Wednesday, 12 April 2017

Author of Wall Street Charging Bull is raging over Fearless Girl, but does he have a valid moral right claim?

Fearless Girl
Readers will be aware that last month a sculpture by Kristen Visbal, entitled Fearless Girl, was unveiled in Manhattan's Financial District as an advertisement for an index fund which comprises gender diverse companies that have a higher percentage of women among their senior leadership [read the Wikipedia entry here]Fearless Girl was placed opposite the well-known (originally guerrilla art) Charging Bull by Italian-born sculptor Arturo Di Modica. It is arguable that it is indeed because of this particular positioning that Visbal's artwork appears so powerful.

Initially Fearless Girl was expected to stay in place just for a few weeks, but in late March it was announced that the sculpture would not be removed until February 2018. Despite some criticisms, one of the reasons of the success of Fearless Girl appears to be its perception as a symbol of female empowerment and strength. Visbal has stated that she was careful to keep the girl's features soft to communicate that she is not defiant or belligerent: she is rather brave, proud and strong.

Not everyone, however, appears happy with the statue remaining: several newspapers report that later today Di Modica will hold a press conference explaining more at length why he intends to challenge the decision of New York mayor Bill de Blasio. The principal reason why Di Modica is against Fearless Girl seems to be that he believes that the integrity of his bull is in peril: contrasted with the soft, altruistic characteristics of the bronze girl, Charging Bull now appears menacing and aggressive, according to its author.

Di Modica might bring an action for copyright infringement. But what chances of success would he have since no economic rights seem at stake in this case? What Di Modica might have in mind is an action based on moral rights infringement, notably the right of integrity.

Moral rights in Berne

At the international level it is the Berne Convention that articulates the minimum legal content of the moral rights of attribution and integrity, as developed by continental European case law and doctrine. Article 6bis states that, independently of the author's economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work, and object to any distortion, mutilation or other modification of, or other derogatory action in relation to, his/her own work, that would be prejudicial to his/her honour or reputation. 

A Fearless Girl facing a Charging Bull
Since the Convention merely provides minimum standards, the way in which Berne countries have intended and applied moral rights varies greatly. Differences are pronounced even within Europe. In some, so-called ‘monistic’ copyright regimes, eg Austria and Germany, the moral rights last as long as the economic rights. In the UK and Ireland, moral rights likewise last as long as economic rights, but in these Member State moral rights may be waived. In the ‘dualist’ conception of copyright in droit d'auteur jurisdictions, such as France and Italy, moral rights are separate from patrimonial and economic rights, are perpetual, and may not be waived.

Moral rights in the US

As far as the US is concerned, moral rights protection is currently [the US Copyright Office is undertaking a public study on moral rights] narrow, especially if compared to droit d'auteur jurisdictions. Introduced in 1990 through the Visual Artists Rights Act, §106A of the US Copyright Act is arguably the only moral right provision under US copyright law, and its scope is limited. While acknowledging the moral rights of attribution and integrity, this provision only applies to 'works of visual arts' which are narrowly defined under §101. 

Although Di Modica's sculpture might potentially qualify for protection under §106A, the right of integrity envisaged therein is only actionable in relation to a "distortion, mutilation, or other modification of the work which would be prejudicial" to the honour or reputation of the author. Arguably Fearless Girl and its positioning have not resulted in any derogatory action on or treatment of Charging Bull.

In addition, §106A(c) sets significant exclusions to moral rights protection. Of particular interest here is that "[t]he modification of a work of visual art which is the result of conservation, or of the public presentation [can the addition of Fearless Girl be considered part of the Charging Bull's public presentation?], including lighting and placement, of the work is not a destruction, distortion, mutilation, or other modification ... unless the modification is caused by gross negligence." (emphasis added)

It would appear that in the present case §106 could not be an easy one for Di Modica to rely upon. While under US law he might have claims under other areas of the law (possibly defamation? It might be far-fetched but perhaps not to be ruled out at the outset), if he wished to explore if any opportunities under copyright law might be available, then he might want to explore his Italian roots a bit further.

