Term and fundamentals of the resale right
Das Resale right (also ‘droit de suite’) is a contractual and statutory right of the author of works of fine art or photographs in the field of fine art to receive a financial share in certain subsequent resales of their works after the first sale. The resale right is internationally recognized and, in particular, harmonized throughout Europe. Its purpose is to secure for creators a share in the rising market value of their works, especially when these are traded on the art market.
The resale right should not be confused with general copyright, but constitutes a specific partial right that exists in addition to copyright protection. The statutory basis in Germany can be found, among others, in Section 26 of the Copyright Act (UrhG).
Origin and Historical Development
The idea of the resale right originated in 19th-century France after it was observed that artists, unlike owners of significant works, often did not profit from interim substantial price increases. The French Copyright Act first introduced the resale right (‘droit de suite’) in 1920. Since then, numerous European countries have followed suit. The European Union became a driving force in harmonization with the ‘Resale Right Directive’ (2001/84/EC).
Legal Sources and Regulatory Content
National Law
In Germany, the resale right is codified in Section 26 of the UrhG. It concerns the ‘participation of the author in the proceeds from the resale of the original of a work of fine art or photography.’ The right is absolute and cannot be contractually excluded or assigned.
European Law
With Directive 2001/84/EC, the resale right was unified in Europe. The Directive obliges all Member States to introduce a resale right for authors of original works of art and sets, among other things, minimum standards for the assessment and enforcement of the right.
International Law
The resale right is also the subject of international agreements. The revised Berne Convention (Art. 14ter BC) regulates the resale right as an optional right for contracting states, though subject to the principle of reciprocity.
Personal and Material Scope of Application
Beneficiary Authors
The resale right is principally granted to the original author of a work of fine art or photography. After the author’s death, heirs may exercise the right (see Section 28 UrhG).
Beneficiary Works
Only originals and copies made by the author that are recognized as works of art or photographs are affected. Mass production and industrial goods are excluded.
Resale Transactions
The resale right applies only to certain subsequent resales, particularly when an art dealer, gallerist, auctioneer, or comparable institution is involved as seller, buyer, or intermediary. Sales between private individuals or direct sales by the author to the end buyer are excluded.
Legal Structure and Prerequisites
Requirements for Claims
- Originality: It must be an original of a work of fine art or a signed, author-authorized copy.
- Professional Art Market: The sale must be conducted through an art dealer, auctioneer, gallerist, or similar intermediary.
- Cross-border Applications: The right is only granted if a resale right also exists in the buyer’s country (principle of reciprocity in international sales).
Entitled and Obligated Parties
- Entitled: The author or their heirs.
- Obligated: Generally the seller, but often contractually transferred to the business (galleries, auction houses).
Calculation and Amount of the Resale Right Fee
The fee is tiered (degessive), calculated as a percentage of the net sale proceeds, and must not exceed a specified cap. In Germany, the claim to the resale right amounts to:
- 4% for the portion of the sale proceeds up to 50,000 euros
- 3% for the portion from 50,000.01 to 200,000 euros
- 1% for the portion from 200,000.01 to 350,000 euros
- 0.5% for the portion from 350,000.01 to 500,000 euros
- 0.25% for amounts exceeding 500,000 euros
The maximum claim is statutorily limited to 12,500 euros per sale.
Enforcement and Administration of the Resale Right
Assertion
Assertion is usually carried out by the author or their heirs via collecting societies such as VG Bild-Kunst in Germany. These societies conduct collective rights management in particular, distribute collected amounts to entitled parties, and represent their interests.
Right to Information
For effective enforcement, Section 26 (4) UrhG grants the author a right to information against sellers and art dealers, to find out about the resale and the proceeds achieved.
Limitation period
Claims arising from the resale right become time-barred pursuant to the general rules of the German Civil Code after three years from knowledge of the claim and the obligated party.
Deviating and Supplementary Provisions
Certain special features arise from national regulations, in particular regarding
- the definition of affected works,
- the minimum threshold for a payable sale price (currently 400 euros in Germany),
- the tax treatment of income from resale rights,
- issues surrounding international enforcement and application in cross-border transactions.
Significance and Practical Implications
The resale right contributes to the financial security of artists and partially offsets market imbalances. It influences the market mechanisms of the art trade, as it must be taken into account both at auctions and in private sales. At the same time, it puts the balancing of interests between creative individuals and the art trade at the center.
