06 Oct
Intellectual Property

An Artist’s Right

[Spoliarium by Juan Luna]1

The Philippine art scene has always been strong in the country- producing renowned artists from the time of Juan Luna and until this day where the likes of BenCab have gained global popularity. Emerging contemporary artists and even well-established ones have grown their own following through the fast growth of social media. Nowadays, collectors and art enthusiasts have unlimited access to art at their fingertips. Likewise, there are almost a hundred galleries around the country, with multiple major art fairs happening throughout the year. In fact, several galleries did not see a decline in sales during the pandemic, while some even recorded the same income.2 Likewise, those in the music and film industries have continued to create and release their works as access to distribution widened through various online platforms. Pitches to producers abroad have been accessible through emails and Zoom calls– truly, now is such an inclusive time to be in the art scene!

While creating art is truly liberating and, for many, hugely profitable,- there are several decades-old laws that may be unfamiliar to artists. After all, creating the art and being on top of its business side are two different tasks that could feel unnatural to artists. One may find deep satisfaction coming up with pieces that the world could see and appreciate but what some artists may not know is that their financial rights over their work does not end on their art’s first paycheck.

“What?! I can still make money eventually even after my music has been paid for by the broadcast network?” An artist would be surprised to know that the answer is yes!

Fortunately, the Philippines has laws crafted specifically for the protection of artists and their works. One of the rights available to artists is droit de suite, this article is here to help you know more about this specific right.

UNDERSTANDING DROITE DE SUITE

Droit de suite is the French term for “resale right”, or the right of artists or their heirs to receive a share from the resale value of their work in case of a subsequent sale or lease 3.  It is not uncommon for the value of an artist’s work to increase over time and for that work to be sold again or leased, and as trade increases for each artwork, the artist shall remain compensated throughout time. This means that as the art value goes up, the artist may continue to reap benefits from his work.

In the Philippines, the resale right is embodied in Section 200 of the Intellectual Property Code. It is there to ensure that artists or their heirs benefit from the sale or lease of their works even after the first disposition by receiving a share, or what we call a “resale royalty”. An artist’s resale rights exist during his/her lifetime. And guess what, this extends for another 50 years after his/her death. If the work is made by two or more artists, the resale right belongs to all of them as co-owners and protects them from the moment of creation and for another 50 years after the death of the last surviving artist4. The law seeks to take care of the artist and his next generation when you think about it.

WORK AND ARTISTS COVERED

Huntington Jeff [Great Rizal Collage], [Photograph]5

The resale right covers Filipinos and citizens of other countries who are members of the Berne Convention, which have resale rights incorporated in their national copyright laws. The works protected include original works of painting, sculpture, and manuscript 6.

On the other hand, printings, etchings, engravings, works of applied art, and works of a similar kind wherein artists earn from the proceeds of reproductions are not covered7. Reproduction of original works are not covered- this means postcards or shirts using original paintings will not be paying a share to the artists.

If a private individual subsequently sells or leases the work directly to another private individual without the assistance of an art market professional, the resale right also does not apply. This means that if a sale happens privately between individuals (no transfer of certificates or no receipts issued), then it will not be paying a share to the artists.

A direct subsequent sale or lease by a private individual to a public museum is also not covered.

An art market professional, sometimes called a “professional party” or an “intermediary”, is an individual or an entity engaged in the business of dealing with artworks. It may refer to places where buying and selling of art happens such as auction houses, art galleries, art salerooms, or any art dealer in general. A public museum, on the other hand, is an institution with a permanent collection of artworks, existing for the purposes of taking care of the permanent collection and educating the public about it. Museums do not sell art.

resale royalty rates

The following rates determine the amount that will go to the artist or his/her heirs as their resale royalty in case of a subsequent sale or lease 8:

Gross Selling Price (PhP)Percentage Amount
Up to 150,000.005%
150,000.01 – 350,000.004%
350,000.01 – 600,000.003%
600,000.01 – 1,000,000.002%
1,000,000.01 – 2,000,000.001.5%
2,000,000.01 – above1%

If the work is sold in a different currency, the price shall be converted into Philippine Peso based on the Bangko Sentral ng Pilipinas reference rate prevailing on the contract date.

