Following a reference for a preliminary ruling proposed by the French Court of Cassation, the European Court of Justice recently ruled on the interpretation of Directive 2001/84/EC about the resale right for the benefit of the author of an original work of art (case C-41/14, Judgment of February 26, 2014).
The issue had been raised in a dispute between Christie’s France SNC and the national association of antique dealers (the “SNA”), relating to the alleged unfair competition made by the famous auction house to the detriment of the association, because of a clause included in Christie’s general conditions of sale.
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In particular, the clause at issue made the buyer responsible for the payment of the resale right to the author, in violation – according to the antique dealers – of Article L. 122-8 of French Intellectual Property Code, under which: “authors of original works (…) shall enjoy a resale right, which is an inalienable right to participate in the proceeds of any sale of a work subsequent to its first transfer by the author or by those entitled under him or her, where a professional in the art market participates as seller, buyer or intermediary. (…) The royalty shall be payable by the seller. The person liable for payment of the royalty shall be the professional person involved in the sale and, if the transfer is made between two professional persons, the seller”. This rule is the implementation of Article 1 (4) of Directive 2001/84/EC, which provides that: “the royalty shall be payable by the seller. Member States may provide that one of the natural or legal persons (…) other than the seller shall alone be liable or shall share liability with the seller for payment of the royalty”.
The “Cour de cassation” asked the ECJ the following preliminary question: whether Article 1 (4) of Directive 2001/84 must be interpreted as meaning that the seller is required definitively to bear the cost of the royalty or whether, instead, is possible any derogation by agreement from it (making the buyer responsible as in Christie’s clause).
In this context, the Court of Justice noted that the Directive at issue has two essential objectives: “to ensure that authors of graphic and plastic works of art share in the economic success of their original works of art” and to eliminate the existing differences between national laws that could lead to unequal treatment between artists depending on where their works are sold.
The achievement of such purposes – the Court stated – is not precluded by the fact that the seller, identified as the debtor of the resale right by the national law of reference, on the occasion of a resale, agree with any other person, including the buyer, that such other person will definitively bear the cost of the resale royalty due to the author. However, so that the Directive is not violated, such a contractual arrangement must not affect the obligations and liability assigned to the debtor identified by law towards the author.
Based on these reasons, the Court answered the question of interpretation devolved to her, stating that: “Article 1(4) of Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art must be interpreted as not precluding the person by whom the resale royalty is payable, designated as such by national law, whether that is the seller or an art market professional involved in the transaction, from agreeing with any other person, including the buyer, that that other person will definitively bear, in whole or in part, the cost of the royalty, provided that a contractual arrangement of that kind does not affect the obligations and liability which the person by whom the royalty is payable has towards the author”.