Burden of proof in disclosure disputes in fine art resales

An accredited organization - an association of copyright holders for the protection and management of copyrights in the field of fine arts - filed a lawsuit against the auction house on the obligation to provide information on sales of original works carried out with the participation of the defendant for a certain period.

Motivated by the fact that the auction house did not fulfill her request for information and documents that are needed to ensure the payment of remuneration for the resale of original works of fine art: information about works sold in a certain period, about sellers and the resale price, copies of auction protocols, copies of contracts purchase and sale of all lots sold, etc.

The courts of first instance and appeal denied the claim, upholding the arguments of the auction house that the plaintiff could not claim information about all sales for the period, t.to. part of the information is publicly available (published in the public domain on the website of the auction house), and the other part is not transferable, because. contradicts the procedure and limits for the provision of information provided for by the Rules for the payment of remuneration to the author when reselling original works [1].

As follows from paragraph 1 of the Rules, they determine the procedure for paying remuneration to the author when reselling original works of fine art, i.e., at each subsequent sale of the original after its initial alienation by the author. According to paragraph 6 (4) of the Rules, an accredited organization has the right to request disputed information only if it has information about a completed transaction for the resale of the originals of the work. Since the details of the seller and documents on the sale price are requested for remuneration purposes, an accredited organization may require the provision of information not about all sellers, but only about those who are payers of the relevant remuneration in favor of recipients of remuneration whose rights it manages.

Establishing the fact of resale of the originals of specific works is a circumstance that is important for the correct consideration of the dispute, and the burden of proof lies with the accredited organization by virtue of Part 1 of Art. 65 APC RF [2].

Since the association did not provide individualized information about the resale of original works, the courts concluded that the plaintiff's requirements for information on all sold lots and about sellers in relation to sales of original works for the period should not be satisfied.

The IP Court Board [3] did not agree with this approach, pointing out the incorrect distribution of the burden of proof: the Civil Code of the Russian Federation [4] and the Rules do not oblige an accredited organization to find out whether an intermediary carries out a primary sale or resale of original works, they do not oblige it to check all auctions conducted by professional participants in the market for the sale of works of art . The procedure for providing information by professional market participants is provided for the purpose of fulfilling the requirements of Art. 1293 of the Civil Code of the Russian Federation in the interests of the authors and their heirs, who are the weak side in the disputed legal relationship. An accredited organization is not obliged to search for information about when and what resales were carried out by the defendant, which excludes the obligation to prove the implementation of such resales. Contrary to the defendant's arguments, it is he who is obliged to provide the requested information.

Sources:

1.Rules for the payment of remuneration to the author when reselling original works of fine art, copyright manuscripts (autographs) of literary and musical works, approved. Decree of the Government of the Russian Federation of April 19, 2008 N 285 (as amended on August 28, 2018) // SPS "ConsultantPlus"

2."Arbitration Procedural Code of the Russian Federation" dated July 24, 2002 N 95-FZ (as amended on March 18, 2023) // SPS "ConsultantPlus"

3.Resolution of the SIP dated 19.01.2023 N C01-200/2022 in case N A40-263153/2020 // SPS "ConsultantPlus"

4."Civil Code of the Russian Federation (Part Four)" dated December 18, 2006 N 230-FZ (as amended on December 5, 2022) // ATP "ConsultantPlus"