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Proposed Law No. 45 /X

Exhibition of Motives

1. This proposed law proceeds to the transposition into the national order of the Directive

n. 2001 /84/CE, of the European Parliament and of the Council of September 27, 2001,

relating to the right of sequence for the benefit of the author of an original work of art that

is the subject of successive disposals, aiming at the harmonisation of this right to level

community, on the grounds of the felt need to avoid distortions between the orders

national legal persons likely to prevent the normal functioning of the internal market.

2. Historically, the right of sequence was born in France upon a law of 1920.

There was already time that currents of opinion were manifented to find a

legal-economic solution to the fact that the plastic artist, and his family, once

transferred to outrain the work of art externally in a material support, watch, by

times, the extraordinary pecuniary valuations of its oeuvre in the art market.

In some cases, the primitive sale of the work of art by the artist, carried out at the beginning of his

career or at a time when the author is unknown to the public, it is done by a

reduced price, almost symbolic. Later, by influence of normal functioning

of the art market, the work can reach high values. When that happens, who

benefits from the valorisation of the work are third parties and not the author. Sometimes there are cases in

that the disproportion of prices is due to significant. That disproportion, which allows

up to some, enrichment from the value of the work in the secondary market without

being connected to the creation of the oeuvre, has shocked many spirits.

In fact, at the end of the nineteenth century and principles of the twentieth century, it could give itself the case, with

some frequency, of the author living poorly of his creative labor, while others

enriched with the successive transmission of his oeuvre.

In our days, the reality is no longer quite that, except perhaps for young creators,

how much the secondary art market continues to amaze the public with the value

achieved by some transactions, especially in auctions, fruit of aesthetic options,

of fashion and cultural marketing. Obviously, without forgetting the merit and talent of the

authors.

3. The idea, which was being calmed down by artists, jurists and politicians, in the face of

existence of the aforementioned sociocultural phenomena, it was thus the one to set up a mechanism

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that would allow in some way to the author, to benefit economically with successive ones

divestments of its oeuvre in the secondary market of art, i.e. after the primitive sale

performed by the artist.

4.O right of sequel is born, basically, want of the recognition of the peculiar

nature of the object produced, usually of its unique and unrepeatable character, or of the

use of the plastic works in the subject of legal-economic trafficking.

In the first case, because the work of art, frame, sculpture or other, is the act of creating and the

its coloured corpole expression in an inseparable manner. As opposed to what happens

with other works of the human spirit and different creators-writers, musicians-that

may be submitted to the Gutenberg model-that is, the possibility of reproduction in

multiple copies and modes of use of the original of an oeuvre, allowing the

author benefits with the successive uses of this one-in the plastic work, the author does not have that

possibility, and shall realize at one time the economic value of the work that it performed,

taking a high risk.

In the second case, because for centuries, artists worked fundamentally for

charge, of families, of aristocrats, of kings, of the church, of patrons. The artist's craft

was determined by the orders and the service of the theme. The work of art was not so much

an end in itself, such as an exercise of power or an instrument for the

transmission of values. Thick mode, between the seventeenth and eighteenth centuries, operated on

revolution: the artists progressively went on to work without being necessarily

on order, selling his creations to a new ente, the public. Thus the artist

gains in creative freedom, sets its pathway on the basis of a creator impulse, but

passes to be conditioned by the forms of reaction of the public, expressed by

formation of the market.

In the topicality, the relationship between the creator and the public is largely fuelled and

mediated by a diverse set of sabers, professions and institutions (critics,

lecturers, art galleries, auctioneers, museums, foundations, editorial activities, etc.)

5. The right of sequence is still today the subject of strong controversies in doctrine.

It is understood the reason: in the legal plan, the motives that were being raised

historically, relies more of the social, sentimental, subjective realm.

It is not easy, in strictly rational and right terms, to find solid arguments

to justify the existence of a right of participation of the author in the perception of a

pecuniary amount, corresponding to a percentage on the price of each of the

successive divestments of the work of art. Therefore, some jurists and legislators leaned-

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if to consider that the right of sequence should only focus on the added value

that if it were to occur between two successive disposals of the works, and not about the price of each

one of the transactions.

