Resale royalty rights aim to give artists a cut of the profits when their work is resold. This idea started in and spread across Europe, with the EU setting standard rules. It's meant to help artists benefit from the increasing value of their art over time.
The US tried something similar with California's Resale Royalty Act, but it didn't stick. Now, there's ongoing debate about whether these rights help or hurt the art market. Some say it's fair to artists, while others worry it might make selling art more complicated.
Resale Royalty Legislation
Origins and European Implementation
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originated in France in 1920 to protect visual artists' economic interests
Allows artists to receive a percentage of the profit from resales of their work
European Union adopted resale right directive in 2001, implemented by all member states by 2006
Harmonized resale royalty rights across EU countries, creating uniform standards
Applies to sales of artworks by living artists and for 70 years after their death
California Resale Royalty Act
Enacted in 1976 as first resale royalty law in the United States
Required 5% royalty payment to artists for qualifying resales of their work
Applied to sales of $1,000 or more when the seller resided in California
Faced legal challenges, ultimately ruled unconstitutional in 2018
Highlighted ongoing debate about artist compensation in secondary art market
European Union Resale Right Framework
Standardized resale royalty rights across EU member states
Applies to sales by art market professionals (galleries, auction houses, dealers)
Covers original works of graphic or plastic art (paintings, sculptures, prints)
Sets sliding scale for royalty rates, ranging from 0.25% to 4% of sale price
Caps maximum royalty at €12,500 per sale to balance artist and market interests
Royalty Calculations
Secondary Market Sales Criteria
Applies to resales after the first transfer of ownership by the artist
Typically excludes private sales between individuals
Covers sales conducted by art market professionals or institutions
May include online sales platforms specializing in art transactions
Often sets minimum sale price thresholds to trigger royalty payments
Percentage and Price Considerations
Royalty rates vary by country and sale price
EU directive establishes sliding scale:
4% for portion of sale price up to €50,000
3% for portion between €50,000 and €200,000
1% for portion between €200,000 and €350,000
0.5% for portion between €350,000 and €500,000
0.25% for portion exceeding €500,000
Some countries set fixed percentages (: 5% flat rate)
Calculation based on hammer price or total price paid by buyer, including fees
Qualifying Artworks and Exceptions
Covers original works of visual art (paintings, sculptures, photographs)
May include limited edition prints, cast sculptures, or tapestries
Often excludes works of applied art or functional design objects
Some jurisdictions set time limits (works created after a certain date)
Exceptions may exist for sales below certain price thresholds
Special provisions for works by multiple artists or collaborative pieces
Artist Rights and Challenges
Lifetime and Posthumous Rights Management
Artists retain resale rights during their lifetime in most jurisdictions
Rights often extend to heirs or estates for a set period after artist's death
EU directive specifies 70-year posthumous term, aligning with copyright duration
Artists may need to register with collecting societies to receive royalties
Some countries allow artists to waive or transfer their resale rights
Challenges in tracking and claiming royalties for lesser-known artists
Enforcement and Implementation Hurdles
Difficulty in monitoring all qualifying sales, especially in private market
Varying levels of and reporting among art market professionals
Cross-border sales complicate royalty collection and distribution
Administrative costs of collecting and distributing small royalty amounts
Resistance from some market participants citing increased transaction costs
Debate over economic impact on art market and potential for market relocation
Challenges in verifying authenticity and provenance for royalty claims