What is it

The droit de suite, or artist's resale right, is an attempt to put artists on an equal footing with other authors of copyright works such as writers, composers and performers by ensuring they receive a royalty on sales of their work. It will give artists during their lifetime, and their successors for seventy years after the artist's death, the right to receive a royalty on the sale price of their works. And the opportunity to share in the appreciation of the value of their works as a result of the artist's continuing success.

Implementation

It will apply to living artists and must be implemented into UK law by 1 January 2006. The UK has an extension until 1 January 2010 to implement the provisions of the Directive that apply to deceased artists and their estates. They can also request a further extension of up to two years, to enable "economic operators" to adapt to the droit de suite "while maintaining their economic viability", before they are required to apply the droit de suite for the benefit of deceased artists and their estates.
This could include giving collecting societies time to put procedures in place to collect royalty payments on behalf of deceased artists and their estates and to distribute them. The full application of the droit de suite may not therefore become part of UK law until 2012

How does it work?

It will apply to all acts of resale subsequent to the first sale by the artist, involving as sellers, buyers or intermediaries art market professionals such as salesrooms, art galleries and, in general, any dealers in works of art.
Member States may provide an exception from the droit de suite for acts of resale where the seller has acquired the work directly from the artist less than 3 years before the resale and where the resale price does not exceed €10,000 (about £6,215). It applies to "original" works of art that are protected by the law of copyright on 1 January 2006.
The droit de suite will therefore only apply to sales of modern art.

Original works of art are defined as "works of graphic or plastic art such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs".
That are made by the artist himself or are copies of works of art which have been made in limited numbers by the artist himself or under his authority.

The droit de suite is unassignable and inalienable.
It cannot be transferred, sold or waived. This protects artists from the vulnerable position that many writers and performers find themselves in when a publisher or production company demands that they assign their copyright or waive their moral rights in a work.

The royalty is payable by the seller and is calculated on a tapering scale as the sale price of the work increases. The directive specifies that these rates are net of tax. The maximum royalty an artist may receive per sale is about £7,820. Member States are free to set a minimum sale price from which the droit de suite will apply, but this must not be less than €3,000 (about £1,900).
This will give artists a minimum royalty of about £76.

To enable artists to collect the royalty, Member States must provide that, for a period of three years after the sale of a work of art, artists (and their successors), can require information from any art market professional who sold the work in order to secure payment of the royalties due to them in respect of that sale.

Arguments

The droit de suite will be implemented in the UK but it has raised concerns.

The London art market sees serious disadvantages to the droit de suite. London is the largest art market in Europe and the second largest art market in the world. Auction houses, commercial galleries and dealers are extremely worried that the droit de suite will cause a loss of business because it will force sale prices and administration costs to rise and sales will shift to either New York or Geneva, where there is no droit de suite.

Artists argue that any benefit they receive from the droit de suite will be negligible or even non-existent because sale prices will drop to take account of the extra charge and the administration costs involved in operating the droit de suite. Alternatively, sales of art will be private, circumventing the droit de suite and any benefit to the artist altogether.

Another consideration is the number of artists and their families that will actually benefit from the droit de suite. It is only commercially successful artists - a significant proportion of whom will be dead - who will get any significant value from this new right. Furthermore, the maximum royalty an artist can expect to receive per sale is only about £7,820. Artists looking to the droit de suite as a significant source of income would do better to re-examine the commercial arrangements that they already have, particularly those for the reproduction of their works.