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The Indian art market has seen a considerable boom in the recent years. In fact, last year has been regarded as one of the best years for the Indian art auction market. It is interesting to note that the collective turnover for art sales in India for the financial year 2019 was clocked at Indian Rupees 880.90 Crores. Further, if one wasto compare financial year 2020 with financial year 2021, there has been 57.3% jump in the turnover of the Indian art auction market1 . A large portion of such turnover can be attributed to the substantial increase in the resale price of the artwork, which is in part attributable to the growing fame and recognition of the artist with the passage of time, often even posthumously. For instance, the renowned painter Leonardo da Vinci’s artwork made in as early as the sixteenth century was sold for United States Dollars 400 Million in the year 20172 .
The question which then arises is whether the original artist, in legal terms the “author”, is entitled to any share in this substantial escalation in the value of the work. The answer to this question, under the Indian law, can be found under Section 53A of the Indian Copyright Act, 1957 (“Copyright Act”).
Section 53A of the Copyright Act vests such an economic right in the “authors” of original paintings, sculptures, drawings and original manuscripts of a literary, dramatic and musical work. It providesthat the author (or his legal heirs) of a painting, sculpture on drawing, or of the original manuscript of a literary or dramatic work or musical work, where the author was the first owner of rights under Section 17 of the Copyright Act shall, notwithstanding any assignment of copyright in such work, have a right to a share in the resale price of the original copy or manuscript as fixed by the Copyright Board (which power now vests with the concerned High Court, as detailed below). There is however a threshold specified under Section 53A for such resale share right to kick-in, which is that the resale price should exceed ten thousand Indian rupees.
Before dwelling further into this right, it is worthwhile to briefly look into the origin of the said right.
II. Historical Background
The doctrine of resale rights of the artists derives its origin from the concept of droit de suit (“DDS”) which literally means the “right to follow”. The concept of DDS was first implemented in France, when the French artist, Jean-Francois Millet’s painting ‘L’Angélus’ was sold for Francs 1,000. However, by the end of the nineteenth century, it attracted a price of Francs 553,000 at an auction and became the most expensive painting of the time3 . This sale came along in 1889, fourteen years after Millet’s death. By that time, his family lived in extreme poverty and did not receive any benefit from the resale of the painting4 . Consequently, in the year 1920, the resale right of artists for the first time found its mention under French laws through Article L122-8 of the Code of Intellectual Property5 . As per this law, visual artists along with their beneficiaries were entitled to receive a share of the resale price of their respective creation, for a definite period of time. DDS draws a close parallel with the concept of moral right in copyright law6 .
Subsequently, the resale right was adopted by Belgium in 1921 and Czechoslovakia in 1926. The idea of an artist’s resale right appeared in an international legislation in as early as the year 1928, during the Rome Conference. Later, in 1948, this right was formally introduced as an optional obligation under Article 14 bis (today known as Article 14ter)7 of the Berne Convention for Protection of Literary and Artistic Works (“Berne Convention”) during the Brussels Conference. Nonetheless, the implementation of this right still remains optional and for effective implementation of the same, reciprocity between countries is essential. While 185 countries are parties to Berne Convention, not all have implemented the optional obligation of artist’s resale rights.
III. Indian Law
India, being a signatory to the Berne Convention, amended the Copyright Act in 1994 and introduced Section 53A8 which enumerates the concept of resale rights of the artist. Although, this right was incorporated into the Copyright Act vide the 1994 amendments, the rationale behind the incorporation of the resale rights of artists, was elaborated upon in the ‘Notes on Clauses’ appended to the Copyright (Amendment) Bill 19929 , which stated:
“Clause 19.-This clause seeks to insert a new section 53A giving the authors of original copies of paintings, sculpture or drawings or of the original manuscript of literary, dramatic or musical works the right to a share in the subsequent sales of such original copies of original manuscripts, which is the right commonly known as “droit de suite” and which is contemplated optionally for member States by article 14ter of the Berne Convention. Besides promoting the interests of authors within India, this proposed provision would also have the effect of obliging those other member states of the Berne Convention which provide for droit de suite in their own lows to call the similar rights to Indian authors in respect to sales effected in their countries.”
It is therefore evident that under Section 53A, artists (and their legal heirs) enjoy a resale share right in the original copies of the works enlisted therein, however the said right is available only if the artist is the first owner of rights in the concerned work under Section 17 of the Copyright Act. Hence, such a right would not be available where the concerned work was created by the artist during the course of his employment, and the employer is the first owner of copyright in the work under sub-section (a) of Section 17 of the Copyright Act, or where the work was commissioned, and the commissioner of the work is the first owner of copyright the work pursuant to subclause(b) of Section 17 of the Copyright Act.
The peculiarity of this provision stems from the fact that the artists may enjoy the resale right notwithstanding any assignment of copyright in such work. In that sense, the provision is an exception to the concept of exhaustion of rights by providing that despite any assignment of rights, during the subsistence of the copyright in the work, in case the resale price of the original copy of the work exceeds ten thousand rupees, the artist shall have a ‘right to share in the resale price of such original copy’.
Section 53A of the Copyright Act initially vested the power to fix the ‘share’ with the Copyright Board and the decision of the said Board was made final and binding upon the parties. Subsequently, the powers of the said Board were merged with the Intellectual Property Appellate Board (“IPAB”) and recently, pursuant to the Tribunals Reforms (Rationalisation and Conditions of Service) Ordinance, 2021 and with the abolition of IPAB, the power to fix the share now vests with the Commercial Courts formed pursuant to the Commercial Courts Act, 2015. The provision empowers the authority to fix different shares of royalty for resale on different classes of work but provides an upper limit of 10% of the resale price.
It is interesting to note that in Australia, under the Resale Royalty Right for Visual Artists Act 2009 the rate of royalty in case of resale of art is calculated as 5% of the resale price, with such right being available where the resale price is more than Australian Dollars 100010. Such royalty may be payable via an official collecting agency or if the creator chooses it can be paid directly to him. Similarly, the Intellectual Property Code of Philippines gives the author a 5% share in the gross proceeds of sale or lease of the original painting, sculpture, or manuscript, after its first disposition by the creator. Further, in France the share varies from 0.25% to 4% depending upon the gross proceeds of sale done by any vendor or agent, which is subject to cap of Euros 12,500 11 . Therefore, different jurisdictions vary considerably in fixing the maximum share of resale royalty payable to the author.
To the author’s knowledge, neither the Copyright Board, the IPAB or the Commercial Courts have yet been called upon to fix the resale share in India. It is therefore yet to be seen as to what amount of resale share would the artists be entitled to and whether there would be any differentiation created in such resale share basis the nature of underlying work, in India.
The concept of DDS has been in prevalence for hundred years now. As can be observed from the above discussion, the major reason for introduction of DDS was to improve the economic status of visual artists. However, Indian law, despite having a provision for resale rights in place for more than twenty years, lacks in its effective execution and implementation. Basis the research undertaken by the authors of this article, we have not come across a single case in India where an artist has exercised such a right and/or wherein this right has been adjudicated upon by the concerned authority. The awareness regarding the existence of this right remains dismal amongst artists. Further, information in relation to all resales of such works is not in public domain and to that extent the artists have limited visibility on resales – contractual and other protections being built-in at the time of the first sale may go a long way in addressing this issue. Further, the setting up on an organisation / society, as is the case in case of other rights under the Copyright Act, may also assist in the actual implementation of resale rights of artists. It is high time that this statutory right, which so far exists only on paper, is duly implemented in real world!
The content of this document does not necessarily reflect the views / position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at [email protected].
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