Directive on the Resale Right for the Benefit of the Author of an Original Work of Art

Directive 2001/84/EC 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 Malta Ministry for Competitiveness and Communication is embarking on the transposition exercise of the Directive in caption into our national law as required by the EU Commission. The relevant national legislation which would require updating in order to incorporate this directive is the Copyright Act (Cap 415).

The Aim of the Directive

The aim of this Council Directive is to provide visual artists with a share of revenue from sales of their work after the initial sale of that work to a dealer or other buyer. This is also commonly referred to as the droit de suite. This resale right therefore provides that visual artists or their estates receive a royalty on the resale of artworks. (Article 1(1))

When does this Right Apply

This right relates to public (i.e. not private) sales and therefore it would apply to any resale of the original work of art conducted by art market professionals, such as auction houses, art galleries or any other art dealers. (Article 1(2)).

The original work of art refers to works of graphic or plastic art such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs as long as these are made by the artist himself or are copies considered to be original works of art. (Article 2 (1) & (2))

The Directive applies in respect of all works of art which on January 1, 2006, are still protected by the legislation of the Member States in the field of copyright (i.e. certain Member States may have already provisions in their Copyright law which provides for a resale right); or meet the criteria for protection under the provisions of this Directive at that date. (Article 10)

In accordance with Article 1 of Directive 93/98/EEC regarding the term of protection of copyright works, the resale right runs for 70 years after the death of the author.

Points for Consideration

Certain articles within this Directive allow each Member State to select the most suitable method for their application according to the national context.

(a) Article 1(3) – This allows for the optional exemption for works of art acquired directly from the author less than three years before the resale and the sale price does not exceed 10,000 euros. Malta can choose whether to enter this exemption into its national legislation so as to determine that any works of art that are acquired directly from the author and which are resold within three years of their acquisition and for a sale price that is less than 10,000 euros cannot benefit from this resale right.

(b) Article 1(4) Royalty is paid by the seller, but the art market professional involved in the sale may be required to share liability. Malta can select whether the seller alone should be liable for the royalty or whether the art market professional as well as the seller should be jointly and severally liable for the royalty.

(c) Article 3 Member states have to set a minimum price threshold for works of art to qualify for royalty under the resale right. The minimum price must not exceed 3000 euros. Malta must therefore decide the most appropriate minimum price at which works of art may qualify for a resale right the minimum sale price can be set at 3000euros or any price lower than this.

(d) Article 4 Member states have to set the applicable fees according to the rates set out in this article. Article 4(2) allows that instead of the 4% of the portion of the sale price up to 50,000 euros provided in Article 4(1(a), Malta may decide to apply a rate of 5% for this portion of the sale price. If Malta sets the minimum sale price lower that 3000 euros a rate to be paid in royalties has to be determined on the sale price up to 3000 euros. The rate cannot be lower than 4%. As an example if Malta decides to set a minimum sale price at 1000euros than the rates applicable may be set as follows:

  • 5% for the portion of the sale price from 1000 to 3000 euros
  • 4% for the portion of the sale price from 3000.01 to 50,000euros,
    and so on as contained in Article 4 (1), The total amount of royalty should not exceed 12,500euros.

(e) Article 6(2) Provision may be made for compulsory or optional collective management. Malta may decide to leave this optional so that a holder of a resale right may either act on his own for collection of royalties or he may wish to enter into an agreement with a collecting society which will be responsible for collecting royalties on his behalf in return for a percentage of the royalty.