This initial legislative trend had repercussion in Portugal in the Code of 1966. And,

even after the legislative amendment occurred with the publication of the current Code of the

Right of Author and the Rights Conc. and the wording of its Article 54, not if

dissipated the controversies, now focusing on the interpretation of this standard, the

understanding of the right of sequence ora takes itself through the "theory of the most-worth theory", ora

by the application of the percentage on the price of each transaction of the work.

This latter option has been gaining supporters among legislators, having been welcomed

in the Community Directive. Among other reasons, the experience has shown that it is very difficult

proceed to the clearance and determination of the existing added value between two transactions,

aspect that, on a par with the absence of an appropriate mechanism of control of sales of

works of art in the secondary market, motivates the almost generalized absence of regular

concrete application of the right of sequence.

The incidence of the right of sequence on each transaction of the work, even in the case of

sale with injury-price lower than the last divestition-raises perplexity.

6. In international law, at the multilateral level, the right of sequence has been upheld in the

Convention of Bern, concerning the protection of literary and artistic works, at the conference

of the revision of the conventional text of Brussels in 1948, as per Article 14 para. have .

The Bern Convention, which has been ratified by Portugal, has instituted the right of sequence

as an optional faculty for the Member States of the Union, subjecting it to the

principle of material reciprocity. In a sense, the legal design of the right to

sequence represents an exception to the principle of national treatment provided for in paragraph 1

of Article 5 of the Convention. In this way, the protection to be given to foreign authors,

yet citizens of a Unionist state, by national legislation, is dependent on the

verification of reciprocity, in the indicated terms. This condition did not apply,

however, in the territory of the European Union, in particular by virtue of the effects of the

jurisprudence of the Court in the case of the "Phil Collins" judgment, which impeded

the establishment of unequal principles and criteria in the treatment of authors

originating in any Member State.

Incidentally, the reaffirmation by the Court of a non-discriminatory treatment to be applied to the

authors of the European Union, constituted one of the reasons that motivated the approval of the

European directive.

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In fact, several Member States-with particular emphasis on the United Kingdom, a

of the most important art markets, on a global level-do not integrate in their

legislation the right of sequence. This situation, which occurs in almost all countries

of anglo-saxonic influence, carries significant distortions in the domestic market and is

potentially violating the rules of competition.

In the sense of avoiding doubts of interpretation of Portuguese law, the inclusion of

a standard that requires the assignment of the right of sequence to authors from Countries not

members of the European Union, only in the event of the existence of the principle of

reciprocity.

7. The Directive, on the similarity of the Bern Convention, stipulates in its recital 1 and

in Article 1 that the right of sequence is an irrerenunciable and inalienable right.

This legal qualification entails considering this patrimonial right as of a

special nature, own from a personal right. In effect, the exclusion of the

transferability of the right of sequence is an exception to the general principle of free

transmission of the economic exploitation faculties of the works protected by the right

of author, striking aspect of the exclusive right; and obviously means a special

protection of the author and his heirlooms, seen by the legislator as likely to not

to resist the negotiating power of some subjects with greater economic capacity in the

market; it is also also demonstrative of the persistence of an idea that sees in the artist

a fragile, manipulable and poor, historically outdated being.

8. The Directive qualifies the right of sequence as a right of fruition which permits

to the author of a work of original plastic or graphic art benefit from a participation

economic on the price of each transaction of the work and in its successive divestments,

after its initial alienation by the author, free of tax.

The object of the right is made up of the material works, specifically the support in which

the protected work is incorporated (recitals n. ºs 1 and 2).

However, and to the harness of the envisaged in the Bern Convention, the Directive does not focus the

sequence right on the original manuscripts of writers and composers.

9. The Directive, in respect of objective scope, provides that the right of sequence shall be

apply to the original artwork, understanding itself by such, any works of graphic art or

plastic, in so far as they are performed by the artist himself or whether they are copies

considered as original works of art.

