Mexican Supreme Court Upholds Artist’s Resale Rights

The Mexican Supreme Court of Justice of the Nation (SCJN) has upheld the legislative enactment of resale rights of artists, also known as "Droit de Suite". This provision, which was provided for in the Federal Copyright Law, had become a matter of judicial dispute when the regulatory authority, the INDAUTOR, established a tariff scheme to implement resale rights. This tariff scheme was a result of Article 92bis of the Federal Copyright Law. This section provided for resale rights of the artist or their estate in the case of resales at a public auction in commercial establishments like galleries or with the intervention of agents and the responsibility to decide the corresponding tariffs, that is, percentages of the proceeds of resale, was delegated to INDAUTOR under Article 212 of the Federal Copyright Law.

However, the legality of these tariffs was challenged before the SCJN on the grounds that they were not in synchronisation with Article 14 ter of the Berne Convention, which recognises the author's inalienable right to participate economically in sales of their works following the first transfer. The matter was touted as a dispute or conflict between a federal legislation and an international treaty to which Mexico is a state party.

"Resale rights ensure that artists, whose early works are often sold at modest prices, participate economically in the exponential growth in value that their continuous creative labor generates over a lifetime."

What Are Resale Rights?

In order to appreciate the implications of this judgement, it is important to briefly look at the reason behind resale rights being included in the Berne Convention, 1886. Most artists in the 19th and 20th centuries became famous much later in life and in some cases, after they had passed away. In many instances, their paintings were initially bought by the local elite, and they grew exponentially in value over the years. However, the artists were never given a portion from the resale of their artwork. For example, if an artist made a painting in 1780 and sold it for $50, and the painting is subsequently sold for $5000 in 1885, the entirety of that sum would remain with the seller of the artwork. This was perceived as unfair to the artist because it was their continuous labour and creativity that built up a portfolio to a level where even the older paintings now fetched high values.

To rectify this, the Berne Convention, 1886 included a right to a share of the resale consideration. Instead of determining the rate at which the artists would be able to claim a share, however, they left it to the state parties, out of respect for their sovereign law-making powers, to decide the rate as per their national legislation.

The Dispute in Mexico

There are two main points of law which were argued before the SCJN and are of great importance to artists in Mexico and to the general community of artists around the world.

1. Fixation of Rates Through Delegation: The first argument challenging the tariff scheme was based on a very narrow reading of the Berne Convention, which required the fixation of rates through national legislation. The appellants argued that this requirement could only be met if the parliament specified the tariff rate in the federal copyright law and that the delegation to INDAUTOR violated the Berne Convention. The court was steadfast in rejecting this argument, holding that the entire framework for resale rights has been provided for in Article 92bis and Article 212. The former provides the substantive right, and the latter allows a government regulatory authority to define the procedural tariffs. The court found nothing wrong with this and rejected this argument, holding that Mexico had complied with the requirements of the Berne Convention.

2. The Expansive Definition of Artistic Works: The second argument was then focused on photographs as a body of work that would also be covered under the resale rights here. Again, the appellants preferred a narrow reading of the Berne Convention, Article 14 ter of which refers to original works of art, in claiming that photographs could not be covered under the umbrella of art. The appellants were taking an extremely skewed view of what art is, attempting to define it within the domains of conventional fine art. The Court correctly rejected this argument as well, holding that such a narrow reading would be antithetical to the intent behind the Berne Convention and the Mexican Copyright Law. It relied upon Article 2 of the Berne Convention, which covers photographs, and found no reason to discriminate against them as compared to the creators of other artistic works.

Final Thoughts & Practical Implications

The court's decision would obviously be welcomed by artists of all kinds, including painters, authors, sculptors, photographers, filmmakers, lyricists, etc., working in Mexico and contributing to its cultural heritage. It also is a powerful reminder that frivolous appeals based upon technical but mala fide arguments can only go so far in stopping the application of a law that brings economic viability to the professions linked with the arts. It is no secret that many artists in their formative years create brilliant pieces of art and sell them at a pittance to sustain their lives, and that they continue to create more and more work, receive greater recognitions, and contribute significantly to the increase in the value of even their formative-year works. It is therefore only fair that they receive a share from the resale of their artwork.

The judgement also serves two interlinked purposes vis-a-vis the Berne Convention. Firstly, in holding that a national law need not fix the rates for resale rights in a statute, and that they be left to the regulatory authority, which can define those rates after consultations with various stakeholders is a great step towards a more sustainable art ecosystem. This is a welcome interpretation of the Berne Convention, which has the potential of being influential in subsequent matters in other jurisdictions. Secondly, in interpreting the term "work of art" in a more expansive manner, the court has brought a number of artists who do not practise traditional forms of art, into the fold of copyright protection, and given them a continuous economic interest in their creation.