(All images by Lauren Purje for Hyperallergic)
Droit de suite (“right to follow”) is the notion that artists, their heirs, and estates should receive an Artist Resale Royalty (ARR) every time one of their works is subsequently resold. The royalty is typically a small percentage of a resale (usually around 3–7%). Supporters of ARRs contend that the practice helps to support working artists, providing income that can be reinvested into studio rents and materials.
Although artists have the same copyright protections as other authors, they are often unable to commercialize their works for profit in the same way.
For example, unlike writers, filmmakers, and musicians, artists don’t benefit from derivative or reproducible income (such as screenplay rights or soundtrack licensing). Most artists only profit from the initial sale of a work of art. This is because the art industry places a massive premium on uniqueness.
The idea supposedly originates from a complaint by the family of French Realist Jean Francois Millet. In 1889 (14 years after the artist’s death), the French copper magnate Eugène Secrétan sold Millet’s painting “L’Angélus” (1857–59) for a record breaking 553,000 francs. Millet’s family was completely destitute at the time and was horrified by the sale (ironically, the painting depicts two peasants bowed in prayer).
France was the first country to nationally implement droit de suite (1920). It followed in the wake of a widely published lithograph by Jean-Louis Forian, which drew popular sympathy to the cause. The lithograph depicts an artist’s children gazing at a painting in a shop window with the caption, “Un Tableau de Papa! / one of father’s paintings!”
Belgium followed suit in 1921, as did Czechoslovakia in 1926. At present, over 70 countries have implemented ARR laws, including Australia, the Philippines, and Russia. The European Union standardized its legislation in 2001.
The United Kingdom partially implemented a resale royalty scheme in 2006, despite loud protestations from auction houses and some galleries that this would severely damage the market and drive sales abroad. A subsequent report found that the changes had not negatively impacted the UK’s market in any perceptible way. Two nonprofit agencies, DACS (The Design and Artists Copyright Society) and ACS (Artist Collecting Society), collect ARRs on behalf of registered members. According to their website, DACS paid out out over £14 million ($22.5 million) in royalties to 19,000 artists and estates in 2013. They even occasionally run competitions to encourage artists to sign up.
The US doesn’t have a national artist royalty scheme, which puts it in the same company as Canada, China, Japan, and Switzerland. American artists and legislators have been actively battling to introduce a national ARR for almost half a century.
In 1971, the legendary curator and publisher (and all-round cool dude) Seth Siegelaub teamed up with attorney Robert Projansky to create The Artist’s Reserved Rights Transfer and Sale Agreement (ARRTSA). When signed by a purchaser, the document entitled artists to 15% of any profits made upon subsequent resales (it also included provisions for exhibition and reproduction rights). The legality of ARRTSA remains questionable, but a number of dealers (including Leo Castelli) professed to using the document, the first of its kind in the US. “Consider the contract as a substitute for what is available otherwise: nothing,” Siegelaub wrote.
Curator Seth Siegelaub co-authored “The Artist’s Reserved Rights Transfer and Sale Agreement” (1971) with lawyer Robert Projansky.
Between 1976–2012, California was the only US state to have had an artist resale royalty law. Its genesis is popularly traced to an eventful evening in 1973, a night renowned artist Robert Rauschenberg got very angry.
On October 18, 1973, the collectors and taxi company owners Robert and Ethel Scull held an auction of their collection at Sotheby’s Parke-Bernet. The sale was a turning point in the art trade, as it demonstrated just how lucrative works of contemporary art had become. The Sculls represented a new breed of collectors who started to view art as an investment asset, a commodity that could be resold for a huge profit. A lavish catalogue was printed, and heaps of press material celebrated the couple’s expert connoisseurship. That night the Sculls sold works by Andy Warhol, Jasper Johns, James Rosenquist, and Rauschenberg for record sums. A 1958 painting by Rauschenberg entitled “Thaw” sold for $85,000 (the Sculls had originally purchased the painting from Rauschenberg for $900).