Arturo Di Modica
Moral rights in Italy

Being an Italian citizen, he could in fact rely on Article 185(1) of the Italian Copyright Act in fact clarifies that the provisions contained therein are applicable to any works by Italian authors, wherever published for the first time. 

Similarly to France and as mentioned above, also under Italian law moral rights protection is generous. As far as the right of integrity is concerned, Article 20(1) states that the author of a work can object to "any deformation, mutilation or any other modification, and any other damage to the work itself, that can be prejudicial to his/her honour or reputation." (emphasis added)

However, also in this case, the damage at issue (which does not necessarily require a treatment of or action in respect of the work) must be prejudicial to the honour or reputation of the author, not the work. Is the positioning of Fearless Girl to be regarded as prejudicial to the honour and reputation of Di Modica? For a court that might be hardly the case, even within a moral rights-friendly legal system.

Conclusion


It will be interesting to hear what Di Modica says in his press conference, and whether any proceedings are actually brought. In any case, litigation based on moral rights alone might be hard to win. But what do readers think?

[Originally published on The IPKat on 12 April 2017]

Tuesday, 11 April 2017

Am I covered by that UK copyright exception? Here's my checklist

Determining whether a certain, unauthorised use of a work is shielded from liability by means of an exception is not an easy exercise. Things may get even more complicated if the applicable law is that of a country, eg the UK and all the other EU Member States, that does not have an open-ended fair use-style exception but rather requires one to, first, identify what exception might be applicable to the case at hand and, secondly, verify that all the relevant conditions for the application of that particular exception are satisfied.

As part of my IP Materials Series, I have prepared a high-level checklist for my students (currently busy with their IP revision) of the questions to ask when determining whether a certain exception in the Copyright, Designs and Patents Act (CDPA) is actually applicable to the case at hand.

[Of course, the checklist is only meant as a study aid, and does not pretend to be an exhaustive assessment of UK copyright exceptions. It should be noted that in any case consideration of exceptions follows logically the establishment of a prima facie infringement, as I tried to explain in my Copyright Infringement Checklist]

Here we go:


 The rationale of the various questions

Answering questions a) and b) serves to rule out at the outset the applicability to the particular case considered of exceptions whose beneficiaries are limited (eg in the case of exceptions for libraries, archives, public administration, educational establishments, persons with disabilities) or only apply to certain types of works (eg computer programs or databases). In a sense, these are preliminary questions to be considered and addressed.

The core of the assessment regarding the applicability of a certain exception to a specific instance is answering questions c) to e).

Question c) requires consideration of whether a certain exception requires a number of conditions to be satisfied. For instance, the new (introduced in 2014 and yet to undergo judicial consideration) exception for quotation within section 30(1ZA) requires that: (1) the work has been made available to the public; (2) the use of the quotation is fair dealing with the work [this would go under question e)]; (3) the extent of the quotation is no more than is required by the specific purpose for which it is used, and (4) the quotation is accompanied by a sufficient acknowledgement (unless this would be impossible for reasons of practicality or otherwise).

Question d) requires one to determine whether the exception considered is only applicable to use of a work for certain, specified purposes. While section 30(1ZA) does not require that the quotation is made for any particular purposes, the same is not the case for other exceptions, such as criticism o review (section 30(1)), news reporting (section 30(2)), caricature, parody or pastiche (section 30A).

Question e) is a crucial one for those exceptions that are framed within fair dealing. The CDPA does not contain a definition of ‘fair dealing’, nor does it stipulate what factors are to be considered when assessing whether a certain dealing with a work is to be considered fair. The notion of ‘fair dealing’ has been thus developed though case law from the perspective of a “fair-minded and honest person” (Yelland), and has been traditionally been considered a matter of degree and impression (Hubbard). A number of considerations may inform the decision whether a certain use of a work is fair, although the relative importance of each of them will vary according to the case in hand and the dealing at issue. Citing with approval a passage from leading UK copyright treatise on The Modern Law of Copyright and Design by Laddie, Prescott and Vitoria, in Ashdown [recently recalled by Arnold J in Fanatix, noted hereLord Phillips noted the impossibility of laying down

