The Essence and Legal Basis of the Resale Royalty Right
The resale royalty right is Georgia's statutory implementation of an internationally known instrument, and its basis is Article 20 of the Law on Copyright and Neighbouring Rights — the rights of the author of a work of fine art. Under this norm, the author of a work of fine art is entitled to demand of the owner of the work permission to reproduce it — an access right — although the owner cannot be required to bring the work to the author. The royalty itself operates as follows: after the first alienation of the original of a work of fine art or photography, upon every subsequent sale — including through professional intermediaries such as art salons, fine-arts galleries and others — the author or the author's heirs are entitled to receive a royalty from the seller. For the purposes of the article, copies of the original made by the author or with the author's permission in limited quantity are equated with the original. The right thus travels with the work itself: no matter whose hands it passes through, each qualifying resale generates the author's claim.
The Tiered Royalty Scale
The law sets the royalty in tiers according to the sale price: where the sale price is from 500 to 100 000 GEL — 4%; where it is from 100 000,01 to 400 000 GEL — 4000 GEL plus 3% of the amount above 100 000,01 GEL; where it is from 400 000,01 to 700 000 GEL — 13000 GEL plus 1% of the amount above 400 000,01 GEL; where it is from 700 000,01 to 1 000 000 GEL — 16000 GEL plus 0,5% of the amount above 700 000,01 GEL; and where the price exceeds 1 000 000 GEL — 17500 GEL plus 0,25% of the amount above 1 000 000 GEL. Each tier is computed separately: the fixed amount of the lower tier is carried up and supplemented by the next tier's percentage, and the royalty resulting from this rule must not exceed 25 000 GEL without payment of taxes. For sellers this means the royalty must be calculated tier by tier rather than on the whole price — an error here translates directly into loss, and the cap discipline matters as much as the percentages.
Collection Through Collective Management and the Seller's Information Duty
Article 20 provides that the royalty is collected through an organization managing property rights on a collective basis, upon whose demand the seller of the work is obliged to submit information about the sales. The author therefore does not have to negotiate directly with each seller: the relationship is steered by the collective-management organization, and the seller's duty to account exists toward that organization. Alienation of the right is prohibited: by law or by will it passes only to the author's heir, for the term of the copyright — the author can neither assign it away nor contract out of it. This combination of collective collection and inalienability protects the author from pressure at the moment of sale, when the bargaining position is weakest, and preserves the royalty for the statutory chain of succession.
The Managing Organization's Distribution Rules
Article 66-2 of the same law establishes the rules for collecting and distributing royalties. An organization managing property rights on a collective basis allocates the entire income from its activity, regularly, diligently and with maximum accuracy, among the rightholders whose rights it manages. It must maintain separate accounts: for royalties connected with rights management; for income arising from the management of its own property or from other activity permitted by law; and for royalties that could not be distributed because of the impossibility of identifying or locating the rightholders. The basic principles of distribution must be defined in the organization's statute so as to ensure a proportional, non-discriminatory, appropriate and fair distribution. The collected royalty must be paid to rightholders no later than 9 months from the end of the financial year in which it was collected — save for objective reasons connected with accounting or identification. Where rightholders cannot be located, the amounts are kept on a separate account, the organization must take every necessary measure to find them, and no later than 3 months after the deadline it must publish on its website information about works one or more of whose rightholders are unidentified.
Frequently Asked Questions
We answer the most frequently asked questions about the resale royalty right below.
Which sales attract the resale royalty?
Every subsequent sale after the first alienation of the original, including through professional intermediaries such as art salons and galleries; copies made with the author's permission in limited quantity are equated with the original.
How much is the royalty and how is it computed?
On a tiered scale: 4% between 500 and 100 000 GEL; then decreasing rates of 3%, 1%, 0,5% and 0,25% above successive thresholds; the total royalty, without payment of taxes, does not exceed 25 000 GEL.
From whom does the author claim the royalty?
From the seller, but collection is carried out by a collective-management organization, upon whose demand the seller must submit information about the sales.
Can the right be alienated?
No — Article 20 prohibits its alienation; it passes only by inheritance, by law or by will, to the author's heir for the term of the copyright.
How We Help on Legal.ge
The Legal.ge team assists both authors and sellers on resale-royalty questions: we review the correctness of royalty calculations under the tiered scale, check compliance with the duty to submit sales information, assess succession issues, and protect authors' interests in relations with managing organizations. If a royalty was not paid upon a sale or the calculation looks doubtful — contact us on Legal.ge and we will assess the prospects of your claim.