Rauschenberg made his way through a picket line of disgruntled artists and Scull taxi cab employees outside the auction, and confronted Robert Scull directly. Their exchange is featured in the documentary film America’s Pop Collector: Robert C. Scull – Contemporary Art at Auction. The footage also appears in Robert Hughes’s excellent documentary The Mona Lisa Curse (2008) (around the 24:40 minute mark).
Robert Rauschenberg and collector Robert Scull
According to Ethel Scull, Rauschenberg punched her husband in the stomach, and the two never spoke again. Rauschenberg teamed up with James Rosenquist, and their campaigning efforts inspired the 1976 California’s Resale Royalty Act (CRRA).
Under the CRRA, a 5% royalty applies to artworks worth over $1,000 and resold for a gain. The act stipulates that an artist must be a US citizen or a resident of California for at least two years at the time of sale.
In October 2011, a group of artists and estates, which included Chuck Close, Laddie John Dill, the Robert Graham estate, and the Sam Francis Foundation, sued Sotheby’s, Christie’s, and eBay, alleging that the auction houses were failing to pay royalties as provided for under the CRRA. Lawyers for the defendants argued that the CRRA was unconstitutional, as it purported to regulate transactions taking place outside the state of California. The judge presiding over the case agreed. The constitutionality of the CRRA remains unresolved until the Ninth Circuit Court of Appeals rules on the artists’ appeal.
Artist Chuck Close. In 2011 Close, along with other artists and estates, took legal action against Sotheby’s, Christie’s, and eBay. The suits backfired when a judge held the California Resale Royalty Act to be unconstitutional.
The three auction companies recently argued to the Ninth Circuit Panel that a rehearing is unnecessary. Lawyers acting for the companies have pointed to earlier cases concerning commercial regulations on California activity, including decisions on a foie gras ban and a low carbon fuel standard.
Other failed attempts to introduce ARRs in the US include the Waxman Bill (1978), and the Visual Artists Rights Amendments of 1986 and 1987.
In 1992, the US Copyright Office published a report advising against the adoption of a national ARR scheme (though it suggested that Congress could revisit the issue if the European Union successfully harmonized its own laws).
In 2011, Senator Herb Kohl (D-WI) and Congressman Jerrold Nadler (D-NY) introduced the Equity for Visual Artists Act. The bill advocated a 7% royalty on works sold at public auction for $10,000 or more. Had it been enacted, royalties would’ve been split evenly between the author of the work and an escrow account to support future purchases by nonprofit art museums.
If the US had already adopted a national resale royalty, American artists would currently be receiving royalty payments from countries with equivalent laws (due to reciprocal agreements such as the Berne Convention). This means that American artists have been missing out on potential royalty payments for quite some time.
In December 2013, the US Copyright Office published a new report which encouraged Congress to consider legislative action:
The logo of the United States Copyright Office (founded 1897)
The Copyright Office finds no significant legal or policy impediments to adoption of a US resale royalty, and indeed supports consideration of a a resale royalty right as one option to address the historic imbalance in the treatment of visual artists … Given most artist’s comparative lack of bargaining power in relation to auction houses, galleries, and other art market professionals, some level of congressional involvement may be necessary for these negotiations to achieve meaningful results.
Along with Senators Tammy Baldwin (D-Wisc) and Edward Markey (D-Mass), Congressman Jerrold Nadler has now put forward the American Royalties Too Act (ART). If passed, the act would require a 5% royalty on all works of art worth over $5,000 sold at auction (with a maximum royalty payment capped at $35,000). The act would only apply to auction houses with annual sales of over a million dollars.
The Visual Artists Rights Coalition and the Artists Rights Society are lobbying in favor of the bill. Christie’s, Sotheby’s, and eBay are lobbying against it.
On July 15, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet discussed the ART Act. The subcommittee’s chairman, Howard Coble (R-NC), indicated in his opening remarks that he is “not uncomfortable with the notion of a resale royalty.” A recording of the hearing is available at judiciary.house.gov (the hearing begins at the 52:10 minute mark, and Congressman Nadler’s comments begin at 1:05:16).