FIRST DISPOSITION AND SALE

When an artist transfers ownership of his/her work for the first time, it may or may not be for a fee. It can either be a transfer from the artist to the person who commissioned the work, or to his/her heirs by way of succession. It can also be the disposal of the work for purposes of administering the artist’s estate, or for the realization of his/her estate in case of bankruptcy (let us hope this never has to happen!). All these scenarios are considered “first disposition” or “first transfer of ownership”.

Sorilla, Franz IV, (2016 July 05) [“Filipinos in Gilded Age, ”Leon Gallery Highlights 19th Century Filipino Art Masterpieces] {Photograph]9

A sale or lease after the first disposition is called “resale”. This is when the law on resale right comes in handy. To ensure that artists get to enjoy their resale right, certain safeguards were implemented and need to be followed when making a subsequent sale or lease. They are the following:

  1. The subsequent sale or lease must involve an art market professional;
  2. In case of lease, the same must be for a period of more than one (1) year and with a written contract; and
  3. The work must be enrolled and registered in the Registry of Qualified Works.

HOW RESALE RIGHTS ARE MANAGED

Management of the resale right includes the monitoring and collection of the resale royalty. There are two ways to do this – collective management or individual management. Collective management means that there is a collective management organization which will do the monitoring and collection on behalf of the artist, in exchange for a fixed fee or a percentage of the resale royalty. An artist can also do all of this him/herself through individual management.

the local art scene

Riccardo (2015 November 16) [Exhibit Painting Display], [Photograph]10

Art galleries often hold art exhibits to feature the works of various local and international artists. Their relationship with the artists is of a give and take nature – the art galleries become an avenue for artists to display their works, market and eventually sell them, the artists then create the works that shall be displayed, help promote their show by way of inviting their followers and network.

Once a work is launched through an exhibit, the gallery and artist agree on a price. Over time, the value of the work may increase as the artist establishes his/her practice in the world of arts. The work, whether in the hands of a collector or still in the gallery, may continually rise as the artist rises in value too. The first sale usually takes place in art galleries, during art fairs, or through the own efforts of the artist. Nowadays, many artists are on social media and they are able to reach out to art enthusiasts and collectors who notice them and might want to acquire their work. For most artists, as a courteous practice, the sale happens through the gallery that represents the artists. This also protects an artist’s long-term relationship with galleries.

The subsequent sale or lease of the work is where it gets tricky. Some works are resold at auction houses and art galleries, but some are sold through private transactions. At this point, it is important for an artist to know his/her resale rights. As mentioned above, an artist has the right to a percentage of the revenue of the resale except for transactions that were mentioned above that are excluded from the law.

Truly, being able to witness an artist’s perspective through layers of color, texture, shapes and curves, hearing the subtle and loud messages of his/her works, is something special. It is not a surprise why people love collecting art, or for some, understanding the growing value in investing in art. But while we bask in the beauty or art, it will not hurt to keep in mind the rights of artists and invoke them if need be. After all, so much heart and tears have gone into creating each piece, artists deserve to receive what is rightfully theirs.

Besides the appreciation for beauty, there is a lot of commercial value in the production, selling and trading of artworks. If you are in this industry already or if you plan to start now, it will be to your advantage to be informed and protected by having the proper legal counsel and legal framework in place. Many of the stories of artists being taken advantage of happen because of lack of preparation in the business and legal aspects, we can help you maximize and protect you and the commercial benefits of your work for you and your next generation.

