WILL THE ART MARKET REALLY SOAR? REVISITING RESALE RIGHTS AFTER BREXIT.

Author:Marber, Sinclaire Devereux
 
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As the United Kingdom prepares to leave the European Union, copyright law may strike readers as of little concern. One element of copyright law, however, has garnered attention since the referendum: the Artist's Resale Right which entitles artists or their estates to a royalty each time one of their works is resold through an auction house or art market professional. The United Kingdom has opposed resale royalties since their inception, but was obligated to implement the Directive of the European Parliament and Council 'on the resale right for the benefit of the author of an original work of art'. Some art market professionals expressed concern that the Directive would disadvantage the United Kingdom by driving sales to its primary competitors, the United States and China, which do not impose resale royalties. Consequently, despite the perceived liberalness of the art world, Brexit is viewed positively by those who want to reduce transaction costs. This article describes the origins of ARR; argues that the opacity of the art world leads to inaccurate predictions about the economic implications of repeal; and concludes that quantitative analysis ultimately should not be the driving force behind these discussions. Rather, the debate about ARR embodies a qualitative tension between internationalism and nationalism characterising the current political moment more broadly.

INTRODUCTION

As the United Kingdom prepares to leave the European Union, copyright law may strike some readers as of relatively little concern. Indeed, even at a recent discussion hosted by the IPKat Blog and British Literary and Artistic Copyright Association, an expert panel characterised copyright as unlikely to be greatly affected by 'Brexit.' (1) Sir Richard Arnold, a High Court Judge of the Chancery Division, noted that many recent international agreements including that on Trade-Related Aspects of Intellectual Property Rights ('TRIPS'), and the more recent Beijing and Marrakesh Treaties--encompass developments towards which the nation was independently headed. (2) One element of copyright law, however, has garnered attention since the referendum: the Artist's Resale Right ('ARR'). ARR entitles artists or their estates "to a royalty each time one of their works is resold through an auction house or art market professional". (3) The United Kingdom has opposed resale royalties since they were first proposed in the early twentieth century, but was obligated to implement the Directive of the European Parliament and Council 'on the resale right for the benefit of the author of an original work of art' ('the Directive'). (4) Some art market professionals worried that the Directive would disadvantage the UK by driving art sales to its primary competitors, the United States and China, which do not impose resale royalties. (5) Consequently, despite the perceived liberalness of the art world, Brexit is viewed positively by those who want to reduce art market transaction costs. Anthony Browne, Chairman of the British Art Market Federation ('BAMF'), wrote for the right-leaning Telegraph: "The art market has been a British success story. Brexit presents new opportunities to build on this." (6) Because current EU legislation initially will be maintained after Brexit before becoming subject to individual reconsideration, ARR will stay in place for now--but if any provision of copyright were to be repealed, it is a likely target. (7) Browne has already announced he will lobby to dismantle resale royalties in the UK. (8)

Part I of this Article describes the origins of resale royalties for artists and implementation of ARR. Part II argues that, given the lack of transparency in the art world, it is difficult to make accurate economic predictions about the effect that a repeal of ARR might have on the art market. Part III concludes that quantitative analysis ultimately should not be the driving force behind these discussions; rather, the debate about ARR embodies a qualitative tension between internationalism and nationalism that characterises the current political moment more broadly.

  1. HISTORY OF THE ARTIST'S RESALE RIGHT IN THE UNITED KINGDOM

    'Copyright assumes abundance, but the art market depends on scarcity." (9)