In her witness testimony to the subcommittee, Karyn Temple Claggett, the associate register of copyrights and director of policy and international affairs for the US Copyright Office, described resale royalties as “an issue of fundamental fairness.”
“There is a compelling international trend that makes US review of the resale royalty right timely and important,” Claggett testified.
At present, the ART Act only has 15 cosponsors. It’s therefore essential that artists and the art-loving public express greater support for the bill. The debate on resale royalties should be taking place between friends, colleagues, and on social media — not just between lawyers and politicians.
To express your support of the ART Act, write a letter to your state’s senators and representatives. If that sounds too arduous, reach out to them via the contact forms on their websites. It’s easy. Help spread the word. Five minutes of your time might just spur a lifetime of change for artists.
Resale royalties are a good idea , if you are a old (or better still a dead) artist who has sold a lot of work prior to the scheme starting. They are not so good if you are a younger or simply a less well established artist trying to sell your art for the first time- once buyers know about the royalty requirement they will either offer a lower first price or they will stop buying all together. In Australia the royalty has had a negative impact on buyers and the benefits have (largely) gone to the ‘top 20-40’ of artists who have sold a lot of art and are often dead.
In fact according to the most recent EU study of the resale royalty in the whole of the EU, only %18 of the total royalty money paid goes to artists who are alive!
For the majority of artists resale royalties are a very poor idea.
Royalties have not hurt the music or publishing industry. Artists need to pay rent and eat to make artwork. Their estates need to store, conserve, and ship their artwok to shows. The government should be helping those who have less political influence and financial bargaining power get rights. Shame on Christie’s and Sothebys for opposing artist rights.
Respectfully John, I disagree. Here are some brief reasons.
Firstly, royalty payments are almost always capped. This is designed to counter criticism that ARRs only benefit established artists.
I’m not qualified to comment on the impact of ARRs in Australia – but in the U.K., a recent report concluded that there is no evidence the scheme harmed the market. Frankly, I find it laughable that the auction houses balk at a 5% royalty while they continue to implement plenty of other charges. Christie’s even introduced a new charge earlier this month: http://www.theartnewspaper.com/articles/Christies-takes-another-/35708
Why shouldn’t artists see some sort of return when their work performs well in the market? Why should collectors, speculators, and auction houses benefit the most when they have little or nothing to do with the production of the work? It doesn’t take a rocket scientist to conclude that artists are always getting the rawest deal.
The U.S. (indeed the world) has a crippling student debt problem. Royalties would contribute a great deal to helping younger artists. Even a modest royalty will contribute towards rent or studio supplies. Since auction houses and collectors benefit the most (economically), they ought to contribute to the overall health of the arts.
Of course, royalties will go to popular “dead” artists too. But where’s the harm in that? Artist estates and foundations provide jobs, and require funds to authenticate works for the market. The Rauschenberg Foundation has been extremely generous with grants since its inception.
In the UK, organizations such as DACS don’t just help with royalty payments. They also assist artists with copyright queries/protections.
Finally, (and this is my own assumption), ARR’s will go a long way in improving the national quality of provenance. There have been moans that ARRs will require lots of paperwork (since secondary sales need to be tracked) – but if the result means better provenance, that is also a good thing (combating forgery, fraud etc).
The following is from Freakonomics :
[resale royalties]”helps the tiny fraction of artists fortunate enough to have their work appreciate significantly in value. But it does nothing for the 99%
of artists whose work has little enduring commercial value. Not only
does it not help them, it probably hurts them.
How? Because if buyers know that they have to pay the artist a share
of any profits from later sales, they are likely to pay less in the
initial transaction. (Note that artists don’t have to pay buyers when
buyers lose money in a subsequent resale, so this is not a
risk-sharing rule: it simply shares profits.) Because most artists will
never see any resale royalties, they are likely to be worse off overall.