FOOTNOTES

  1. [Spoliarium by Juan Luna], [Photograph] https://commons.wikimedia.org/wiki/File:Spoliarium_by_Juan_Luna_High_Res.jpg
  2. Potenciano, Toni, (21 March 2021) [People Are Still Selling and Buying Art- even through Viber], [Article] https://www.cnnphilippines.com/life/culture/arts/2021/5/21/buying-art-through-viber.html
  3. (6 June 1997) [Id. Sec. 2(m), Rule I. of Republic Act no. 8293 An Act Prescribing the Intellectual Property Code and Establishing the Intellectual Property Office, Providing for Its Power and Functions and for Other Functions], [Law]  https://www.officialgazette.gov.ph/1997/06/06/republic-act-no-8293/
  4. (3 July 2020) [Implementing Rules and Regulations on Resale Rights, IPOPHL Memorandum Circular No. 2020-023, Sec. 2(l), Rule I.], [Memorandum] https://drive.google.com/file/d/17evcmv4mIz5zyTOJcdkJUxi4EUd8s_Zm/view
  5. Huntington Jeff [Great Rizal Collage], [Photograph] https://www.coursehero.com/file/81246743/Great-Rizal-Collage-Art-by-Jeff-Huntingtonjpg/
  6. (6 June 1997) [Id. Sec. 5, Rule I. of Republic Act no. 8293 An Act Prescribing the Intellectual Property Code and Establishing the Intellectual Property Office, Providing for Its Power and Functions and for Other Functions], [Law]  https://www.officialgazette.gov.ph/1997/06/06/republic-act-no-8293/
  7. (6 June 1997) [ Id. Sec. 4, Rule I. Republic Act no. 8293 An Act Prescribing the Intellectual Property Code and Establishing the Intellectual Property Office, Providing for Its Power and Functions and for Other Functions], [Law]  https://www.officialgazette.gov.ph/1997/06/06/republic-act-no-8293/
  8. (6 June 1997) [ Id. Sec. 14.1, Rule III. Republic Act no. 8293 An Act Prescribing the Intellectual Property Code and Establishing the Intellectual Property Office, Providing for Its Power and Functions and for Other Functions], [Law]  https://www.officialgazette.gov.ph/1997/06/06/republic-act-no-8293/
  9. Sorilla, Franz IV, (2016 July 05) [“Filipinos in Gilded Age, ”Leon Gallery Highlights 19th Century Filipino Art Masterpieces] {Photograph] https://www.tatlerasia.com/culture/arts/leon-gallery-highlights-19th-century-filipino-art-masterpieces?gallery=true&slide=0&type=carousel
  10. Riccardo (2015 November 16) [Exhibit Painting Display], [Photograph] https://www.pexels.com/photo/exhibit-painting-display-69903/
What's new: A new law for filipino creatives
26 Sep
Intellectual Property, News

What’s New? A New Law for Filipino Creatives

Art Fair Philippines, (2020), [Collage of Visayan Artworks], [Photograph]1

Hollywood just featured the first film starring a Fil-Am cast in “Easter Sunday.” Years ago, the sensational song “Let It Go” was composed by a FilAm talent. Filipinos are working for Disney animation, Rachelle Ann Go is a successful theater actress in London, and Lea Salonga is one well-known Broadway actress for decades now. Clearly, the Filipinos do not lack creative talent. 

Assistant Secretary Glenn Peñaranda of DTI said “there are approximately 2 to 3 million creative freelancers working locally, while 1.5 million creatives handle international projects” 2. As early as 2009, the Creative Industries contributed 5.44% of the country’s GDP3 and has seen an increase as of present time. In 2019, the creative industry had a projected value of P1.27 trillion and accounts for 7% of the GDP (Gross Domestic Product) of the country.4

With the rise of the “gig economy”, where one does not have to be fully employed to work for any company, Filipinos have been able to secure multiple projects at a time which includes jobs for both domestic and international clients through digital means. Payment gateways Paypal, Payoneer, and Upwork estimate 1.12 to 1.5 million Filipinos are receiving salaries through creative gigs.5 Imagine the number of Filipinos that are highly productive already in this industry! It is also worth noting that due to the pandemic, a portion of the labor force lost their jobs and moved to contractual jobs that are home-based. While there is no official data yet regarding this, you can just observe your circles of family and friends and can attest that indeed, the creative industries have opened so many opportunities for profitable work.

We see that the country does not run low on talents, while the private sector, both locally and abroad, continues to need the creative work that Filipinos provide. Now, the government has taken notice and has taken the next step by legalizing provisions focused on growing the industry. The creative future looks bright as the Joint Foreign Chambers in the Philippines (JFC) affirms that “[w]ith the enactment of RA 11904, the Philippines is well-placed to reach its goal of becoming the leading creative economy in Southeast Asia by 2030.” 6

Number One Creative Economy in Southeast Asia in 8 years, are we ready?

Fortunately, Congress has begun to boost the Philippines to catch up with the fourth industrial revolution – as inevitably, the future is creative. The Philippine Creatives Industries Development Bill was authored and sponsored in July 2021 by a creative, Congressman Toff De Venecia. After a year of diligent work with various industry stakeholders, it became law on July 28, 2022, as Republic Act 11904 or the Philippine Creative Industries Development Act (PCIDA).

