Resale Right Issue

RESALE RIGHT

The artist’s resale right is the subject of the hour in the world of copyright in visual arts and crafts, and its adoption in Canada will have a major impact for all creators of artistic works.

What is the resale right ?

You create works that you sell at modest prices, in order to make a name for yourself. Over the years, thanks to your talent and to the loyalty of several collectors who value your work, the value of your works has gradually increased. Compared to the current rating of your works, the sales prices of your first works seem almost ridiculous. In fact, one of your first works has just been sold through an auction house for almost twenty times the price at which you initially sold it.

The resale right, which is not yet adopted in Canada, would allow you to get a small percentage of the price of this resale of your work by a professional in the art market. This royalty benefits creators of artistic works themselves, as well as their rightful owners, for the term of protection of works under copyright law (currently in Canada, this protection exists during the life of a creator, then until the end of the fiftieth year following that of his death).

History

The droit de suite first appeared in France, where it was introduced in 1920, after the famous painting “L’Angélus”, painted by Jean-François Millet around 1857, was resold for a phenomenal sum, while the artist’s children lived in misery. By introducing a resale right, the French legislature sought to promote an equitable sharing of wealth between the creators of artistic works (or their heirs) and the resellers of those works.

According to the International Confederation of Societies of Authors and Composers (CISAC), of which SODRAC is a member, resale rights exist in more than 80 countries, including those in the European Union (e.g. Germany, Denmark , Spain, France, the Netherlands, etc.), as well as elsewhere in the world : Australia, Brazil, Mexico, the United Kingdom, Russia and many other countries.

The resale right is recognized as a fundamental right by the Berne Convention, which lays down the basis for the international protection of works in the field of copyright. Indeed, Article 14ter provides that a creator of artistic works (or his heirs) has an inalienable right to benefit from the resale operations of his works after a first sale.

However, the adoption of the resale right is not yet mandatory for the signatories to the Berne Convention, of which Canada is a member. Moreover, it is granted only on condition of reciprocity, which means that in order for an artist to be entitled to royalties following the resale of his works in a country where the resale right exists, the right must have been adopted in his own country.

The fact that it is not yet in force in Canada and in several other countries such as the United States (except California, where the resale right was introduced in 1976) and China, two of the main markets for the resale of works, still prevents creators from receiving royalties from the resale right when their works are resold in those countries.

This is one of the reasons why CISAC is pursuing a major campaign, in conjunction with the European Visual Artists (EVA) and the European Association of Authors and Composers’ Societies (GESAC), to promote the adoption of the resale right internationally.

Thanks to the concerted efforts of these organizations, the resale right has come to the attention of the World Intellectual Property Organization (WIPO)’s Standing Committee on Copyright and Related Rights (SCCR). The aim is to encourage WIPO and member countries to examine the issue to see how current international rules can be improved, including through the adoption of a treaty on resale rights.

For the adoption of a resale right in Canada

SODRAC has long been a champion of resale rights, in the wake of the Canadian Artists’ Representation / Le Front des artistes canadiens (CARFAC) and the Regroupement des artistes en arts visuels
du Québec (RAAV) campaign, with a view to its adoption in Canada. In 2010, as part of the review process of copyright and the successive filings of Bill C-32 and Bill C-11 on the modernization of the Copyright Act, SODRAC proposed the introduction of terms of a resale right that would have allowed all creators to receive a fair royalty resulting from the resale of their works.

But during this process the many requests from the creators’ groups to introduce a resale right to Canada were not accepted by the Ministers of Industry and Canadian Heritage. On November 7, 2012, the Copyright Modernization Act came into force without a resale right.

On May 29, 2013, Liberal MP Scott Simms introduced a bill on resale rights. Bill C-516 provides that creators of protected artistic works are entitled to a royalty on the resale of their works for all transactions at a price equal to or greater than a given amount. The following day, New Democratic Party MP Pierre Nantel tabled Motion M-445, which also called for the introduction of a resale right.

Although these efforts were not successful at the time (private members’ bills rarely see the light of day), they reflect the growing recognition of the importance of the resale right for creators.

The Copyright Act is to be subject to parliamentary scrutiny in 2017. In December 2016, in a report resulting from its pre-budget consultations in preparation for the 2017 federal budget, the Standing Committee on Finance of the House of Commons recommends “That the Government of Canada amend the Income Tax Act and the Copyright Act to ensure that artist resale rights in Canada are guaranteed. ”

The context therefore seems to be favorable to the adoption of a resale right in Canada.

The resale right: how does it work?

When a country adopts the resale right, it must define the legal framework for calculating the amount owed to creators (or their heirs) following the resale of their works and to effectively manage the collection of those royalties.

Many elements must be taken into account, such as:

– What are the resale transactions covered by the resale right?
– What is the minimum resale price from which the duty applies?
– What percentage is charged, on what amount?
– Who pays the resale right?
– How are royalties collected and distributed to artists?

In the case of the administration of resale rights, collecting societies such as SODRAC play an essential role because they possess the know-how, the expertise and the IT infrastructures that are necessary for the collection and distribution of royalties.

In Canada, SODRAC has been effectively managing the copyright of tens of thousands of creators over the past 30 years, in both languages, across the country. With its experience in licensing, collection and royalty sharing, as well as the IT tools it constantly develops to handle a growing amount of data and play a leading role in the fair remuneration of creators, SODRAC is perfectly suited to administer the resale right, for its own members but also for the benefit of all other canadian artists, whether or not they are represented by a collective society.

SODRAC is a non-profit collective management corporation run by a majority of creators. It operates internationally in an important network of sister companies with which it has reciprocal representation agreements. Since the vast majority of its sister companies operating a repertoire of artistic works are already collecting royalty royalties in their country, SODRAC will be in a position to collect royalty royalties arising from the resale of works by canadian creators as soon as the resale right is adopted in Canada.

To learn more

The International Confederation of Societies of Authors and Composers (CISAC), of which we are members, published a brochure in 2014 in collaboration with the European Visual Artists (EVA) and the European Grouping of Societies of Authors and Composers (GESAC).

This informative brochure, entitled “Artists for a Universal Resale Right”, is available here.