"any hard-and-fast definition of what is fair dealing, for it is a matter of fact, degree and impression. However, by far the most important factor is whether the alleged fair dealing is in fact commercially competing with the proprietor's exploitation of the copyright work, a substitute for the probable purchase of authorised copies, and the like ... The second most important factor is whether the work has already been published or otherwise exposed to the public ... The third most important factor is the amount and importance of the work that has been taken. For, although it is permissible to take a substantial part of the work (if not, there could be no question of infringement in the first place), in some circumstances the taking of an excessive amount, or the taking of even a small amount if on a regular basis, would negative fair dealing."

Finally, answering question f) requires one to consider other factors that might have an impact on the actual applicability of a certain exception. So, for instance, while applicability of the exception for caricature, parody or pastiche within section 30A cannot be overridden by contract (such terms would be unenforceable), the exception is without prejudice to an author’s moral rights.

An example

To clarify further the approach required under UK law, the table below considers the case of an unauthorised, slightly altered reproduction of an extract from a third-party literary work (eg a novel) and the possible considerations to be undertaken regarding whether the criticism or review (section 30(1)), quotation (section 30(1ZA) or parody (section 30A) exceptions would be applicable [note that is it not excluded that other exceptions might also come into consideration, eg news reporting] to the defendant’s act (of course, all this assuming that in the case at hand there is a prima facie copyright infringement):


Is the exception limited to certain, specified beneficiaries?
Is the exception limited to certain subject-matter?
Are the conditions provided for in the relevant provision respected?
Does the relevant provision envisage that the use is for a certain specified purpose?

Must the use at hand be ‘fair dealing’ with the work in question?

Other considerations (eg contractual override)?

Criticism or review (section 30(1) CDPA)
No
No
(1) Sufficient acknowledgement (unless this would be impossible for reasons of practicality or otherwise)
(2) Work has been made available to the public
Yes: criticism or review
Yes
No
Quotation (section 30(1ZA) CDPA)
No
No
(1) Work has been made available to the public
(2) Extent of quotation is no more than is required by specific purpose for which it is used
(3) Sufficient acknowledgement (unless this would be impossible for reasons of practicality or otherwise)
[fair dealing is under question e)]
No
Yes
Yes: contractual override prohibited
Parody (section 30A CDPA)
No
No
No
Yes: parody
Yes
Yes: contractual override prohibited

[Originally published on The IPKat on 11 April 2017]

Sunday, 9 April 2017

Can you use the Pope's image on T-shirts and gadgets?

Well, the answer seems to be in the negative if the use has not been preventively authorised by the Holy See.

In a statement released earlier this year, the Secretariat of State warned against unauthorised use and misuse of the image of Pope Francis:

"The Secretariat of State includes among its responsibilities the protection of the image of the Holy Father, so that his message may reach the faithful intact, and so that his person is not exploited.

For the same reasons, the Secretariat of State safeguards all symbols and official coats of arms of the Holy See via the appropriate regulatory instruments at international level.

To render this protection increasingly effective for the aforementioned purposes and to stop any illegal situations that may arise, the Secretariat of State carries out systematic surveillance activities to monitor the ways in which the image of the Holy Father and the coats of arms of the Holy See are used, taking appropriate action where necessary."

According to Corriere della Sera, the Secretariat of State has hired a well-known law firm to monitor and repress any unauthorised third-party uses of the image of His Holiness. 

Overall, this move may be justified in light of the great popularity of Pope Francis among Catholic people. This, together with easy access to the Pope's photographs online, has likely resulted in an increasingly important (and profitable) market for memorabila carrying his image, says AP.

Pope Francis - The T-shirt
But what are the legal grounds for cease-and-desist letters sent on behalf of the Vatican in this specific instance?

Canon law and the laws directly adopted are the primary sources of the law for the Vatican, whose legal system also conform to the general principles of international law, as well as the provisions included in the main international treaties and agreements to which the Holy See is a party. 

