To protect artists and other gifted people in relation to their intellectual property and creations, as mandated by the Philippine Constitution, and to clarify artists’ rights to proceeds of subsequent transfers or resale, the Intellectual Property Office of the Philippines (“IPOPHL”) issued Memorandum Circular No. 2020-023 on July 20, 2020, covering the Implementing Rules and Regulations on Resale Rights.
The new rules on copyright owners’ resale rights apply to the sale or lease of an author’s original works after the author’s first disposition thereof, regardless of whether the works were created before the rules went into effect. The rules apply to authors who are Filipino citizens as well as other Berne Convention members who have resale rights provisions in their national copyright legislation. The rules do not apply to prints, etchings, engravings, works of applied art, and similar works where profits are derived from reproductions. The rules also do not apply to subsequent sales made directly between private individuals without the involvement of an art market professional, as well as sales made by individuals to public museums.
Authors of original works of painting or sculpture, or writers of manuscripts or composers of music, whether done independently or on commission, are entitled to resale rights that pass to the author’s heirs upon death. The rights of joint authors shall be co-owned in equal shares unless otherwise agreed in writing and signed by or on behalf of the parties. When a name purporting to be that of the author appears on the work at the time it was created, a presumption of authorship is created, subject to contrary proof.
The resale right shall be valid during the author’s lifetime as well as for fifty (50) years after his death. The resale right for jointly authored works shall continue until fifty (50) years after the death of the last surviving author. Except in cases of succession or other legal circumstances, the resale right shall be inalienable, meaning that it cannot be taken away or given away by the author. The resale rights cannot be sold or waived. As a result, any charge, encumbrance, assignment, waiver, or agreement to share or repay the resale right will be null and void.
Even if the first transfer is not for consideration, the subsequent transfer shall be considered a resale if:
- a professional party or intermediary is involved and
- The work is enrolled and registered in the Registry of Qualified Works to be maintained by the IPOPHL’s Bureau of Copyright and Other Related Rights. A lease should be for a period of more than one (1) year and be accompanied by a written agreement.
The resale royalty rate is up to 5% of the gross proceeds of the subsequent sale or lease, calculated in accordance with a percentage rate table based on the work’s gross selling price, as specified in Memorandum Circular No. 2020-023. The resale royalty must be paid to the author or his heirs within sixty (60) days of the work’s sale or lease.
Claims or disputes arising from the application of the rules must be filed with the Office of the Director of the Bureau of Copyright within one (1) year of the cause of action and will be considered filed once the required filing fee has been paid. The Director-General of the IPOPHL shall have appellate jurisdiction upon the filing of an appeal by the aggrieved party within thirty (30) days of receipt of the Director of the Bureau of Copyright’s decision. The Director General’s decision on the matter under appeal shall be final.