Resale Rights Enforcement

The content here is for information only. Please seek guidance from an Intellectual Property lawyer in case of such disputes.

Definition

Resale rights (Copyright Amendment of 1994, Section 53A) (aka 'droit de suit'- french for 'the right to follow') gives a right to artists to recieve a share in the resale price of their works, when the original work is resold for more than ₹10,000.

In the absence of a contract,

• The resale royalty is capped at 10% of the resale price, and the exact percentage of the royalty may be decided by Commercial Courts or mutual agreement. Disputes as to who receives the royalty may be addressed by way of ADR (negotiation, mediation, conciliation or arbitration), or litigation as a last resort.
• Once the artist is no longer living, heirs/ family/ entities can receive the royalty for upto 60 years.
• Resale rights are also inalienable, meaning they cannot be waived or assigned away by the artist.

It is common and expected to think that once a work of art is sold by the artist, it is no longer in the control of them (First Sale Doctrine). However, this right is independent of so. Even if the artist physically 'lets go' of the work, they retain the entitlement when it changes hands in the afterlife of the work. 

This provision exists to ensure that artists and heirs benefit from the increasing value of their works in the secondary art market. Artists typically first sell their works for a lower price, therefore this provision exists to ensure continued benefits. This provision was also introduced to line India with the Berne Convention for the Protection of Literary and Artistic Works of 1886, which India joined in 1928.

Low Awareness

Iconic artist Tyeb Mehta’s 'Kali' achieved a record-breaking ₹26.4 Cr. at Saffronart’s 200th auction in June 2018. Mehta's heirs ought to have received a maximum of ₹2.64 Cr., yet, no resale royalty reached his heirs. Inadequate awareness and enforcement failures meant that the full amount was retained by the buyer, entirely excluding the family.

The law places the responsibility of royalty delivery on the resale buyer, but artists are advised to stay up to date to avoid being taken advantage of in case the buyer omits such information from the artist, or if the buyer themself is not aware of such a mandate (which is probably the case).

There are multiple reasons why resale rights are unheard of:

• The IPAB dissolved in 2021 and it was historically known for being non-functional and suffered from inadequate staffing and infrastructure
• Zero compliance urgency due to no strict judicial precedent
• Absence of a central registry, authentication, or valuation system, hampering the tracking of secondary sales and royalty disbursement. Moreover, anonymous buyers make it more difficult to track sales.
• Individuals embed royalty clauses in contracts, avoiding systemic reliance.

Enforcement

How an artist can determine the exact percentage of their resale royalty, and how they can enforce their resale rights, are extremely crucial to understand. The fact that it might be difficult to get hold of the buyer is another issue as well. It is good to have a resale clause in agreements and contracts with the agreed upon royalty percentage (upto 10% of the resale value). 

Determining Royalty 

    Confirm

• You are the author and first owner
• The artwork in question is original- not a print, not a reproduction
• The resale price exceeds ₹10,000

    Estimate Percentage

• Discuss and agree upon a resale percentage with the buyer or the intermediary, in the scenario that you have contact details.
• Otherwise, you will need to visit the Commercial Courts to determine the resale royalty, which are located at the District and High Courts. Ensure the Court you visit is in your jurisdiction. It is natural to think of such procedures and visits as intimidating; therefore it is advised to hire an Intellectual Property lawyer for this task.

Enforcing

    Obtain Contact Details

In case of anonymous buyers- while artists are not granted a direct right to know the buyer, they may be granted this right in order to enforce their resale right. Therefore, artists hold such a right indirectly. If your artwork was sold via a platform (like a gallery or an auction house), contact the platform and enquire about the buyer. If the platform refuses to provide information, take this opportunity to educate them about your rights.

    Communication or Legal Notice

If you have the details of the buyer, an email is a good start. You will be sending an email to the buyer of the resale and not the initial sale. Calling is optional, however emails are safe as they provide necessary records of the communication.

Alternatively, if the buyer refuses to deliver the resale royalty, call for ADR (mediation in this case) or as a last resort, send a legal notice under Section 53A to the buyer via an intellectual property lawyer.

Litigation takes at least one year from initiation to the final decree, therefore taking guidance from an experienced lawyer is important. The Limitation Act of 1963 (Article 137 and Schedule) stipulates that once a cause of action arises, claimants have three years to file a case.

It is important to keep royalty clauses in each and every sale agreement, and for the artist to be as in touch with their buyers as possible.

Preventative Measures

To prevent disputes,

1. Incorporate a resale royalty clause in sale/ commission agreements starting with something like, "upon the resale of the Work above ₹10,000, the Artist shall receive a resale royalty of ( )%."
2. Contractually require the seller or platform to disclose buyer information upon resale, as having an explicit obligation makes enforcement feasible.
3. Build an ADR clause, giving parties a clear pathway to resolve issues efficiently. Please confirm the intricacies of intellectual property ADR with a qualified intellectual property lawyer.

Importance of Precedent

There is no precedent for an artist's resale right as of yet, so if an artist does go to Court to enforce such rights, it will virtually be the first time a Court decides a case of this nature.

Click here to learn about the timeline of artist's resale rights.

Click here for the WIPO Toolkit of Artist's Resale Rights.

Conclusion

Section 53A provides a clear statutory framework for resale rights, but its practical impact remains largely dormant due to low awareness, structural inefficiencies, and the absence of precedent. Until robust enforcement mechanisms become the norm, artists will need to proactively secure and assert their resale rights. The first successful judicial enforcement of this right will not only benefit the claimant, but set a transformative precedent for the Indian art market.