About the author: Magdalena is a trainee attorney-at-law and art enthusiast with expertise in intellectual property, advising private entities and galleries. She frequently travels between Warsaw and Milan, exploring European art markets, with a personal interest in Italian culture and literature. More about Magdalena
The Importance of Legal Knowledge in Art Collecting
In the world of art collecting, understanding the legal landscape is essential, especially when it comes to buying and selling artworks. One vital concept in the field of copyright law is the droit de suite, which ensures artists benefit from future sales of their works.
At its core, droit de suite gives artists a cut of the profits each time their work is resold, ensuring they remain connected to its value over time. For art market players, grasping how this legally recognized right impacts the purchase is crucial to building a proper collection – let’s delve into why that’s the case.
Key Concept: What is Droit de Suite?
The droit de suite allows artists to receive a percentage of the sale price when their works are resold in the secondary market. This means that the original creator, or their heirs, retains an economic interest in the subsequent sales of their artwork. Importantly, this specific resale right only applies to resale transactions and not to the initial sale, and it does not cover private sales.
Historical Context and European Integration
First introduced in France, droit de suite quickly spread across Europe. The EU standardized its application, ensuring that the law protects artists across member states, including Poland. To harmonize its enforcement across other member states, the European Union established a specific directive to guide its implementation. This resale right is currently provided by the domestic legislation of a majority of the member states. In Poland, its provisions can be found at paras. 19-19 (5) of the Act on Copyright and Related Rights.
The Christie's building in Paris, France © HJBC/Shutterstock
How Droit de Suite Works in Poland
Under Polish law, artists or their heirs are entitled to royalties from resales being “original works”. An original work of art encompasses a range of mediums, including pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware, and photographs, provided these are created by the artist or consist of limited copies authorized by them. Such copies, if produced in limited numbers and properly signed or numbered, are also classified as original works of art. In Poland, the percentage owed to the artist decreases as the sale price increases, but there’s a cap on the maximum amount they can receive, currently set at €12,500 per transaction.
Economic Impact: Calculating the Artist’s Share
The term “resale” is given to any sale following the first disposition of an original work of art and can be carried out by sellers, buyers, intermediaries, and any other entities professionally dealing with art trading (art galleries, auction houses, showrooms, etc., even if selling online).
The droit de suite entitles various types of artistic creators such as artists, musicians, and writers to a share of the profits when their artworks are resold, regardless of how they inherited that right and how or where the artwork was created. Importantly, artists cannot give up this right or have it waived, but they can choose to let a rights management organization handle its enforcement.
To benefit from droit de suite, artists must be Polish citizens, citizens of other EU or EFTA (European Free Trade Association) countries, or permanent residents in Poland at the time of resale. The royalties are owed to the author of the work, whether living or deceased, for less than 70 years.
Pursuant to the Copyright and Related Rights Act, the basis for calculating the remuneration for the artist under droit de suite is the price obtained by the seller for the professional resale of the work of art after deducting the value added tax payable on the resale of the original work. The costs of holding the auction, insurance, and other costs are not deductible when determining the basis for calculating the remuneration. The basis for calculating the remuneration will therefore be the price indicated by the parties in the contract, but it can be calculated on the price actually paid, as agreed by the parties.
Polish Law specifies the due percentages of the sale price depending on the amount of the price of an artwork. The percentages range degressively from 5% of the portion of the sales price, if that portion is included in the range up to the equivalent of €50,000, down to 0.25% (if this portion is included in the range exceeding the equivalent of €500,000). This applies to sales starting from €100, with a cap of €12,500 on remuneration. For every subsequent resale of work, the author or their heirs have a right to claim a percentage of the price paid by the purchaser. In terms of timing, claims must be made within six years from the end of the calendar year in which the sale occurred.
Case Study: Alina Szapocznikow's “Bird”
A perfect example of how this works is Alina Szapocznikow’s sculpture Bird. This iconic piece of work, created in the late 1950s in the artist’s studio on Królewska Street in Warsaw, was auctioned in 2016 for over PLN 1,9 million net (approximately €455,000). Despite the high sale price, the artist’s heirs were only eligible for a maximum royalty of €12,500 due to the cap, equivalent to PLN 53,750.
Why It Matters: Supporting Artists and Ensuring Fairness
Understanding the concept of droit de suite is not just a legal obligation for art collectors, but a vital aspect of fostering a fair and sustainable art market. It’s a way to honor the artists who created valuable works, ensuring they (or their heirs) share the success of future sales. For any serious collector, understanding droit de suite isn’t just a legal requirement, it’s a way to actively support the artists behind the works in your collection.
As modern and contemporary art collectors navigate the secondary market, keeping these principles in mind will not only enhance their collecting experience, but also ensure that the legacy of artists is honored and preserved. Being informed about these rights enables you to make thoughtful decisions that benefit both your collection and the broader artistic community.