The Philippine Intellectual Property Office (“IPOPHL”) issued on 03 July 2020 Memorandum Circular (MC) No. 2020-023 implementing Section 200 of the Intellectual Property (IP) Code which allows artists rights to proceeds of subsequent transfers of their copyrighted works or “resale rights”.
Section 200 of the IP Code mandates that “in every sale or lease of an original work of painting or sculpture or of the original manuscript of a writer or composer, subsequent to the first disposition thereof by the author, the author or his heirs shall have an inalienable right to participate in the gross proceeds of the sale or lease to the extent of five percent (5%). This right shall exist during the lifetime of the author and for fifty (50) years after his death.”
An author of a work is entitled to resale rights which subsist during his lifetime plus fifty (50) years after his death. In case of works of joint authorship, the resale right shall be reckoned from the moment of creation plus fifty (50) years after the death of the last surviving author.
Under MC No. 2020-023, the resale royalty, which shall be payable for covered works/transactions shall follow the schedule below:
| Gross Selling Price | Percentage Amount |
| Up to 150,000.00 | 5% |
| 150,000.01 to 350,000.00 | 4% |
| 350,000.01 to 600,000.00 | 3% |
| 600,000.01 to 1,000,000.00 | 2% |
| 1,000,000.01 to 2,000,000.00 | 1.5% |
| 2,000,000.01 – above | 1% |
MC No. 2020-023 states that it shall apply to the sale or lease of an author’s original works of painting, sculpture or manuscript subsequent to the first disposition thereof by the author. However, it will not apply to: (1) prints, etchings, engravings, works of applied art, and works of a similar kind wherein the author primarily derives gain from the proceeds of reproductions; and (2) subsequent sales made between private individuals without the participation of an art market professional and those which are made by individuals to public museums. There are no resale rights for these works.
The sale of an original work of art, even if the first transfer of ownership was not made for any consideration, money or otherwise, shall be regarded as a resale provided: (1) the subsequent sale involves a professional party or intermediary, or in case of lease, the same must be for a period longer than one year and covered by a written contract; (2) the work is enrolled and registered in the Registry of Qualified Works.
The term “first transfer of ownership” includes: (1) transmission of the work from the author by testamentary disposition, or in accordance with the rules of intestate succession; (2) disposal of the work by the author’s personal representatives for the purposes of administration of his estate; or (3) disposal of the work by an official receiver or a trustee in bankruptcy, for the purposes of the realization of the author’s estate.
A copy of MC No. 2020-023 is available here.
For more information on this announcement, you may direct your concerns to [email protected].