In general, there are no problems when it comes to single works. The problems

of interpretation arise when the artist uses techniques conducive to the preview

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elaboration of a mould or a negative, from which the object is taken from it

wants to produce, which can be reproduced in limited exemplars by competing to the

author determines which are the ones it takes as having creative value.

The Directive establishes that copies of works of art covered by the scope of

application must, in principle, be numbered, signed or otherwise properly

authorized by the artist, with a view to preserving the link of the work to the author and his

originality, only being admitted to recourse to interpretation, in exceptional cases, and

through the dominant uses admitted to the cultural communities to which they respect the

works in analysis.

10. The right of sequence, in accordance with Article 1 of the Directive, applies to all

acts of successive disposal of the work involving sellers, purchasers or

intermediaries, professionals of the art market, namely auctioneers, galleries of

art and, by and large, any dealers of works of art. From the outside, they get all

the acts of disposal of the work whose subjects are private, not actuated as

professionals in the art market, including museums that are not for profit and

are open to the public.

11. Unlike in the current Article 54 of the Code of Author's Law and

Rights Related, the Directive has opted for a system of degressive rates by strips of

prices, with a minimum threshold being established below which the right of sequence does not

applies (3000), admitting, however, the faculty of the Member States to fix

national thresholds lower than the Community threshold.

Pese although the freedom given to states by the Directive, it has chosen to adopt the system

proposed in the Directive.

12. As per the Directive, the payment of the participation corresponding to the right of

sequence shall compete with the seller of the work and, secondarily, to the merchant of

art.

In addition to the determination of the person-singular or legal-obliged by law to the herd

compliance with the right of sequence, it matters to institute control mechanisms of the

transactions that allow the author or his or her representative to obtain the guarantee of the exercise

of the right. It is known that the mere abstract prediction of the right of sequence in the law has

entailed, in most states, their non-effective compliance in the practice partner-

cultural. Hence the need to create a mechanism that will vibe access to

relevant information, capable of making the system operable.

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It does matter, however, that access to information should be made in respect of confidentiality

of the informative elements in the possession of the trader and that they do not have to do, direct or

indirectly, with the transactions of the works of art. Hence, access is conditioned

to the information strictly necessary to understand the exact terms of the acts

of trade here relevant.

13. The Directive leaves the Member States, in obedience to the principle of

subsidiarity, the institution or not, of compulsory collective management as the

instrument capable of allowing normal settlement and collection of payments

involved in the right of sequence.

It matters, in this purpose, to emphasize that the right in question, in view of its peculiar

nature, if it constitutes in the personal legal sphere of the author. It is he the true and unique

holder of the right. Hence the legitimate option by individual management or management

collective is a faculty that should be left entirely free to the right holder.

The legislator, as a general rule, shall refrain from imposing one of the modalities of managing the

exercise of the right in question. This does not mean that if you do not recognize the virtualities

positive in favour of the author, who are present in the field of collective management of the

right. However, the legal prediction of mandatory collective management is only admissible in

exceptional cases, which does not seem advisable or necessary in the present situation.

14. The term of the protection afforded by the right of sequence corresponds to the

provided for in Article 1 of Directive No 93 /98/CEE of the Council of October 29

1993, on the harmonisation of the term of protection of copyright and certain rights

neighbouring rights, i.e. during the lifetime of the author and 70 years after his death, in the sphere

legal of your heirs.

15. The transposition of the directive in question, implies the reformulation of Article 54 of the

Code of the Right of Author and Rights Condices, standard applicable to the right to

sequence.

16. Take advantage of the occasion of transposition of the Directive on the Right of Sequel

to introduce a new wording to the provisions of the b) of Article 7 (1) of the

Decree-Law No. 332/97 of November 27, diploma that transposed into the legal order

national a Council Directive No 92 /100/CEE of November 19, 1992 on

to the right to hire, the right to comodate and certain rights related to the right of

author.

The modification aims to grant only the producers of phonograms the rights

assigned by the Directive, excluding videogram producers in the matter concerned.

