The Resale Royalty Comes of Age in Mexico

For decades, artists have faced a paradox in the art market. A painter may sell an artwork early in their career for a modest amount, only to see that same piece resold years later for a multiple of its original value. While collectors, galleries, and intermediaries benefit from the appreciation, the creator often receives nothing. The legal concept known as droit de suite, or the resale royalty right, was designed to address that imbalance.

In August 2026, Mexico’s Supreme Court of Justice (SCJN) issued one of the most important copyright rulings in recent years, confirming the validity of the country’s resale royalty system and extending its protection unequivocally to photographers. The decision in the Constitutional Appeal Review (ADR 1599/2026) provides long-awaited certainty for artists, photographers, galleries, auction houses, collectors, and investors participating in Mexico’s growing art market. 

What Is the Droit de Suite?

The resale royalty grants creators of original artistic works the right to receive a percentage of the price obtained every time their work is resold through certain commercial channels. In Mexico, Articles 92 Bis and 212 of the Federal Copyright Law establish this right for authors of visual art and photographic works when a resale takes place through a public auction, a commercial establishment, or with the involvement of a dealer or commercial agent. 

The underlying policy rationale is straightforward. Creative talent often generates value long after the initial sale. As an artist gains recognition, the market value of earlier works frequently increases. The resale royalty allows creators to participate in that appreciation and share in the economic success that their reputation generates. This rationale was highlighted during the Supreme Court proceedings, where it was noted that emerging artists often sell works at relatively low prices but later see those same works appreciate substantially in secondary market transactions. 

The Dispute Before the Supreme Court

The case originated from a challenge brought by an auction house against the tariff scheme issued by Mexico’s National Copyright Institute (INDAUTOR). The claimant argued that Mexico’s system was incompatible with Article 14ter of the Berne Convention because the applicable tariffs were not established directly by statute. It also argued that photographic works should not be included within the scope of the resale royalty right. 

The Supreme Court rejected these arguments and confirmed the validity of the Mexican framework. The Court held that the Berne Convention requires national legislation to establish the mechanism for determining the royalty, but it does not require the exact percentages to be written directly into the law. Therefore, Congress may validly authorize a specialized administrative authority such as INDAUTOR to set tariffs through a regulated procedure.

The Court further concluded that photographs are artistic works protected under the Berne Convention and that excluding photographers from the resale royalty regime would create an unjustified disparity in treatment compared to other visual artists.

Why This Decision Matters Beyond the Art World

At first glance, the dispute may appear relevant only to artists and copyright specialists. In reality, its implications extend much further.

The decision strengthens the legal predictability of transactions involving artwork and collectible photography. Legal certainty is a critical factor in any market. By confirming that the resale royalty system is compatible with both Mexican law and the Berne Convention, the Court has removed a significant source of regulatory uncertainty that had affected participants in the secondary art market. 

The ruling also reinforces a broader trend seen internationally: intellectual property rights are increasingly viewed not merely as legal protections, but as economic assets. Copyright today is a mechanism for wealth creation, investment, and commercialization. The Court’s decision recognizes that the economic value generated by creative works should remain connected, at least in part, to their creators. 

Practical Implications for Galleries and Auction Houses

For galleries, auction houses, dealers, and intermediaries, the most immediate consequence is compliance.

The Court confirmed that businesses involved in qualifying resales must continue to collect and remit the applicable royalty payments. The argument that the system is unconstitutional or inconsistent with international obligations can no longer be relied upon as a defense against payment obligations. 

Companies operating in the art sector should therefore review internal procedures concerning:

• Royalty withholding and reporting practices.
• Consignment and sale agreements.
• Recordkeeping systems for resale transactions.
• Due diligence processes relating to copyright ownership and beneficiary identification.

Organizations that have treated the resale royalty as a contested or uncertain obligation may need to reassess compliance frameworks in light of the Court’s clear endorsement of the regime.

A New Opportunity for Photographers

One of the most significant aspects of the decision is the confirmation that photographers benefit from the resale royalty right on the same basis as authors of traditional visual art.

Historically, photography has sometimes occupied an uncertain position in discussions about fine art. The Supreme Court explicitly rejected a narrow interpretation that would exclude photographic works from the concept of original artistic works. Instead, it relied on the Berne Convention’s recognition of photographs as protected artistic creations. 

For professional photographers, their heirs, and collective management organizations, this represents a potentially significant economic opportunity. As the market for collectible photography continues to expand, particularly in the digital and contemporary art sectors, resale royalties may become an increasingly meaningful revenue stream. 

The Bigger Lesson: Intellectual Property as a Business Asset

Perhaps the most important takeaway for business readers is that intellectual property rights are becoming increasingly intertwined with commercial value creation.

The Supreme Court’s decision is not merely about artists receiving additional compensation. It reflects a broader legal and economic reality: intangible assets drive modern markets. Whether the asset is a trademark, a patented technology, a copyrighted photograph, or a piece of fine art, businesses that understand the economic lifecycle of intellectual property are better positioned to manage risk and capture value.

The droit de suite ruling confirms that Mexico intends to maintain a robust framework for protecting creators’ economic interests while providing clear rules for market participants. For investors, collectors, galleries, and creative enterprises, the message is equally clear: resale royalties are no longer a theoretical obligation or a contested legal issue. They are now a firmly established component of doing business in Mexico’s art market. 

As the creative economy continues to grow, this decision may ultimately be remembered not only as a copyright case, but as a landmark recognition that artistic value does not end with the first sale. In today’s economy, creativity is an asset, and the law is increasingly ensuring that those who create it remain part of its success story.