Case C‑518/08, Fundación Gala-Salvador Dalí

This reference for a preliminary ruling concerned the interpretation of Arts 6(1) and 8(2) and (3) of the Resale Rights Directive (Directive 2001/84).

The reference had been made in the course of proceedings brought by the Fundación Gala-Salvador Dalí and Visual Entidad de Gestión de Artistas Plásticos (‘VEGAP’), against the Société des auteurs dans les arts graphiques et plastiques (‘ADAGP’), Mr Bonet Domenech, Mrs Bas Dalí, Mrs Domenech Biosca, Mr Domenech Biosca, and Mrs Ana-María Busquets Bonet and Mrs Mónica Busquets Bonet, who were family members of Salvador Dalí, concerning royalties received on sales of works of art by Salvador Dalí.

Salvador Dalí died on 23 January 1989 at Figueras (Spain), leaving five heirs at law. By will dated 20 September 1982, he had appointed the Spanish State as sole legatee, within the meaning of the French law of succession, of his intellectual property rights. Those rights were administered by the Fundación Gala‑Salvador Dalí, a foundation established under Spanish law, created in 1983 at the initiative and under the control of the painter.

In 1997 the Fundación Gala-Salvador Dalí granted to VEGAP, a society under Spanish law, an exclusive worldwide mandate to manage collectively and exercise copyright over the works of Salvador Dalí. VEGAP had, in addition, a contract with its French counterpart, ADAGP, which was responsible for the management of Salvador Dalí’s copyright in France.

Since 1997, ADAGP had collected amounted in respect of the exploitation of Salvador Dalí’s works, which were transferred by VEGAP to the Fundación Gala‑Salvador Dalí, with the exception of those in respect of the resale right. Pursuant to the provisions of Art. L. 123‑7 of the IPC, which reserved the benefit of the resale right to the heirs alone, to the exclusion of legatees and successors in title, ADAGP paid the amount in respect of the resale right directly to Salvador Dalí’s heirs.

Taking the view that, under Salvador Dalí’s would and Spanish law, the royalties levied upon sales at auction of the artist’s works in France should be paid to it, the Fundación Gala-Salvador Dalí and VEGAP summonsed ADAGP before the Paris Regional Court on December 28, 2005 for payment of those royalties, and ADAGP requested that the painter’s heirs be joined so that the judgment to be given would be applicable to them too. This Court decided to ask the Court of Justice whether Art. 6(1) of Directive 2001/84 must be interpreted as precluding a provision of national law, which reserved the benefit of the resale right to the artist’s heirs at law alone, to the exclusion of testamentary legatees.

The Court fist of all held that in interpreting a provision of Community law it was necessary to consider not only its wording but also the context in which it occurred and the objectives pursued by the legislation of which it was part (see Case 292/82 Merck [1983] ; Case C‑223/98 Adidas [1999]; Case C‑17/03 VEMW and Others [2005]; and Case C‑199/08 Eschig [2009]).

The Court held that the wording of Directive 2001/84 gave no guidance in relation to the concept, referred to in Art. 6(1), of “those entitled” under the author of the work. However, according to the Court, Directive 2001/84 was based on two objectives, namely first, to ensure that authors of graphic and plastic works of art share in the economic success of their original works of art and, second, to put an end to the distortions of competition on the market in art, as the payment of a royalty in certain Member States might lead to displacement of sales of works of art into those Member States where the resale right was not applied.

The Court held that the attainment of that first objective was in no way compromised by the transfer of the resale right to certain categories of persons to the exclusion of others after the death of the artist, as the transfer was ancillary to that objective.

Furthermore, the second objective explained the choice of the legal basis on which Directive 2001/84 was adopted, namely Art. 95 EC. That choice confirmed that the adoption of that directive formed part of the harmonisation of the Member States’ laws, regulations and administrative provisions which concerned the establishment and functioning of the internal market.

The Court held that, therefore, there was no need to eliminate differences between national laws which could not be expected to affect the functioning of the internal market and, in order to leave as much scope for national decision as possible, it was sufficient to limit the harmonisation exercise to those domestic provisions that had the most direct impact on the functioning of the internal market.

 It followed that, in the light of the objectives pursued by Directive 2001/84, it was permissible for Member States to make their own legislative choice in determining the categories of persons capable of benefiting from the resale right after the death of the author of a work of art.

The Court however added that it was for the referring court, for the purposes of applying the national provision transposing Art. 6(1) of Directive 2001/84, to take due account of all the relevant rules for the resolution of conflicts of laws relating to the transfer on succession of the resale right.