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From Solférino to Luxembourg: The spirit of The Angelus painting before the Court of Justice of the European Union

Droit de suite. 

The Orsay Museum, one of the top three museums in Paris, is located on the left bank of the River Seine, close to the “Solférino” metro station. There one can admire the most famous painting by Jean-François Millet – The Angelus (L’Angelus). It represents a 19th century European trend towards folklore and countrysides.

Jean-François Millet – The Angelus, 1857–1859

The painting depicts two fatigued peasants who stop their work to pray. The church bells, which with monotonous regularity seem to set the rhythm of work and reflection, can almost be heard in the distance. Pray and work.

The Angelus is an exceptional painting because it also was the reason for the introduction of the “droit de suite” (resale right) to French law. Why? Fourteen years after the death of the painting’s author, Eugène Secrétan – then a copper market tycoon (known for the delivery of 60 tons of copper for the construction of the Statue of Liberty) – sold The Angelus for 553 000 francs, then a record sum of money (by the way, the author had sold it fourteen years earlier for 1000 francs). To top it off, Millet’s family lived in extreme poverty. Such injustice was compensated by means of legal instruments.

What is droit de suite?

The institution known in French as droit de suite (“right to follow”) is the author’s right to receive a royalty for the resale of their particular work of art. In other words, the author or their possible heirs may submit a claim against every reseller of the author’s work of art. The exhaustion of right does not apply in this situation (more about exhaustion of right can be found here: From poster to canvass. Exhaustion of rights in the judgment of the Court of Justice, file no. C-419/13. In economic terms, droit de suite is nothing but the right of the author to be united with their work.

Does it exist in Polish law?

Yes. It has existed in Polish law for almost 100 years. However, its current content has been shaped by the amendment of the Copyright and Related Rights of 2006. The amendment resulted from an obligation to implement Directive 2001/84/EC of the European Parliament and the Council of 27 September 2001. The Berne Convention also refers to droit de suite. Our Polish version of droit de suite refers to the resale of original photographic or visual works of art. Authors and their heirs are also entitled to a royalty in the amount of 5% of the price for professionally resold manuscripts of literary and musical works.

Thanks to the Directive, the European Union has a relatively uniform law in this respect. The Directive provides a framework for the institution of droit de suite and stipulates, in particular, that it is impossible to transfer this right to a third party or to waive it.

In Articles 3 and 4, the Directive provides for a minimum resale price to which the royalties on account of droit de suite apply, which cannot be higher than EUR 3000. If the set minimum resale price in a particular Member State is lower than EUR 3000, the Member State shall specify the minimum rate up to this level (the rate cannot be lower than 4%). In Poland, the lowest resale price to which the royalty on account of droit de suite applies has been set to EUR 100.

The percentage rates for particular resale levels are as follows:

  1. a) 4% or 5% for the portion of the sales price to EUR 50 000;
  2. b) 3% for the portion of the sales price from EUR 50 000.01 to EUR 200 000;
  3. c) 1% for the portion of the sales price from EUR 200 000.01 to EUR 350 000;
  4. d) 0.5% for the portion of the sales price from EUR 350 000.01 to EUR 500 000
  5. e) 0.25% for the portion of the sales price exceeding EUR 500 000.

However, the total amount of the royalty cannot exceed EUR 12 500.

Recitals 3 of the Directive read as follows: “The resale right is intended to ensure that authors of graphic and plastic works of art share in the economic success of their original works of art. It helps to redress the balance between the economic situation of authors of graphic and plastic works of art and that of other creators who benefit from successive exploitations of their works.” This was exactly the case with The Angelus.

Judgment of the Court of Justice of the European Union of 26 February 2015 (C-41/14, Christie’s) – who, in fact, pays?

Though the Directive is relatively clear, a doubt may be raised. Is it the buyer who shall bear the costs of the royalty for the benefit of the author (or their heirs) on account of droit de suite? Or is it an obligation of the seller? As a rule, the Directive obliges the seller to pay the royalty but it does not regulate who must / may bear the actual economic costs of this payment. This is also not subject to the harmonisation of the Directive. This relatively straightforward situation is also complicated by various language versions of the Directive. Some include a dichotomous division into entities that pay and the entities that should bear the actual costs. Such a division is not distinguished in the Polish, English or German version of the Directive.

Any doubts in this respect have been cleared by the decision of the CJEU (C-41/14) concerning the Christie’s auction house. The case has its basis in the claims of the French National Union of Antiques Dealers (Syndicat National des Antiquaires), which complained that Christie’s applied a contractual provision which the Union considered illegal — obliging the buyer of a work of art to cover the royalty on account of droit de suite. In the Union’s view this constituted an act of unfair competition. The court of first instance dismissed the lawsuit, the Court of Appeal declared the invalidity of the disputed clause and the French Court of Cassation, to which the case was referred, decided to submit the question to the CJEU.

What did the Court of Justice hold?

In justifying its judgement, the Court of Justice summarised its considerations and stated as follows:

Consequently, in a situation where a Member State adopts legislation which provides that the seller or an art market professional involved in the transaction is to be the person by whom the royalty is payable, Directive 2001/84 does not preclude those persons from agreeing, on the occasion of a resale, with any other person, including the buyer, that that other person will definitively bear the cost of the resale royalty due to the author, 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.

In other words, the CJEU stated that it is not contrary to EU law to specify, in an agreement, who — the seller or the buyer — shall bear the actual costs on account of the resale right, as long as this does not influence the situation of the person to whom the royalties on account of droit de suite are due.

Such a solution seems to be rational for several reasons. First, it results from the correct interpretation of the Directive itself. It is important to remember the purpose of that law is to provide the author or the author’s heirs with royalties (and this was included in the scope of harmonisation), and not to determine the person who should bear the costs. Not without significance are also the practical reasons. Had the Court of Justice ruled otherwise, a very possible economic result would be the seller increasing the price by a particular amount. The economic burden would, in fact, lie on the same shoulders but the harmonisation would be reaching too far and would thus become ineffective, thereby decreasing the authority of the EU legal order, which is not held in high regard anyway.

It’s also worth mentioning, in our opinion, in the present condition the CJEU’s judgement does not mean such contractual shifting of the economic burden on the buyer will always be lawful and acceptable. However, rather than in the Directive itself, a potential legal basis for questioning such type of clauses should be searched for in antitrust legislation (e.g. abusing a dominant position on a particular market or anti-competitive arrangements). But that’s a different story.

#auction #christie's #CJEU #copyright law #directive #Droit the Suite #EU law #pieces of art #resale #The Angelus #works of art

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