DACS (The Design and Artists Copyright Society) – Supplementary Written Evidence (JTN0039)

Artist’s Resale Right

1. The Artist’s Resale Right (ARR) entitles artists to a royalty when their artwork is resold on the UK art market. Introduced into UK law in 2006, it ensures artists retain a financial interest in their artwork after it is sold for the first time and therefore benefit from subsequent sales.

2. Under the ARR Regulations there are criteria which must be satisfied in order for a sale of an artwork to be eligible – not all resales of artworks qualify for a royalty. The conditions to be met are:

• The sale of the artwork is a secondary sale. ARR does not apply on the first sale of an artwork
• An art-market professional must be involved in the sale, which includes auction houses, galleries or art dealers, but generally excludes museums or private individuals.
• The artwork being sold can be any copyright-protected work of graphic or plastic art, such as a painting, drawing, sculpture, tapestry, ceramic, glassware or photograph.
• The artwork must be unique or one of a limited number, which is unlikely to include mass-produced items.
• The artwork must sell for €1,000 or more (or the equivalent in Pound Sterling on the date of sale), or for over €10,000 if it is acquired directly from the artist and sold within three years.

3. When a sale fulfils the criteria, the royalty is calculated on a sliding scale as a percentage of the sale price, starting at 4% of a sale price of up to €50,000. There is a cap of €12,500 for any single royalty. After a formal request for information is made under the ARR Regulations, the amount is collected from the art-market professional involved and distributed to the rightsholder.

4. Many countries have a form of ARR in place and there is an international network of societies that administer royalties in their respective jurisdictions. Through this network a royalty can be collected on a qualifying resale in one country and transferred to another in order to distribute it to the artist or beneficiary, securing their financial interest across borders. However, if a country has a national ARR law but does not provide for reciprocity with other jurisdictions, this creates an unfairness where an artist can benefit from the resale of their work in one country but not another.

5. The art market is an international arena: a work which has sold in the UK can then be resold again in Japan. At present this would not entitle the artist to any royalty, as it would if the resale were in Europe.

6. A commitment to implementation of clearly defined ARR legislation into Japanese law would guarantee individual rightsholders in the UK would continue to benefit from such resales of their artworks in Japan.

Enforcement

7. Copyright creates commercial opportunities whereby artists enter into contracts with private companies for their artwork to be used or featured in its products. This can often result in financially lucrative agreements. When artwork is reproduced without the permission of the artist, known as copyright infringement, it adversely affects the business of these artists and companies.

8. UK legislation provides remedies for enforcement when an artist’s copyright is infringed in this way domestically, however the ability of an artist to enforce their rights in an overseas territory without adequate provisions is severely weaker. This threatens the security of valid agreements and can stifle business, as shown in the following example.

Case study:

DACS represents a British artist who uses a unique painting method to create eye-catching and distinctive artworks. She secured a contract with a drinks company to feature her works on their product packaging. Online shops based outside the UK have used images of the artist’s work and applied them to a range of merchandising including phone covers, laptop cases, wallpaper and cushions. The products are manufactured outside the UK and sell for a low price online to customers worldwide including in the UK. The online shops have ignored any correspondence from DACS in respect of the infringement of copyright and DACS has exhausted all avenues to pursue the sellers. The circulation of infringing goods in the UK marketplace interrupts the artist’s existing licensing arrangements with the drinks company and any future licensing for legitimate merchandising. In other words, copyright infringement taking place outside the UK has a double negative impact of devaluing the original works and discouraging legitimate businesses – including UK based businesses – from making authorised reproductions of the work.

9. The UK’s gold-standard IP framework gives strong protection to artists, safeguarding their copyright and allowing them to make commercial gain from their artwork with extensive rules and remedies. The agreement does not sufficiently harmonise with this framework, and so would not prevent an example like the case study above occurring.

10. Whilst copyright is mentioned it is only in relation to pirated goods which is commonly relevant to film or music. Procedures for infringements specifically related to visual copyright should be expressly stated in the agreement to adequately protect artists, whose livelihood can be inordinately affected as individuals engaged in financial activity.

6 November 2020