Judgment of 26 Feb 2015, C-41/14 (Christie’s France)

The resale right is defined in an EU Directive as the right of the author of an original work of art to receive a royalty based on the sale price obtained for any resale of the work, subsequent to the first transfer of the work. That right applies to all acts of resale involving art market professionals (salesrooms, art galleries and, in general, dealers in works of art) as sellers, buyers or intermediaries. Christie’s France, the French subsidiary of the multinational firm Christie’s, regularly organises auctions of works of art. A resale royalty is payable in respect of some of those sales.

Christie’s France has provided in its general sales conditions that, for certain lots marked in its catalogue, it will collect from the buyer, for and on behalf of the seller, the amount representing the resale royalty.

The Syndicat National des Antiquaires (SNA) takes the view that, in placing the onus of the resale royalty on the buyer, Christie’s France’s general conditions amount to unfair competition. Christie’s France considers that the Directive states without further clarification or restriction that the royalty is payable by the seller and thus does not preclude a contractual arrangement regarding responsibility for the payment of the royalty. Hearing the case, the Cour de cassation (Court of Cassation), France, has asked the Court of Justice whether the seller is always definitively to bear the cost of the resale royalty or whether it is possible to depart from that rule by agreement.

In today’s judgment the Court declares that the Member States alone may determine the person liable for the royalty. Although Directive 2001/84 provides that the person by whom the royalty is payable is, in principle, the seller, it none the less allows for a derogation from that rule and thus leaves the Member States at liberty to specify another person from among the professional persons referred to in the Directive who, alone or with the seller, will assume liability for the payment of the royalty. The person who has been designated in that way by national law as the person by whom the royalty is payable may agree with any other person, including the buyer, that that other person will definitively bear, in whole or in part, the cost of the royalty, provided that a contractual arrangement of that kind does not affect the obligations and liability which the person by whom the royalty is payable has towards the author. The Court points out that such a derogation is in keeping with the Directive’s objective of bringing to an end distortions of competition in the art market, since the harmonisation concerned is limited to those domestic provisions which have the most direct impact on the functioning of the internal market. For the purpose of achieving that objective, thus circumscribed, it is necessary to make provision as to the person liable for payment of the royalty and as to the rules for establishing the amount of the royalty. However, such provision is not necessary with regard to the question as to who, definitively, will bear the cost of the royalty The Court does not exclude the possibility that such a derogation may to some extent have a distorting effect on the functioning of the internal market. However, such an effect is only indirect since it arises as a result of contractual arrangements that are independent of the payment of the royalty to the author, for which the person by whom the royalty is payable remains liable.

Retrieved from: https://curia.europa.eu/jcms/upload/docs/application/pdf/2015-02/cp150024en.pdf

Judgment of 15 Apr 2010, C-518/08 (Salvador Dali)

Directive 2001/84/EC1 establishes an obligatory resale right for the benefit of an author of a work of art and, after his death, for the benefit of those entitled under him. The resale right is an intellectual property right which allows the author, and those entitled under him, to receive a royalty based on the sale price obtained for any resale of one of his works subsequent to its first transfer. That right benefits the author throughout his life and, thereafter, those entitled under him for 70 years after his death.

The French legislation limits the beneficiaries of that resale right after the death of the artist to his heirs and excludes all legatees. The artist cannot therefore bequeath that right by will.

The painter Salvador Dalí died on 23 January 1989 in Spain, leaving five heirs at law, who were family members. In addition, by his will, Salvador Dalí established the Spanish State as sole legatee over his intellectual property rights. Those rights are administered by the Fundación Gala-Salvador Dalí, a foundation established under Spanish law, created in 1983 at the initiative of the painter himself.

In 1997 the Fundación Gala-Salvador Dalí granted to VEGAP, a Spanish society, an exclusive worldwide mandate to manage collectively and exercise copyright over the works of Salvador Dalí. VEGAP has, in addition, a contract with its French counterpart, ADAGP, which is responsible for the management of Salvador Dalí’s copyright in France.

Since then, ADAGP has collected amounts in respect of the exploitation of Salvador Dalí’s works, which were transferred by VEGAP to the Fundación Gala Salvador Dalí, with the exception of those in respect of the resale right. Pursuant to French legislation, ADAGP paid the amounts in respect of the resale right directly to Salvador Dalí’s heirs.

Taking the view that, under Salvador Dalí’s will and Spanish law, the royalties levied upon sales at auction of the artist’s works in France should be paid to it, the Fundación Gala-Salvador Dalí and VEGAP summonsed ADAGP before the Tribunale de Grande Instance de Paris (Paris Regional Court) for payment of those royalties. In the course of those proceedings, the French court referred to the Court of Justice the question whether Directive 2001/84 precludes a provision of national law which reserves the benefit of the resale right solely to the artist’s heirs, to the exclusion of testamentary legatees.

In today’s judgment, the Court considers that, in the light of the objectives pursued by Directive 2001/84, Member States may make their own legislative choice in determining the categories of persons capable of benefiting from the resale right after the death of the author of a work of art.

In that regard, the Court recalls that the adoption of Directive 2001/84 is based on two objectives. First, it seeks to ensure that authors of graphic and plastic works of art share in the economic success of their works. Second, the directive seeks to put an end to distortions of competition on the market in art inasmuch as the payment of a royalty in certain Member States might lead to displacement of sales of works of art into those Member States where the resale right is not applied.

As regards the first objective, which seeks to ensure a certain level of remuneration for artists, the Court finds that the attainment of that objective is in no way compromised by the transfer of the resale right to certain categories of persons to the exclusion of others after the death of the artist.

As regards the second objective, the Court states that the European Union legislature sought to resolve a situation in which sales of works of art were concentrated in Member States in which the resale right was not applied, or where it was at a lower rate than that in force in other Member States, to the detriment of auction houses or art dealers based in the territory of the latter Member States. Thus, while it was considered indispensable to provide for harmonisation concerning works of art and sales affected by the resale right as well as the basis for and rate of the royalty, the Court considers that the harmonisation brought about by that directive is limited to those domestic provisions that have the most direct impact on the functioning of the internal market. Therefore, there is no need to eliminate differences between national laws which cannot be expected to affect the functioning of the internal market, including legislation which determines the categories of persons capable of benefiting from the resale right after the death of the author of a work of art.

Moreover, the Court considers that that analysis is reinforced by the fact that, while the European Union legislature wanted those entitled under the author to benefit fully from the resale right after the death of that author, it nevertheless left to each Member State, in accordance with the principle of subsidiarity, the task of defining the persons capable of being categorised as those entitled under their national law.

That being so, the Court explains however that it is for the referring court to take due account of all the relevant rules for the resolution of conflicts of laws of succession in order to determine which national law governs the succession of Salvador Dalí’s resale right and, therefore, who is the actual successor to that right under that national law.

Retreived from: http://europa.eu/rapid/press-release_CJE-10-34_en.htm