However, for civil matters in respect of which there is no specific Vatican law - as long as they are compatible with Vatican laws and the principles of canon law, and excluding a number of areas (eg citizenship, marriage, adoption, employment law) - the Vatican observes the provisions contained in the Italian civil code.

[Those interested in the Vatican's system of sources of the law can find everything they need here]

As far as the unauthorised use of the Pope's image is concerned, this is likely to be handled as an image right issue [and - I dare to add - potentially also as an unfair competition issue, considering how broad and expansive Italian unfair competition is - see further below, particularly sub Article 2598 No 1].

Article 10 of the Italian civil code sets out the right to have one's own image protected. The provision states [WARNING: Kat-translation]

"If the image of a person, their parents, their spouse or their children is used or published outside the cases in which use or publication is allowed by the law, or in such a way as to cause prejudice to the honour or reputation of the person themselves or their said relatives, a judicial authority [read: judge], upon request of the person, can repress the violation and order payment of damages."

What is interesting is that in Italy image right protection is particularly strong. Courts have interpreted Article 10 generously, and even held that the infringement of one's own image right subsisted in situations in which one's own image had not been even used, but merely 'evoked'. 

Pope Francis - The keyring
Readers may remember that - recently - this is indeed what happened [Katpost here] in respect of an advertisement featuring a model that 'evoked' the image of Audrey Hepburn's character (Holly Golightly) in Breakfast at Tiffany's.

Of course, the statement of the Secretariat of State also mentions unauthorised use of the symbols and official coats of arms of the Holy See. Here it is likely that the provisions invoked would be those relating to trade mark protection, and also unfair competition within Article 2598 of the Italian civil code. 

As I mentioned, protection against unfair competition in Italy has followed an expansive approach, also because the relevant provision has a loose wording [see in particular Article 2598, No 3]. It in fact states that [WARNING: Kat-translation]:

“Standing the provisions on the protection of distinctive signs and patents, anyone who commits any of the following is liable for unfair competition: 

1.    uses names or distinctive signs that are likely to be confused with the names or distinctive signs lawfully uses by others, or slavishly imitates the products of a competitor, or with any other means commits acts that are likely to create confusion with the products and activity of a competitor;
2.    divulges information on or reviews of the products and activity of a competitor, that are likely to discredit or misappropriate the qualities of the products or activity of a competitor;
3.    uses directly or indirectly any other means that does not comply with the principles of professional fairness and is likely to harm third-party activities.”

This latest Vatican move is probably to be seen as part of a series of recent initiatives to protect the Holy See's IP [in 2011 the Vatican adopted its own copyright law]. It will be interesting to see whether cease-and-desist letters will suffice to put an end to unauthorised exploitation of the Pope's image, or court action will become necessary ... at least in certain instances.


[A Katpat to Shabtai Atlow (Cisco) for bringing this story to the IPKat's attention]

[This post was originally published on The IPKat on 9 April 2017]

Saturday, 8 April 2017

Can a public domain artwork be registered as a trade mark or would that be contrary to public policy and morality?

When can an artwork be registered as a trade mark? The question is not an easy one, and may be complicated further by consideration that the artwork at hand may be no longer eligible for copyright protection due to the expiry of the term of protection. This means that the question may turn out to be not just one relating to the requirements for trade mark registration, but also involve broader, public interest considerations that relate to the opportunity to continue protecting by means of other IP regimes items (works) in relation to which the primary IP right (in this case, copyright) is no longer available.

All these issues were at stake in a case that the EFTA Court [this court has jurisdiction with regard to EFTA States which are parties to the EEA Agreement, ie Iceland, Liechtenstein, and Norway] decided earlier this week and that, while pending, had attracted considerable attention [also the European Copyright Society issued an Opinion on it]: it is Case E-5/16 - Norwegian Board of Appeal for Industrial Property Rights – appeal from the municipality of Oslo.

This case arose further to a request for an advisory opinion of the EFTA Court pursuant to Article 34 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice [that is, something similar to the EU system of references for a preliminary ruling to the Court of Justice of the European Union], and concerned interpretation of the Trade Mark Directive 2008/95 [yes, EFTA countries are not part of the EU but are subject to EU legislation, being part of the European Economic Area].

