Let's try to clarify

June 28, 2022
27

Siae: resale right and reproduction right

by Leonardo Dell'Innocenti, Rossella Bruno
Dear Lawyer,
I would like to know whether an art gallery is obliged to pay the Italian Society of Authors and Publishers (Siae) when it publishes a work that has been lawfully purchased and for which the payment for resale rights has already been honoured in a printed magazine, for advertising purposes. I would also like to ask whether this fee is also due in the case of online publication on the gallery’s website.

Thank you.

A.S. Rome

First of all, it is appropriate to make some clarifications regarding resale rights and the related payments due to Siae. The resale right, although introduced by Law 633/1941, found effective application within Italian legislation with Legislative Decree No. 118 of February 13, 2006. Siae is entrusted under a government monopoly with the task of collecting the remuneration for this right for all artists, even if they are not associated with it. This right allows visual artists and their heirs to receive royalties for their works even after selling them so that they can benefit from any increase in their value for up to 70 years from the artist’s death. The condition is that in order to apply the resale right, the sales, subsequent to the first sale made directly by the artist, involve the intervention of a professional in the art market - gallery, auction house or art dealer - as seller, buyer or intermediary and are concluded at the sale price of not less than €3,000.00. The only exception is the stock exemption: the resale right does not apply when the work was purchased directly from the artist by the professional within the last three years and the price of the work is between €3,000.00 and €10,000.00 not including Vat. In addition, Siae provides a vademecum which clarifies a multiplicity of aspects on the proper functioning of the relations between the parties involved in transactions related to the resale right: in particular, it specifies the obligation of the art market professional to take and withhold from the sale price the fee as well as the obligation to pay the relevant amount to Siae within ninety days of the sale. Therefore, art galleries, in accordance with the procedures set forth above, are obligated to pay a fee to Siae. While the guidelines with regards to resale rights are well defined, the same cannot be said about the reproduction of the works of the artists who are represented by galleries. It should be pointed out that Article 13 of Law 633/1941 on copyright specifies that the purchaser or possessor of a work of art does not automatically acquire the right to reproduce or copy it, but it is appropriate that this be agreed upon with the artist or the seller if the latter is deceased, I am referring to the artist’s heirs and estate. With the purchase, only the right of ownership is transferred. My advice is to include, within the contract of purchase and sale, a clause expressly providing for the transfer of the right to reproduce the work; since, in case of non- transfer, the artist could request permission for these rights through Siae after the sale. Regarding publication in a printed art magazine, given the lack of a regulation as well as a specific vademecum regarding resale rights, we must proceed with some important considerations. First and foremost, the gallery that decides to reproduce a work of art in a printed magazine will necessarily have to deal with resale rights: art. 65 of Law 633/1941 paragraph 2 states that “the reproduction or communication to the public of protected works or materials used in connection with events is permitted for the purposes of exercising the right of resale and within the limits of informational purposes, provided that the source, including the artist’s name if reported, is indicated, unless this is not possible.” In conclusion, the gallery owner is not subject to the payment of royalties when publishing works of art in a printed magazine in conjunction with an exhibition, an ongoing event as this is considered a review or publication for information purposes. With regards to the publication of a work for advertising purposes by the art gallery itself, one has to consider the size of the reproduction (Cassation- Ordinance 4038/2022) as well as the right to the economic exploitation of the work, which, in fact, should already be included in the resale right, for which the compensation due to Siae is extensively regulated. These aspects are the subject of current confrontation between the National Association of Modern and Contemporary Art Galleries and Siae given that only recently many gallery owners, without any prior notice, are being asked to pay royalties for images of published works, even online where it is much more difficult to argue the absence of profit-making purposes in the use of the works within an online gallery. This situation is increasingly common in the post-Covid era and further legal investigation is necessary.

You can address your questions to: redazione@awartmag.com

The Author

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