Amendment to the Intellectual Property Act: artist's resale right

On October 12, Spanish Act 14/2021 was published introducing new measures to support the culture sector in view of the COVID-19 crisis. Among other measures, Act 14/2021 amends the Consolidated Text of the Intellectual Property Act in relation to the artist's resale right.

As we all know, the artists’ resale right entitles the authors of graphic or plastic works of art to receive part of the resale price from the reseller when their works are sold on. Therefore, if an artist sells a painting that is subsequently sold on one or more times, the successive resellers must give part of the price to the artist.

This right must be managed through management entities, but, until now, section 24 of the Intellectual Property Act placed the holder of the resale right at the center of the resellers’ obligations, which did not suit collective management. Therefore, the reform has removed resellers’ obligations to the rightsholders, leaving it up to the entities to manage this right.

Furthermore, the new wording of section 24 envisages that there may be several entities managing this right under their bylaws. In that case, to claim this royalty, they must act under a single representation.

This amendment, therefore, seeks to update the artist’s resale right to better align it with standard practice and make it more flexible to ensure it can cope with potential changes in management entities.

However, with the arrival of NFTs and the challenges they pose for managing art, we must ask whether the regulation on the artist's resale right is sufficiently aligned with the actual situation and, in particular, whether it can deal with advances in technology. As we have already discussed in this blog post, applying the artist's resale right to NFT transactions on art is the source of significant doubts, and law makers may have missed an excellent opportunity to regulate a resale right that truly solves the challenges of managing art today.