In other words, the right to 5 percent of a later sale is like a
lottery ticket — and like lottery tickets, the vast majority of ticket
holders walk away worse off. And the net effect is to transfer wealth
from unsuccessful artists (the lottery losers) to successful artists
(the lottery winners).” http://freakonomics.com/2011/12/22/artist-resale-royalties-do-they-help-or-hurt/
In 2004 the respected Canberra (Australia)-based economic consultancy Access Economics was commissioned ( by the collection society VISCOPY) to model the likely impact of an Artist Resale Royalty. In their report, Access Economics warned that the claim of net benefit to artists was:
“based upon extremely unrealistic assumptions, in particular the assumption that seller and buyer behavior would be completely unaffected by the introduction of RRR [ARR]”
and that,
“Access Economics considers that the results of this analysis are both unhelpful and potentially misleading”.
VISCOPY (DACS Australian sister society) suppressed this report.
As for the distributions of the royalty payments in Australia, the following is from a detailed analysis of the available (as of December) 2013 data:
Artists Resale Royalties: a piece of pie…(or not even that):
“Royalties on resales of individual artworks for more than $10,000 each,
account for 59% of all the money collected, yet these top rank payments –
about 550 in total – only account for just 7% of the total number of
individual payments of the scheme.”
http://clubtroppo.com.au/tag/john-r-walker/
As for the scheme ‘helping poor students’, how can a royalty on famous artists resales in million dollar auction houses even possibly help young artists who have not yet sold much art, in the first place- ‘Pull the other one’, mate.
Hi John, you’ve hit on an important point, and one that is common to all of the potential solutions to this problem – that they don’t consider the buyer of Artworks.
Resale Royalties is not the right way to deal with the ‘Latency Problem’. Over the coming months I’m writing about the Latency Problem and the reasons why all the different approaches (Including Seth’s) have not worked, and why I hope that the ‘#7/11 Project’ is the first step towards a revolutionary new non-profit business that will change the way we buy, sell and enjoy Art. If you’re interested or you’d like to participate – http://www.paulsewter.com/7-11project
The documentary mentioned above – “America’s Pop Collector” – focuses on this issue at a time when Robert Rauschenberg and others were trying to establish “artist’s royalties” so that artists could share in secondary sales of their works. This 1974 historical documentary is distributed by the Museum of Modern Art. It should be seen by every artist and art student who is active and wants to benefit from their work when it is resold. Collectors alone should not be the only ones to benefit.
I think you’re right to say that collectors should not be the only ones to benefit from an increase in value, but If we as Artists want to share in this increase in value, perhaps there might be a better way to do it than waiting around for a bus that may never come (royalty payment of 5% or less)?
If you’d like to take a look at what I’ve learned about this problem, and how I think we might be able to fix it it, please have a look at http://www.paulsewter.com/7-11project/
It’s mind-boggling how many American artists have never heard of the term Droit du Suite, the history of artists rights, or have never even considered the notion of solidarity with other artists with respect to themselves and their families livelihood and financial security. The primary reason is that except for artists who have trust funds few artists can afford to live without a secondary occupation that is their primary income – including vast numbers of teachers and professors in art schools and university art departments whose knowledge of economics in the artworld is practically nil.
(Most artists wouldn’t even have health insurance but for a secondary profession until recent passage of the Affordable Care Act.)
Musicians have a union, actors have a guild, but for visual artists it’s as if any type of tangible identity with one another outside of a group show ever existed. The argument that Resale royalties will only benefit a few artists is absolutely false when compared to the current system that only allows select artists to benefit at all (after paying absurd commissions) and as for their families, not to benefit whatsoever.
Hi Bill. There’s enough history with this issue for us to know that there definitely is a problem that does profoundly affect the makers of Fine Art, and by extension, the culture of Fine Art. Unfortunately though, I believe Legislation is a red-herring solution, for reasons other have mentioned here, and that I talk about here – http://www.paulsewter.com/what-the-state-did-next/
Hear, Hear!
