CJEU clarifies that EU Member States are free to determine whether the seller or the buyer is liable for paying the resale right royalty

On 26 February 2015, the Court of Justice of the European Union (CJEU) issued its judgment in Case C-41/14 Christie's France, a reference for a preliminary ruling from France, seeking clarification as regards the artist's resale right (droit de suite) within the Resale Right Directive 2001/84/EC.

As stated in the official press release, the CJEU held that the cost of the royalty that has to be paid to the author on any resale of a work of art by an art market professional may be borne, definitively, by the seller or the buyer. It is up to the Member States alone to determine who is liable for paying the droit de suite royalty:

“Although Directive 2001/84 provides that the person by whom the royalty is payable is, in principle, the seller, it none the less allows for a derogation from that rule and thus leaves the Member States at liberty to specify another person from among the professional persons referred to in the Directive who, alone or with the seller, will assume liability for the payment of the royalty. The person who has been designated in that way by national law as the person by whom the royalty is payable may agree 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”.

The CJEU also highlighted that this does not exclude the possibility that a derogation (from the rule that the person by whom the royalty is payable is, in principle, the seller) may, to some extent, have a distorting effect on the functioning of the internal market. However, according to the CJEU, “such an effect is only indirect since it arises as a result of contractual arrangements that are independent of the payment of the royalty to the author, for which the person by whom the royalty is payable remains liable”.