Rep. Christopher V.P. De Venecia on House of Representatives of the Philippines, Author and Sponsor of the Bill in Congress7

As the roll-out begins, we can expect more activity, visibility, and impact in the next months and years to come. We are hopeful that the present administration allocates sufficient budget so that the interesting and beneficial provisions of this law may serve the Filipino creatives. 

Dr. Bernardo M. Villegas, an expert in Economics, states that the implementation strategy should include working with the private sector and the academe. To grow the creative economy from  6.52% of GDP to 15% by 2030, a focus on exporting creative talents should be prioritized- this means that the academe must create programs centered on honing creative expertise among students, the local government and tourism offices shall create creative zones and cities where encouraging local businesses to invest in creative enterprises, events and festivals shall be an area of focus as well. [e]

There is no doubt that the Filipinos are talented. Private businesses are continually opening and expanding businesses that provide creative services. What we look forward to most now, especially with the passing of PCIDA, is an aggressive boost from the government’s efforts. Let us discuss this new law.

Is this law for you?

Creative industries are defined in the law as trades involving persons that produce cultural, artistic, and innovative goods and services originating in human creativity, skill, and talent and having a potential to create wealth and livelihood through the general and utilization of intellectual property.

Let us establish the various categories that belong in the creative industries:

  • Audiovisual Media Domain
  • Digital Interactive Media Domain
  • Creative Services Domain
  • Design Domain
  • Publishing and Printed Media Domain
  • Performing Arts Domain
  • Visual Arts Domain
  • Traditional Cultural Expressions Domain
  • Cultural Sites Domain
  • Other domains and industries that may be determined by the Philippine Creative 
  • Industries Council (Council)

What Should I Expect From It?

This new law mandates the national government to promote the developments and the rights afforded to the Philippines’ creative industry and Filipino creatives. Primarily, this law will execute the creation of a Philippine Creative Industries Development Council (PCIDC), an attachment agency to the Department of Trade and Industry (DTI).

How important is it for you to get acquainted with the PCIDC? Very! In fact, we suggest following them the moment PCIDC activates its online pages,  so you can track the different programs of this agency. Keep in mind that their mandate is to protect and nurture the excellence of the movers of the Philippine industry. As a vital contributor to the economy, it would be right for creatives to take advantage of the programs that will be funded and executed through the Council.

Who or What is PCIDC?

The Council is created to take charge of the promotion, development, and expansion of opportunities for the creative industries in the country. It has been given authority and is in charge of planning and policy formulation, issuance of guidelines in relation to private sector participation, and assistance in monitoring and protection of intellectual property rights and indigenous cultural properties being utilized for commercial purposes, among others.

The law further protects creative industries by establishing a Creative Workers’ Welfare Committee, which shall be responsible for ensuring that creative freelancers and workers have access to sustainable and dignified work in the creative industries.

Here is a run-through of all other rights provided under this law:

Infrastructure Support. Shared service facilities, infrastructure support programs to be provided under DTI and the Philippine Innovation Act. This will include provisions for subsidized rental schemes for studios and venues. Co-working spaces and other similar facilities and hardware that may be accessed by the creatives. The government shall give preference for Micro, Small, and Medium Enterprises (MSMEs) in fulfilling these.Research and Development (R&D) and Innovation Support. Entities may avail of the research and development support program of the Department of Science and Technology (DOST) that includes financial support for research projects related to the creative industries. 
Digitalization of the Creative Industries. This will include access to digital services and training platforms. Technical and financial assistance programs for digital content distributors, provision of high-speed infrastructure and bandwidth through the Department of Information and Communications Technology (DICT) and the National Telecommunications Commission (NTC). Access to Credit and Financial Statements. Government-owned, -controlled, or -supported financial institutions are mandated to give priority to creative industries in providing credit assistance and guarantee schemes.
Other Fiscal Incentives. Entities whose activities are listed in the Creative Industries Investment Priority Plan (CIIPP) may avail of fiscal incentives provided under the Corporate Recovery and Tax Incentives for Enterprises Act.Creative Voucher System. Creative voucher system shall be created in order for institutions to have a more systematic means of giving aid and support to creative industries entities. Again, MSMEs are to be given preference as suppliers.
Creative Instruction and Education. The Department of Education (DepEd), Commission on Higher Education (CHED), and Technical Education and Skills Development Authority (TESDA) are mandated to establish a Creative Educational Plan and supporting programs towards human resource development, audience capacity-building, and consumer empowerment. One-Stop Registration Center. The Negosyo Centers in LGUs shall extend its services as a one-stop shop for creative industries MSMEs or entrepreneurs in availing government services such as, but not limited to, intellectual property registration, product and business registration, loans, grants, and benefits programs.
Creative Industry Data and Information Management. The Philippine Statistics Authority shall set up a satellite account and a system of data collection and management for creative industries.The Philippine Creative Cities Network (PCCN). PCCN shall aid in incubating cities that wish to explore their creative resources, and in accelerating emerging creative cities towards the accreditation by the UNESCO to form part of the UNESCO Creative Cities Network.
Local and Cultural Arts Councils. All local government units (LGUs) shall establish a Local and Cultural Arts Council for better and more efficient implementation of this law.