Let’s look at this another way. In 1959 you purchased a new fuel injected Chevrolet Corvette for the then market price of $3800. Today you sell that car for the wildly appreciated price of $78,000. Does General Motors deserve 5% of the profit you made by guessing right in your investment?
In 1986 you bought 100 shares of Microsoft stock from the company in the initial public offering at $21 per share, or $2100. Today, after the many stock splits, you have 28,800 shares from the original 100, which you sell for $46 per share, or $1.3 million. Should you have to pay Microsoft 5% of the profit you made by guessing right?
Artists should not be singled out for special treatment. They make a product which they then sell at a price they find acceptable at the time. If the buyer guessed right, the artist is no more entitled to a share of the profit than is General Motors or Microsoft. The vast majority of newly minted artworks, including high priced works sold in exclusive New York galleries, decline drastically in value, never seeing an auction house or even a private sale. Should the artist have to cover 5% of the loss that the collector takes on such works?
The artist frees himself from market risk when he sells his work. The buyer assumes 100% of the market risk. Without invoking any “special class” nonsense regarding artists, it is impossible to justify forcing the buyer of a product to cede a portion of his possible profit on the purchase against his will and without recompense, and to do so by fiat is tyranny.
Hi James. It’s misleading to compare a working artist with a corporation. Indeed, most working artists would find the comparison offensive.
To equate second hand cars with artists is to completely homogenize two very different markets operating under completely different and varied circumstances. Your comment also glosses over the rampant inequality that exists in the art world – and ARRs are an important step towards closing that gap.
As an aside, many collectors mitigate so-called “risk” anyway by banding together in order to inflate an artist’s prices. Your comment reflects a belief that an artist’s career should be treated like a company stock – a notion that, although seemingly entrenched, is actually very young historically (many historians have pinpointed its origin to the creation of the Times-Sotheby art index in 1967: http://www.theguardian.com/artanddesign/2006/feb/13/art.culture).
The case can even be made that in the long term, ARRs are beneficial for the art industry since they incentivize cultural production and lend growing support to up and coming artists. The U.S. Copyright Office’s report (http://www.copyright.gov/docs/resaleroyalty/usco-resaleroyalty.pdf – page 71) stated that the Canadian auction house Ritchies intends to implement its own in-house ARR scheme out of principle.
Tiernan…
Thank you for your considered response. I am a working artist. The comparisons are not in the least misleading, nor are they offensive.
If you sell me your painting, the motorcycle you built in your garage, the pie you baked, the table your small manufactory made, the product your large public corporation made, whatever, it becomes my sole property. You relinquished all right to it when you transferred title to me. If artists want royalties, they can insist on a contract for them at the time of sale. We all know precisely what would happen to the sale at that point.
The artist does indeed profit from appreciation of his works to the extent that he is alive to keep producing more, or he or his estate still has the culls, give-aways, unsold works, and private collection in his own or his family’s hands. Mr. Rauschenberg was able to sell his later work for fantastic sums solely because some influential rich folks either took a chance on his early works, or as you suspect, schemed to create a self-fulfilling prophecy. In either case, he profited handsomely by the mere fact of being “chosen” by the rich folks.
We can all argue all day long whether or not royalty rights are a good thing, are good for the art market, or whatever other claims might be made, but the fact remains that they are patently unfair to the buyer, who assumed 100% of the market risk. For we artists to insist that our products are a special class of goods deserving of special privileges is profoundly arrogant, and is insulting to the makers of every other class of goods.
James I am a working Australian Artist, you are spot on!
The following is the first of a number of articles that we have published over the past 2 years on ‘Club Troppo'( one of Australia’s leading centrist Law, economics, policy blogs)
Hope you have the time to read it.
http://clubtroppo.com.au/2012/06/06/with-friends-like-this-labor-policies-and-the-commercial-independent-visual-arts-sector/
Hi James,
At this point I think we’ll have to agree to disagree! However, I am curious to know whether you (and indeed other commenters such as John and Paul) believe that the art market is equitable as it stands, and if not, what other solutions could be implemented (aside from ARRs).