Background

On consideration that a number of artworks by Norwegian artists [notably Gustav Vigeland] would soon enter the public domain under the Norwegian Copyright Act, the Oslo Municipality (which manages several of these copyrights) is seeking to register a number of artworks as trade marks.

The Norwegian Industrial Property Office (NIPO) rejected some applications tout court, holding that the signs at issue lacked distinctive character or consisted of a shape that adds substantial value to the goods [Article 3(1)(b)-(c)-(e) of the Trade Mark Directive], while in respect of other applications registration was granted for certain types of goods and services.

The Oslo Municipality appealed the decisions to the Board of Appeal, which - in addition to the grounds considered by NIPO – wondered whether registration should be also refused on grounds of public policy and morality [Article 3(1)(f) of the Trade Mark Directive]. More specifically, the Board of Appeal was unsure whether trade mark registration of public domain works might, under certain circumstances [notably when the artwork in question is well-known and has significant cultural value], be against “public policy or accepted principles of morality” and thus fall within the absolute ground for refusal within Article 3(1)(f) of the Trade Mark Directive.

The Board of Appeal decided to seek guidance on this point (as well as interpretation of Articles 3(1)(e)(iii), 3(1)(c), and 3(1)(b) of the Trade Mark Directive) from the EFTA Court. In my view the most interesting part of the judgment is indeed the one concerning refusal of registration on public policy/morality grounds. 

Norwegian sculptor
Gustav Vigeland
The role of the public domain in copyright

In addressing this issue, the Court noted at the outset that copyright and trade mark law pursue different aims and, in principle, nothing prevents both rights from subsisting simultaneously [para 62].

With specific regard to copyright, the rationale of having a limited duration is to serve the principles of legal certainty and protection of legitimate expectations, but is also functional - to some extent – to fulfilling the general interest in protecting creations of the mind from commercial greed and ensuring the freedom of the arts [para 65].

More specifically,

“The public domain entails the absence of individual protection for, or exclusive rights to, a work. Once communicated, creative content belongs, as a matter of principle, to the public domain. In other words, the fact that works are part of the public domain is not a consequence of the lapse of copyright protection. Rather, protection is the exception to the rule that creative content becomes part of the public domain once communicated.” [para 66]

Trade mark protection

Turning to trade mark law, the EFTA Court observed that trade mark protection intends to ensure market transparency and assumes an essential role in a system of undistorted competition [para 67]. It is to fulfill these functions that trade mark protection is potentially indefinite [para 68].

Having said so, however, because of “the potentially everlasting exclusivity afforded to the proprietor of a trade mark, there are several conditions that must be fulfilled in order for the trade mark to be registered” [para 69].

Trade marks for out-of-copyright works

Turning to consideration of the specific case at issue, the Court found that a trade mark based entirely on copyright-protected work presents “a certain risk of monopolisation of the sign for a specific purpose, as it grants the mark’s proprietor such exclusivity and permanence of exploitation which not even the author of the work or his estate enjoyed” [para 70, also referring to paragraph 52 in the 2003 Opinion of Advocate General (AG) Ruiz-Járabo Colomer in Shield Mark].

Hence (in principle),

“The interest in safeguarding the public domain … speaks in favour of the absence of individual protection for, or exclusive rights to, the artwork on which the mark is based.” [para 72]

One of the artworks that Oslo municipality
is trying to have registered as trade marks:
The Angry Boy (Sinnataggen)
The rationale of the various absolute grounds for refusal of registration

According to the Court this also follows from consideration of how Article 3(1)(b) to (e) of the Trade Mark Directive acknowledges the need to keep a sign available for general use [para 73, referring to paragraphs 33 ff in the 2008 Opinion of AG Ruiz-Járabo Colomer in Adidas]. Having said so, it is possible that distinctive character is acquired through use, thus paving the way to registration of a sign that ab initio would have not been otherwise eligible for protection as a trade mark. Thus, the grounds for refusal sub Article 3(1)(b)-(d) do not ensure that a certain sign is generally kept free for use over time.