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In this way, some doubts of interpretation are clarified as to the exact application

of the Directive, in the aim of respecting the objective sense of what it contains, aspect

which determined the European Commission to intry against Portugal action by

default in the Court of Justice (Case No 61/05).

In effect, the "aluguer/comodato" directive sets out the exhaustive and limited list of

holders of rights to whom the new legal faculties are assigned therein.

Now, the producers of videograms are not contemplated, but the producers of the

first fixation of the film, contrary to the hitherto foreseen in Portuguese law.

Thus:

Under the terms of the paragraph d) of Article 197 (1) of the Constitution, the Government presents to the

Assembly of the Republic the following proposal for a law:

Article 1.

Subject

This Law regulates the right of sequence, by transposing into the national legal order a

Directive No 2001 /84/CE of the European Parliament and of the Council of September 27 of

2001, relating to the right of sequence for the benefit of the author of an original work of art

and amend the Decree-Law No. 332/97 of November 27.

Article 2.

Amendment to the Code of the Right of Author and the Rights Condices

Article 54 of the Code of the Right of Author and of the Rights Condices, approved by the

Decree-Law No. 63/85 of March 14, as amended by the Laws No. 45/85 of September 17,

and No. 114/91 of September 3 by the Decrees-Leis n. 332/97 and No. 334/97, both of

November 27, and by Law No. 50/2004 of August 24, passes to have the following

wording:

" Article 54.

[...]

1-The author of an original work of art, which is not of architecture nor

of applied art, is entitled to a stake on the price obtained,

free of tax, by the sale of this work, carried out by

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intervention of any agent who acts professionally and stably in the

art market, after its initial alienation by the one.

2-For the effect of the provisions of the preceding paragraph, it is understood to be

original art any work of graphic or plastic art, such as tables,

collages, paintings, drawings, serigraphies, engravings, prints, lithographs,

sculptures, tapestries, ceramics, glazing and photographs, to the extent in

which is performed by the author, or treat itself to copies deemed to be

original works of art, owing to these being numbered, signed or by

any mode by it authorized.

3-The right referred to in paragraph 1 shall be inalienable and irrerenunciable.

4-A participation on the price provided for in paragraph 1 is set from the following

mode:

a) 4% on the selling price the amount of which is understood

between € 3000 and € 50000;

b) 3% on the selling price the amount of which is understood

between € 50000, 01 and € 200000;

c) 1% on the selling price the amount of which is between

€ 200 to 000.01 and € 350000;

d) 0.5% on the selling price the amount of which is understood

between € 350 to 000.01 and € 500000;

e) 0.25% on the selling price the amount of which is higher than € 500

000, 01.

5-The total amount of participation in each transaction may not exceed

€ 12500.

6-Except for the provisions of the previous figures, any and all

work transaction of original art that is intended to integrate the

heritage of a for-profit museum and open to the public.

7-The payment of the participation due to the author is the responsibility of the

seller of the original work of art and, secondarily, of the entity

up to date in the art market through which the transaction has operated.

8-The author or his or his representative, in order to ensure compliance with the

your right of participation, may complain to any intervener in the

transaction of the original artwork the information strictly useful to the

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said effect, using, if necessary, the administrative means and

proper judicial.

9-The right to claim the information referred to in the preceding paragraph

prescribes within three years of the knowledge of each

transaction.

10-The right referred to in paragraph 1 may be exercised, after the death of the author,

by the heirs of this, until the expiry of the copyright law.

11-A The award of this right to nationals of non-EU countries is

subject to the principle of reciprocity. "

Article 3.

Amendment to Decree-Law No 332/97 of November 27

Article 7 of the Decree-Law No. 332/97 of November 27 is to have the following

wording:

" Article 7.

[...]

1-[...]:

a) [...]

b) To the producer of phonograms, with respect to their phonograms;

c) [...].

2-[...]

3-[...]

4-[...]. "

Seen and approved in Council of Ministers of October 20, 2005

The Prime Minister

The Minister of the Presidency

The Minister of Parliamentary Affairs