The art market covers a very wide range of variable individual situations, therefore the best solutions will be bottom up solutions to particular problems. The recent US copyright office report on ARR itself acknowledges that voluntary individual initiatives (with perhaps some judicial backing) could be better and more effective way of dealing with a complex and rapidly changing reality:
“…the recent and ongoing evolution of the visual art market may well counsel against a permanent legislative solution. As the market expands, both in popular appeal and in the creation of art forms that are more suitable to production in a meaningful number of copies or multiples, more artists may see benefits under the existing law. Still, Congress could pursue other safeguards, including voluntary initiatives and/or best practices. Alternatively, Congress could revisit one or more of the legislative proposals raised in the 1992 Report. We briefly consider some of these options below.”
The report then goes on to consider alternative options such as voluntary arrangements. After outlining a number of successful US and Canadian initiatives in the area of voluntary schemes, the report acknowledges that:
”Of course, voluntary agreements remain just that.”
And the report then goes on to suggest that:
“…some level of congressional involvement may be necessary for these[voluntary] negotiations to achieve meaningful results. The Office notes that the House Judiciary Committee has recently expressed an interest in examining the role of voluntary agreements in the intellectual property system generally, as well as the federal government’s role in furthering and recognizing suchagreements.467 As part of that review, Congress may wish to specifically consider the ways in which it could facilitate agreements among stakeholders in the art market, or even regulate certain standards or other aspects of them…”
Tiernam Hi
The worst thing about ARR is the amount of time and money that has been wasted on it.
For example in Australia millions of dollars of public (taxpayers) money has been spent on lobbying for ARR, on enquirers and consultants reports, drafting legislation , house of reps standing committees , and then $2.2 million on setting up the scheme and after four and a half years of operations it has delivered a grand total of $2.5 million, and much of that total has gone to people who are fairly well of and/or dead.
This is money that was not spent on buying art in the first place, total waste.
so, by that logic we should rid the royalties for musicians and writers?
In Australia since the introduction of ARR, prices and demand (and consequently production) for the Art most directly effected by the scheme; indigenous art, have sunk like a stone. While ARR is only one of a number of factors at play, it is a big one. For example the ARR aplies to losses and makes no alowance for costs , and therefore its negative impacts are much greater that it might first seem. For example , a picture is purchased for $10,000 ,the picture is eventually resold for $11,000, the royalty ( @%5) on $11,000 is $550 which is %55 of the $1,000 Gross profit on that resale. That is not a incentive to buy art in the first place.
Hi Tiernan. It was interesting to read your comments, and its reassuring to know that lots of jurisdictions around the world believe that this is enough of a problem that they should attempt to legislate a solution. However, I am of the opinion that Legislation cannot remedy this problem, for reasons that others have alluded to in the comments, and for reasons that I mention here – http://www.paulsewter.com/what-the-state-did-next/.
Like it or not, most of us live in an open, free market economy, and that is where I believe the answer to this problem lies.
If you’d like to follow how I think about this problem and how we might be able to fix it, have a look here – http://www.paulsewter.com/7-11project/
Hi James. Is it true then that copyright law creates a ‘special class’ of writers, musicians and film makers? I sympathise with your point regarding the creators of other products for whom the royalties argument is not as contentious (I know an amazing architect who is a terrible business man and permanently broke, but his creations are sought after and on-sell for a handsome mark-up) but to my mind, there is a distinction to be made between a product which has been made under contract (commission), and one that has not. That is not to say that the idea of some form of recompense for great work is not valid for a commissioned product which appreciates in value, but the argument is much weaker.
Just published Part 2 talking about why Resales Legislation isn’t the answer to this problem here – http://www.paulsewter.com/what-the-state-did-next/
Part 3, reviewing Seth Siegelaub & Bob Projansky’s contract is now published here – http://www.paulsewter.com/part-3-seth-bobs-contract/
If a work of art loses value, does the artist and gallery OWE the original buyer?