Unlike the absolute grounds for refusal sub Article 3(1)(b)-(d), the absolute ground relating to shapes (Article 3(1)(e) of the Trade Mark Directive) cannot be overcome by acquired distinctiveness [para 79] and, overall, “it overwhelmingly seeks to protect competition” [para 80, referring to paragraph 74 in the 2010 Opinion of AG Mengozzi in Lego].

The role of public policy/morality as an absolute ground for refusal

Turning to Article 3(1)(f) of the Trade Mark Directive, the EFTA Court noted that the absolute ground therein is somewhat more ‘absolute’ than Article 3(1)(e) in that it does not require consideration of the classes of goods and services for which registration is sought [paras 81-82].

The Court then observed that Article 3(1)(f) refers to public policy and morality: while in certain cases these two limbs may overlap [para 85], these concepts are not synonyms:

“refusal based on grounds of “public policy” must be based on an assessment of objective criteria whereas an objection to a trade mark based on “accepted principles of morality” concerns an assessment of subjective values.” [para 86]

In the present case, both public interest and morality could be at stake.

(i) Contrary to “accepted principles of morality”

Although the signs for which registration is sought by the Oslo Municipality would not be “offending by their nature a reasonable consumer with average sensitivity and tolerance thresholds” [para 91], trade mark registration of artworks that are considered part of a certain nation’s cultural heritage and values might be perceived by the average consumer as offensive, and therefore be contrary to accepted principles of morality [para 92].

(ii) Contrary to “public policy”

According to the EFTA Court, “the notion of “public policy” refers to principles and standards regarded to be of a fundamental concern to the State and the whole of society.” [para 94] As the understanding of ‘public policy’ may vary from country to country and change over time, refusal of registration on this ground can only occur in exceptional circumstances. More specifically,

“An artwork may be refused registration, for example, under the circumstances that its registration is regarded as a genuine and serious threat to certain fundamental values or where the need to safeguard the public domain, itself, is considered a fundamental interest of society.” [para 96]

Having provided a series of examples, the EFTA Court concluded that:

“registration of a sign may only be refused on basis of the public policy exception provided for in Article 3(1)(f) of the Trade Mark Directive if the sign consists exclusively of a work pertaining to the public domain and the registration of this sign constitutes a genuine and sufficiently serious threat to a fundamental interest of society.”

Norwegian Forest Kats
Comment

When discussing absolute grounds for refusal of trade mark registration in the context of overlapping IP rights, it is often recalled that in his Opinion in Philips AG Ruiz-Jarabo Colomer observed that [paragraph 30] a trade mark cannot serve to extend the life of other rights which the legislature has sought to make subject to limited periods.

While this statement specifically referred to patents and designs, in my view one should be careful not to vest it with a peremptory character that it does not really have, especially as far as: (1) copyright and trade mark protection are concerned; and (2) in relation to the absolute ground for refusal within Article 3(1)(f) of the Trade Mark Directive. In this sense, the EFTA Court was correct in stressing the exceptional character of this absolute ground for refusal of registration.

In holding that registration as a trade mark of public domain work is not per se contrary to public policy or accepted principles of morality, the EFTA Court achieved what seems to be a sensible conclusion. This is particular so with regard to the emphasis that the Court placed on the need to consider the status or perception of the artwork at issue in the country where registration is sought. In this sense, “the risk of misappropriation or desecration of a work” may be a relevant consideration in certain, specific instances.

Monday, 3 April 2017

French court rules that resale right royalty must be only paid by sellers

Latest French ruling causes agitation
in the art world
Among the areas of copyright harmonized at the EU level there is the so called 'droit de suite' (also known as 'resale right' or 'artist's resale royalty'), a creature at first typically belonging to droit d'auteur, rather than common law copyright [the UK, for instance, has only had it since 2001], systems.

The EU resale right

By adopting Directive 2001/84 (Resale Right Directive) EU legislature mandated upon Member States to "provide for the benefit of the author of an original work of art, a resale right, to be defined as an inalienable right, which cannot be waived, even in advance, to receive a royalty based on the sale price obtained for any resale of the work, subsequent to the first transfer of the work by the author." [Article 1(1)].

