By Cesar Augusto Taborda Lima
In Brazil, every resale of an original work of art or original manuscript entitles the author to at least 5% of the increase in price. The right cannot be waived or assigned, passes to the heirs and lasts until seventy years after the artist’s death. If the amount is not paid at the time of the resale, the seller holds it as depositary; at auction, the auctioneer does. The European Union takes a different approach: the royalty is a percentage of the sale price, in decreasing bands with a cap, and applies only to sales involving art market professionals. Under either system, the prudent course is to record prices and agree in writing who withholds and pays over the amount.
Art. 38. The author has the unwaivable and inalienable right to receive at least five per cent of the increase in price, if any, ascertained on each resale of a work of art or manuscript, provided they are originals, that the author has disposed of.
Sole paragraph. If the author does not receive the resale right at the time of the resale, the seller is deemed the depositary of the amount owed to the author, unless the transaction is carried out by an auctioneer, in which case the auctioneer shall be the depositary.
Law 9,610/1998 (Brazil’s Copyright Act), art. 38, head and sole paragraph (free translation).
What artists and heirs are entitled to
Article 38 covers originals that the author has disposed of. The statute does not define “original” for prints, photographs or cast sculpture, but Article 9 gives a copy of a work of plastic art made by the author himself the same protection as the original.
Economic rights last seventy years from 1 January of the year following the author’s death, passing in the order of succession set by civil law (Article 41). In a special appeal decided in 2009 (REsp 594.526/RJ) under the previous statute, Law 5,988/1973, which set the share at 20%, the STJ, Brazil’s Superior Court of Justice, held that the resale right is economic in nature and passes to heirs. According to the court’s case law bulletin no. 389 (Informativo), it recognised the sole heir’s share in sales by a bank that had received the drawings in settlement of a loan, even though their first transfer took place after the artist’s death.
Measuring the increase in price
Nothing is due if the work is resold for the same price or less. The statute does not say which earlier price is the benchmark. The 1973 law compared each sale with the one immediately before it, disregarded increases due solely to currency depreciation and exempted sales below five times the highest minimum wage (Article 39, paragraphs 1 and 2). Article 38 repeats none of these rules: it sets no threshold and says nothing about inflation adjustment or commissions.
Proof is the real difficulty, since artists do not always have access to the price of private sales. Under Brazil’s Code of Civil Procedure, the claimant must prove the facts on which the claim rests (Article 373, I), although the judge may shift the burden where proof is excessively difficult for one party or easier for the other (Article 373, paragraph 1) and may order a party to produce documents (Article 396).
Who holds the money and who collects it
The seller, or the auctioneer in an auction sale, holds the amount as depositary. The statute says nothing about a gallery selling a work consigned by a collector, so the consignment agreement should say who calculates, withholds and pays over the amount.
The law does not require collective management; authors may form associations to exercise their rights (Article 97). An association may collect only once accredited by the Ministry of Culture, activity by activity (Article 98-A; Decree 9,574/2018, Articles 2 and 3, paragraph 2). On the ministry’s official list, last updated in May 2023, AUTVIS, the Brazilian association for the rights of visual authors, is accredited for communication to the public, reproduction and distribution of the visual works listed in Article 7, items VII to X; the resale right is not among the listed activities. AUTVIS states that it works to secure the resale right for its members and has reciprocal agreements with foreign societies.
Europe, the United Kingdom and the United States
The Berne Convention, in force in Brazil under Decree 75,699/1975, makes the resale right optional in Article 14ter: it may be claimed in a country only if the law of the author’s country so permits, and to the extent permitted by the country where protection is claimed. Foreign authors domiciled abroad enjoy in Brazil the protection granted by the treaties in force there (Article 2 of Law 9,610/1998).
Directive 2001/84/EC bases the royalty on the sale price net of tax, by bands: 4% up to EUR 50,000 (5% at the Member State’s option), 3% up to EUR 200,000, 1% up to EUR 350,000, 0.5% up to EUR 500,000 and 0.25% above that, with a cap of EUR 12,500 (Articles 4 and 5). Each Member State sets a minimum price, which may not exceed EUR 3,000 (Article 3). The right covers resales involving art market professionals such as salesrooms, galleries and dealers; the seller pays, although national law may make the professional liable alone or jointly with the seller (Article 1). The Court of Justice of the EU has accepted that the party liable may agree with the buyer that the buyer will bear the cost, without affecting that party’s liability to the author (Christie’s France, C-41/14, 2015). Nationals of non-EU countries benefit only if their own country protects authors from the Member States in return (Article 7); for Brazilian artists, this turns on each Member State’s recognition of reciprocity.
In the United Kingdom, since 1 April 2024, the right applies to sales of £1,000 or more, with a cap of £12,500, according to government guidance.
In the United States, federal law provides no resale right. In Close v. Sotheby’s, Inc. (2018), the Ninth Circuit held that the federal Copyright Act preempts claims under the California Resale Royalties Act for sales after 1 January 1978.
Records and contract terms
Artists and estates should keep:
- the invoice, receipt or contract for each first sale, with price, date and buyer;
- images, certificates and an inventory of works;
- catalogues and auction results in which the works appear.
Galleries and auction houses should check, when taking in a work, whether the sale is a resale of a protected artist’s work, obtain from the consignor the acquisition price and authority to withhold the amount, and document the payment. A collector who resells without an auctioneer is, on the wording of the statute, the depositary. In cross-border sales, the extent of protection is governed by the law of the country where it is claimed (Berne Convention, Article 5(2)), and a choice of law between seller and buyer cannot reach a right that belongs to the artist and cannot be waived in Brazil or in the EU.
As I see it, the resale right works best as a habit of record-keeping rather than as a matter for litigation. A receipt filed on the day of the first sale is worth more, years later, than any argument about how the base should be calculated.