Summary
The resale right ensures that creators of fine art and their heirs participate financially in the appreciation in value of their works in the art market. It is an independent, non-transferable right that is particularly anchored in European law. With fixed remuneration rates, clear requirements for claims, and a statutory right to information, the resale right is a central protective instrument under copyright law and makes a significant contribution to promoting creative work and recognizing artistic achievement in the art market.
Frequently Asked Questions
Who is entitled to benefit from the sale of an artwork under the resale right?
Entitlement to the resale right under German law (Section 26 UrhG) belongs exclusively to the visual artist or, in the event of their death, their heirs. The resale right cannot be transferred to third parties, not even by contract during one’s lifetime, but passes exclusively by inheritance to lawful heirs. This means that when a work of art is resold, the artist or their heirs are entitled to a share of the proceeds. The prerequisite is that these must be originals or authentic copies of fine art (such as paintings, sculptures, or photographs), and the sale must take place through an art market participant (especially galleries, auction houses, or art dealers). Artists who do not hold citizenship of an EU country can only claim the resale right if a comparable remuneration obligation exists in the artist’s country of origin (the so-called principle of reciprocity).
How is the resale right fee calculated and what is its amount?
The resale right fee is calculated according to the sale price excluding VAT, based on a statutory scale. The rate is 4% for the first 50,000 euros of the sale price and decreases incrementally down to 0.25% for anything above 500,000 euros. The total sum of the fee for a single sale is capped, and may not exceed 12,500 euros, even for substantially higher sale prices. The net sale price, less any taxes and fees, is always decisive, so for example, premiums charged by auction houses do not generally increase the amount to be remunerated. If there is doubt about the work’s originality, an assessment by an expert may be conducted.
Which works of art are subject to the resale right?
The resale right applies exclusively to originals of fine art and works of applied art, in particular to paintings, drawings, sculptures, collages, graphic prints, photography, and arts and crafts (designer objects and unique works). Works that have been produced in industrial series without limitation of edition size, or which are not handmade unique pieces or limited editions, are excluded. Literary works, music, or digital artworks are also excluded from the resale right, provided no physical originals exist.
What duties and deadlines must art dealers and auction houses observe with respect to the resale right?
Art dealers, auction houses, and galleries are required under the Copyright Act to provide detailed information about sales and the calculated fee within three years of the sale. At the request of the entitled party, they must disclose whether a work has been sold, the price, and to whom. If a sale has taken place, they must pay the resale right fee within one month upon receiving a corresponding payment request. They are also obliged to independently calculate and remit the fees due. Failure to do so may result not only in a requirement to make back payments plus interest, but also potential damages if the artist loses income due to the omission.
Can artists waive or assign the resale right?
Under German law, the resale right is considered mandatory and is subject to a statutory prohibition on assignment and waiver (Section 29 UrhG). This means that an artist cannot effectively waive the fee in advance, nor can they transfer the resale right to a third party, such as a gallery or collector, during their lifetime. In the event of the artist’s death, however, the right passes to the heirs by operation of law, as previously explained. A subsequent waiver regarding an already accrued claim (i.e., after a sale has occurred) is legally possible, but requires a clear and express declaration of intent by the entitled party.
What happens in the case of a sale abroad or cross-border sales?
The resale right is generally subject to national law. If a work of art is sold in Germany, German law and the German resale right apply. If the sale takes place abroad, the relevant national regulations there are decisive. However, in all countries of the European Union, comparable provisions exist due to the EU Resale Right Directive, so claims may often also exist cross-border. In cases where works of art are, for example, sold via a German online platform to a buyer abroad, it must be examined in which country the sale was legally ‘completed’, as this affects which resale right applies.
How is the enforcement and processing of the resale right handled in practice?
Assertion and processing of the resale right in Germany are usually handled by collecting societies such as VG Bild-Kunst, where artists can become members to efficiently bundle and assert their claims. Heirs may also apply for membership. These collecting societies monitor the market, manage the claims collectively, keep lists of relevant transactions, and handle communication with art dealers and auction houses. Alternatively, artists and heirs may assert the right independently. If the dealer is obliged to pay, payment is made to the entitled party or to the collecting society. If there are disputes about the obligation or the amount of payment, legal recourse is available: a claim may be enforced out of court or, if necessary, in court, with the competent regional court at the dealer’s registered office regularly being approached.