In a nutshell, the resale right, as explained in the preamble to the directive:
  • is meant to enable authors/artists to receive consideration for successive transfers of their work [Recital 1], so to share in the economic success of their original works of art [Recital 3];
  • concerns the physical work, namely the medium in which the protected work is incorporated [Recital 2];
  • forms an integral part of copyright and is an essential prerogative for authors [Recital 4].
This non-assignable and non-waivable right applies to "all acts of resale involving as sellers, buyers or intermediaries art market professionals, such as salesrooms, art galleries and, in general, any dealers in works of art." [Article 1(2)]

The question that arises - and has actually arisen - is who is responsible for paying such royalty.

The Resal Right Directive - in my view and contrary to the reasons for harmonization within Recital 9 - fails to provide a uniform response, in that Article 1(4) therein does not really mandate a harmonized approach at the level of individual Member States. 

While stating that "the royalty shall be payable by the seller", that provision also allows Member States to envisage that "one of the natural or legal persons referred to in paragraph 2 [ie buyers or intermediaries art market professionals, such as salesrooms, art galleries and, in general, any dealers in works of art] other than the seller shall alone be liable or shall share liability with the seller for payment of the royalty."

Who has to pay
the resale royalty
for this artwork?
The CJEU decision in Christie's France

Readers will remember that the Court of Justice of the European Union (CJEU) has been indeed asked to clarify whether the rule laid down by Article 1(4) of Directive 2001/84, which makes the seller responsible for payment of the royalty, must be interpreted peremptorily, ie without any derogation by agreement being possible, as meaning that the seller is required definitively to bear the cost of the royalty.

The French Supreme Court (Cour de Cassation) made this reference for a preliminary ruling in the context of litigation between the Syndicat National des Antiquaires (SNA) and Christie's France [French subsidiary of the multinational firm Christie’s, ie a company that notoriously arranges voluntary sales by public auction] over the change, by the latter, of its terms and conditions to the effect that the buyer, and not the seller, would be liable to pay the royalty. 

The SNA had sued Christie's France, claiming that this change of contractual conditions and the placing of the burden of paying the royalty on the buyer would amount to unfair competition and be contrary to Article L. 122-8 of the French Intellectual Property Code.

The action was dismissed at first instance, but the Paris Court of Appeal sided with SNA. Eventually, the case made its way to the Supreme Court, that referred the case to the CJEU.

As this blog reported, in 2015 the CJEU appeared to endorse in principle Christie's France's move, and held (C-41/14) that:

"Article 1(4) of Directive 2001/84 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." [para 33]

When the case returned from Luxembourg, the Supreme Court ruled in compliance with the CJEU decision and found that the royalty could be paid by the buyer or the seller, or shared by them, as long as the artists’ rights were duly respected. 

Actual Kat-twist
What has happened in France since Christie's France? The Versailles twist

Further to the CJEU and Supreme Court' judgments, I forgot to check was not able to find any details on how things kept developing.

However, a few days ago a number of specialist art magazines [eg, here and herereported on an interesting decision of the Versailles Court of Appeal [does anyone have the text of the judgment?] on 24 March last that likely represents a twist in the longstanding saga of responsibility for payment of the resale royalty.

According to The Art Newspaper, in the context of other proceedings against Christie's, the Versailles court stated that the the royalty must be paid by sellers, with NO exception. 

Apparently this is in line with the decision of French legislature when implementing the Resale Right Directive into French law:

"The lawmakers required the seller to pay the royalty" not only as a simple method of payment, but "in order to safeguard healthy competition between the national operators." 

As anticipated by Antiques Trade Gazette, the Versailles ruling opens the possibility that - lacking definitive clarity on the matter of who has to pay the resale royalty - buyers who paid the royalty could now ask to be refunded and vendors charged instead.

In any case, further developments are likely to occur (and Christie's has announced an appeal to the Supreme Court), so stay tuned!

[Originally published on The IPKat on 3 April 2017]