In order to protect artists and other gifted people in relation to their intellectual property and creations as mandated by the Philippine Constitution and in order to clarify the rights of artists to proceeds of subsequent transfers or resale, the Intellectual Property Office of the Philippines (“IPOPHL”) issued on July 2020 Memorandum Circular No. 2020-023 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, subsequent to the first disposition thereof by the author, notwithstanding that the works may have been made before the effectivity of the rules. The rules cover authors who are citizens of the Philippines as well as other member states of the Berne Convention having resale rights provisions in their national copyright legislation. The rules are not applicable to prints, etchings, engravings and works of applied art and similar kind wherein gains are derived from proceeds of reproductions. The rules are also not applicable to subsequent sales made directly between private individuals with no participation of an art market professional, nor to sales made by individuals to public museums.

Authors of original works of painting or sculpture or writers of manuscript or composers of music, whether done independently or pursuant to a commission, shall be entitled to resale rights which are transmissible to the heirs upon the author’s death. For joint authors, the rights shall be co-owned in equal shares, or as may be agreed upon in writing and signed by or on behalf of the parties. A presumption of authorship is created when a name purporting to be that of the author appears on the work at the time it was created, subject to contrary proof.

The resale right shall subsist during the author’s lifetime plus fifty (50) years after his death. For jointly authored works, the resale right shall subsist until after fifty (50) years from death of the last surviving author. The resale right shall be inalienable such that it cannot be taken away from nor given away by the author, except in cases of succession or other legal circumstances. Neither can the resale rights be sold or waived. Hence, any charge, encumbrance, assignment, waiver, nor any agreement to share or repay the resale right shall be void.

Even if the first transfer is not made for a consideration, the subsequent transfer shall be regarded as a resale provided (i) it involves a professional party or intermediary and (ii) 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. For lease, the same should be for a period of more than one (1) year and covered by a written agreement.  

The resale royalty rate is up to Five Percent (5%) of the gross proceeds of the subsequent sale or lease, computed in accordance with a percentage rate table based on the gross selling price for the work, as provided in Memorandum Circular No. 2020-023. The resale royalty shall be paid to the author or his heirs within sixty (60) days from the date of the sale or lease of the work.

Claims or disputes arising from the application of the rules shall be filed with the Office of the Director of the Bureau of Copyright within one (1) year from the cause of action and shall be considered as filed upon payment of the required filing fee. The Director General of the IPOPHL shall have appellate jurisdiction upon filing by the aggrieved party of an appeal within thirty (30) days from receipt of the decision of the Director of the Bureau of Copyright. The decision of the Director General on the matter appealed to it shall be final.