INDIA Trends and Developments Contributed by: Essenese Obhan and Neel Mason, Obhan Mason
rate retrospectively, but the fixing of a rate would give much needed guidance going forward. For an art market that is pro-buyer and comfortable with opacity and information asymmetry, some degree of market resistance will also have to be contended with. Buyers and intermediaries may be reluctant to sign off on contractual obligations that add transac - tional friction or reduce resale gains. This can be over - come by embedding transparency in the system – eg, by creating registry/provenance records and ensuring that resale royalty obligations are always known and disclosed. Cross-border enforcement is another concern. Sales outside India complicate enforcement, particularly where foreign law does not recognise contractual resale obligations or where auction houses are sub - ject to other rules. Reproduction Rights Why reproduction clauses are necessary Under the Indian Copyright Act, the author of a work is typically the first owner of copyright, and such right includes exclusive rights to reproduce, publish, com - municate to the public, and make adaptations of the work. Purchasing an original artwork confers owner - ship of the physical artwork but does not transfer the underlying copyright nor serve as a licence. In other words, ownership of an artwork does not by default include the right to reproduce or commercially exploit images of the artwork, unless such rights are explicitly granted by contract in writing signed by the author. This distinction is crucial. If a buyer reproduces and sells postcards, calendars, t-shirts or digital images derived from the artwork without permission, they will infringe the artist’s copyright and, in some cases, perhaps moral rights. Conversely, artists may also wish to grant limited rights to buyers (for example, to reproduce the work for private use or when selling the work), and can do so by contract. Reproduction clauses Reproduction clauses can ensure that buyers and third parties do not indulge in any kind of unauthorised commercial use. They also protect the artist’s right to control and receive compensation for reproduc - tions and merchandising. Where moral rights are also
contractually folded in, they ensure correct attribu - tion and prevent derogatory treatment of artworks. A well-drafted reproduction clause also provides clarity to galleries and buyers for promotional activities – eg, catalogues, online images, exhibition promotion. When drafting sale agreements for artworks, certain elements specific to reproduction and use must be considered: • scope of licence – exclusive versus non-exclusive, field of use (promotion, exhibition catalogues, com - mercial merchandising such as calendars, post - cards and apparel); • media and formats – print, digital, social media, broadcast, 3D reproduction, non-fungible tokens (NFTs); • territory and duration – worldwide versus limited territory, perpetual versus limited term; • purpose restrictions – private display, sale promo - tion, editorial use, commercial exploitation; • compensation – one-time fee or royalty, royalty rates or percentage of revenue from merchandise; • quality control and approval – artist’s right to approve reproductions and use contexts, quality, colours and layout; • attribution and moral rights – requirement to credit the artist, and prohibition of derogatory treatment or modification without consent; • delivery of assets – whether high-resolution images or digital files will be provided, in what format, and under what security measures; • indemnity and warranties – who bears liability for third-party claims or infringement, seller’s warranty on right to grant a licence; • revocation/termination – grounds on which a licence can be terminated (breach, insolvency, misuse); and • sub-licensing – whether the licensee can sub- license rights to third parties. For India, certain additional factors are relevant. In India, a licence that does not set out the term is deemed to be for a period of five years. If “territory” is silent, it is deemed to be for the territory of India. Also, if rights assigned or licensed are not exploited within a period of one year, the rights will be deemed
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