Remember September!

Philippine Creative Industries Month is also established as a provision of this law– this will be the month every year when raising awareness and the celebration of the creative industries is highlighted.

Sounds exciting right? 

It seems like our lawmakers want to maximize opportunities, support, and provisions for the creative industries and we are all onboard! We see both the demand from businesses and supply from talents grow. Now with the government’s laid out strategies and focus, this law is meant to be impactful in the day-to-day operations and growth of so many professionals. The nation’s goal is to continue to expand this industry and secure our spot as the top creative hub in Asia by 2030. We’re excited to catch up with the rest of the world!

If you are in this industry- whether old or new, we hope to remind you that you are entitled to valuable rights, not just as an artist but as one with business interests. There is a framework that  can allow you to commercialize your creative works and we can guide you through this so you may maximize the returns of your creative labor.  A legal team with knowledge and expertise in this specific industry can propel you and your team to navigate this industry better. As the country heads toward increasing opportunities for these creative industries,  our firm is eager to work and advocate for creatives like you to make sure that you are protected and can commercially benefit from your talents and hard work.

Indeed, the future is creative, what are you most excited about this new law? Share in the comments or send us a message if you have some questions!

FOOTNOTES

  1. Art Fair Philippines, (2020), [Collage of Visayan Artworks], [Photograph], link: https://www.adobomagazine.com/philippine-news/arts-long-overdue-visayan-art-takes-the-spotlight-in-this-years-art-fair-ph/
  2. Department of Trade and Industry, (12 August 2022), [Pinoy Creatives celebrate newly-adopted Creative Industries Development Act], [Article] link: https://www.dti.gov.ph/news/pinoy-creatives-celebrate-newly-adopted-creative-industries-development-act/
  3. Del Prados, (2015), [State of the Philippine Creative Industries], [Presentation] link: https://industry.gov.ph/wp-content/uploads/2015/05/8th-TID-Ms.-Del-Prados-Presentation-on-Creative-Industries.pdf
  4. Villegas, Bernardo, (29 March 2022), [A Strategic Plan for Creative Industries], [Article] link: https://www.bworldonline.com/opinion/2022/03/29/438841/a-strategic-plan-for-creative-industries/#:~:text=In%20a%202014%20Report%20by,the%202019%20GDP%20of%20P19.
  5. Villegas, Bernardo, (29 March 2022), [A Strategic Plan for Creative Industries], [Article] link: https://www.bworldonline.com/opinion/2022/03/29/438841/a-strategic-plan-for-creative-industries/#:~:text=In%20a%202014%20Report%20by,the%202019%20GDP%20of%20P19.
  6. Gomez, Eireene, (2022 August 16), [Foreign Chambers Laud RA 11904], (The Manila Times), [Article] link: https://www.manilatimes.net/2022/08/16/business/top-business/foreign-chambers-laud-ra-11904/1854721
  7. Press and Public Affairs Bureau, (2022) [Rep. Christopher V.P. De Venecia on House of Representatives of the Philippines], [Photograph] link: https://www.congress.gov.ph/photojournal/zoom.php?photoid=3600