known as the droit de suite which exists in one form or another in Europe and elsewhere. The only US equivalent existed on the state-level in California until the U.S. District Court in Los Angeles recently found it unconstitutional, a decision currently on appeal. [Estate of Robert Graham v. Sotheby’s Inc. C.D. Cal.No. 2:11-cv-08604-JHN-FFM, complaint filed 10/18/11; Sam Francis Foundation v. Christie’s Inc. C.D. Cal.No. 2:11-cv-08605-SVW-PJW, complaint filed 10/18/11].

The controversial right in its basic form is a compensation for secondary art market sales artists. Emerging in early 20-th Century France, some 50-70 countries in the European Union, South America, and Australia have since adopted a resale right. Most recently, the UK adopted a resale right pursuant to the European Union 2006 directive. There, the resale right guarantees a percentage of the resale price which is nontransferable, not waivable, lasting throughout the artist’s life plus 70 years. Amongst other goals, the limits imposed on resale rights prevent parties contracting with unwary or emerging artists from signing away this bundle of rights. In theory, as the value of an artist’s oeuvre appreciates, that artist stands to benefit from appreciation of his or her artworks in the art market.