Tuesday, November 21, 2006


The concept of the territoriality of copyright plays out in a number of complex, interesting ways. By territoriality, people usually mean a legal connection of a copyright interest to one territory, i.e., country. That country's laws will then govern a particular (or all) legal issues involving the copyright.

Professor Willem Grosheide has written effusively that “the intellectual property law community over the whole range has cherished for many decades and still favours the territoriality” principle. The term “territoriality” though, is susceptible of different meanings. For purposes of the first sale doctrine (or “exhaustion” as it is called in other countries), copyright is quite “territorial” since an authorized sale or other distribution of a copy ends the copyright owner’s control in that territory (but not others) over further distribution or public display of that copy. Territoriality is also used as a device to determine certain points of attachment for national eligibility status of foreign works, i.e., one determines whether foreign works are eligible for protection in a different forum by reference to the work’s territorial paternity, such as the country of first publication.

If by territorial one means the copyright right is created by each sovereign, this is true of most, if not all, other laws, so to say copyright is territorial does not distinguish copyright from other laws that are subject to choice of law. Even assuming copyright is territorial (in any agreed meaning of that term), this characteristic is not determinative nor even helpful to the choice of law analysis: choice of law exists territorially too; that is, whether to apply choice of law is determined by the national (territorial) law of the forum. The territorial characterization, taken to its logical conclusion, eliminates entirely choice of law in favor of exclusive application of the law of the forum, and under circumstances where there is nothing inherent in forum law justifying the exclusion of foreign law. Indeed, one can argue that dogged insistence on applying the law of the forum deprives the forum of the exercise of its own sovereignty to utilize choice of law procedures, a result obviously at odds with the very nature of sovereignty.

Another area in which the concept of territoriality is tested is droit de suite, the resale royalty right mandated within the European Union by Directive 2001/84, and to date implemented in few countries within the Community, despite a January 1, 2006 deadline. In a fascinating article by Pierre Valentin, Droit de Suite, 28 E.I.P.R. 268 (2006), the nature of territoriality is explored in efforts to assign a country of origin to the sale that triggers the resale royalty obligation. Assigning such a country is important for at least two reasons: first, the sale may have occurred outside the Community, thereby resulting in no obligation; or, two, the resale could have occurred in one or more countries within the Community but which have different coverage or royalty rates. One approach to assigning a territorial location for the obligation is the place of sale test, according to which the resale royalty obligation is assigned to the country where the sale takes place. This approach, however, requires further agreement about where a sale can be said to take place. Outside of cases where the seller, buyer, and the work of art are all in the same country, there are many permutations: the seller is in Country A, the buyer in Country B. The parties communicate by telephone, fax, or email and agreement is reached. Is the place of sale the place where the seller is located or where the buyer is located? What if the work or art is in one of the two countries, or, in a third country, C? Under English choice of law rules, the country assigned is the generally the country where the art work is located, but this gives an unusual emphasis to a material object that may be owned by even a different person , say, someone who purchased the work of art from the artist, and who lives in country D. In the case of Joseph Beuys, BGH Judgment of June 16, 1991; I ZR 24/92 [1994] GRUR 798, comment [1995] E.I.P.R. D-94, a German court held that the place of sale governed (London), resulting in no royalty obligation. Since as M. Valentin notes, the droit de suite, like all copyright rights, are governed by domestic laws, these issues will not be resolved for a long time if ever.


Crosbie Fitch said...

Droit de suite is a delusion engendered by the similarly deluded perception that copyright is about enforcing proprietary rights.

Or put another way, if an artist deserves control over copies and derivatives of their work in order to demand a commission, then they must obviously have a right to demand commission on resale of their original works.

The laughable thing is, this commission has been made inalienable. An artist is consequently denied their right to exchange their labour in a free market - they are prevented from realising a potentially more lucrative sale if they could waive their droit de suite.

Of course works of art sometimes appreciate in value considerably, but why presume this appreciation is due to the artistry of the artist and not the Pyrhhic reward of success in competition between would be owners?

There's nothing to stop the artist leasing their work and achieving an effective droit de suite all by themselves - if they suspect the true quality of the work won't be appreciated until a large enough audience have inspected its craftsmanship.

If the government is so intent on interfering to prevent the artist being exploited, why not simply create a grant of patronage (subsistence costs or better) to all artists whose works enjoy a value above a certain amount?

Some of these 'droits' demonstrate even the French are confused between inalienable rights and commercial privileges.

William Patry said...

Crosbie, there is the little problem of no privity of contract between the artist and subsequent resellers

Anonymous said...

Hello William and Crosbie,

I also agree that there are inherent issues within the droit de suite that have been troublesome for decades.

You might find a paper I wrote in 2005 to be supportive of your arguments:

(please excuse the quality, it was my LLB dissertation - but still interesting nonetheless)


Anonymous said...


Sorry here is the proper link if it is of interest


Crosbie Fitch said...

If I lease a tangible work to you, the contract may prohibit resale, or require commission on transfer of the lease, or the lease may be of such a short term, that it is of little consequence that no commission is charged, i.e. revenue may be obtained through extension of the lease or its expiry.

I may seek damages from the current leaseholder, or retain a held deposit.

Most of this is moot anyway, because of the bargaining power of galleries and buyers - and why handwringing do-gooders felt obliged to institute the droit de suite.

That's why I suggested an 'arts council' grant would be better than denying the artist their liberty to surrender their commission - if the government truly felt they represented the public's best interest in rewarding artists fortunate enough to have their art tulipped into the echelon's of plutocratic aesthetes.

Crosbie Fitch said...

Thanks Tanya,

A most apposite and informative exposition of the issues.

Anonymous said...

William - I've had an issue about this come up on my blog regarding video rental business and how to deal with copyrights for DVDs that may not be available in the U.S. I'd greatly appreciate it if you could take a look and comment:

Reader Mail: Starting a Video Rental Business

William Patry said...

Scot, the MPLC link doesn't work. I will try and find another one