    1. ORIGINS

      Copyright has never sat comfortably with visual art, perhaps because it was initially conceived to protect books. In 1710, England passed the first known copyright act, the Statute of Anne, to provide authors with limited terms of exclusive rights (and the ability to license those rights) in the publication of their writings. (10) Scholars such as Guy A. Rub, Professor of Law at the Ohio State University Michael M. Moritz College of Law in the US, argue that copyright law was actually intended to "correct market failures for non-visual artists". (11) Paintings are unique and difficult to replicate. When a painting is sold, the artist (ostensibly) receives upfront payment for her efforts. Conversely, printed books are substitutes for an original manuscript. Without protection over those copies, an author might not recoup any proceeds from her efforts. (12) Thus, prior to copyright, it was actually visual artists that were believed to be better compensated for their creative endeavors. Overtime, though, the tables turned. Technically, artists can make money from reproductions. Albrecht Durer revolutionised printmaking in the sixteenth century and sold copies of his work throughout Europe. (13) Commercial artists today might design mass-produced greeting cards. Some fine artists and their estates--such as Pablo Picasso--could even benefit from postcard reproductions of their famous works in museums. But the majority of painters and sculptors do not traditionally make money from reproductions and therefore cannot necessarily benefit from 'appreciation in value'. (14) Authors of runaway bestsellers profit from their popularity. In the absence of resale royalties, artists who gain recognition might watch a work they originally sold for a few thousand pounds resold for millions without receiving additional compensation. (15)

      The aforementioned tension between copyright and the visual arts may help explain why Paris was full of 'starving artists' in the early twentieth century, even though the city was the centre of the art world. Networks of dealers and collectors had replaced a patronage system from which artists received a living stipend to create works for their benefactors. Visual artists were now required to survive on proceeds from individual works, often sold at a very low price through necessity. (16) Public attention was drawn to the plight of several significant French painters, including Jean-Francois Millet, Paul Gauguin and Paul Cezanne, who died in poverty, but whose work sold well (especially posthumously) on the secondary or resale market. Neither they nor their families benefited from later recognition. France passed the first droit de suite (literally, 'right to follow', but translated as 'resale royalty right') in 1920 to counter this perceived disparity in earning potential among artists working in different mediums. (17) Today, many argue the 'starving artist' myth is just that--a myth. Professor Rub, for example, has asserted that these oft-cited stories are "anecdotal", "taken out of context" and "a weak justification for a legislative reform". (18) Regardless of the status of artists in 1920s' France, there is evidence that today, at least in the United States, artists' earnings are "typically quite similar to those of the general population", when side jobs such as teaching are included. (19) Yet the popular notion persists that artists deserve more economic participation in the monetary appreciation of their work.

      Thomas F. Cotter, Associate Professor of Law at the University of Florida College of Law in the US, has described authors' rights in their intellectual property as grounded in two philosophical traditions: personality theory and utilitarianism. (20) The common law tradition of copyright focuses on economics; artists are incentivised to produce more when they are compensated for their efforts, thus creating a cycle of production. (21) The pervading myth of the starving artist is more enmeshed with traditional Continental theories of authorship rather than the utilitarian Anglo-American ones. (22) French authorial rights (droits d'auteur) are traditionally divided into economic (patrimoniaux) and moral (moraux) rights. Economic rights include those such as the creator's ability to profit from reproduction of an original work. Moral rights encompass "non-economic rights linked to the personality of the author, which permit the author to maintain a certain dominion over his or her work, even after having ceded economic rights" (for example, attribution and integrity). (23) Despite the undeniably commercial aspect of resale rights, France plainly considered the droit de suite a moral right, owed to the artist because of a continued personal connection to her art. Under this personhood theory of intellectual property, derived from the philosophies of Immanuel Kant and Georg Wilhelm Friedrich Hegel, artists would be entitled to resale royalties by virtue of a natural, inherent connection to their creations, which is not severed when a physical work is sold. Consequently, droit de suite is not per se financially motivated, but rather a means to legally recognise the continuing relationship of the visual artist and her artwork. (24)

      Beneath the concept of artistic personhood of is an assumption about what 'authorship' really means. (25) Peter Jaszi, Professor Emeritus at the American University Washington College of Law, presents a post-structural history of Anglo-American copyright law in his influential 1991 article, 'Toward a Theory of Copyright: The Metamorphoses of 'Authorship" by demonstrating the instability of 'authorship' as a modern legal concept. (26) He argues that copyright developed...

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