Resale Royalty Right; Public Hearing, 19326-19329 [2013-07270]
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Federal Register / Vol. 78, No. 61 / Friday, March 29, 2013 / Notices
whether the transaction is in fact a
prohibited transaction; and
(3) The availability of this exemption
is subject to the express condition that
the material facts and representations
contained in the application accurately
describes all material terms of the
transaction which is the subject of the
exemption.
Signed at Washington, DC, this 26th day of
March, 2013.
Lyssa E. Hall,
Acting Director of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. 2013–07380 Filed 3–28–13; 8:45 am]
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MAL.
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NAZ–5,
NAZ–6.
AR–6, AR–7,
MAR.
CA–1, CA–27,
CA–28,
NCA–1.
CT–1.
MDE.
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KY–10, KY–2,
KY–5, KY–
9, MKY.
LA–1, LA–12,
MLA.
MD–1, MMD.
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11.
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9, MMI,
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6, MMN.
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9, MMS,
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7, MMO.
NH–1.
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MNM,
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SUMMARY:
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Arkansas ...............................
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State or Territory
Service
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North Dakota .........................
ND–3, MND,
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20, OH–21,
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MOH.
MOK, NOK–1.
PA–24.
PR–2.
SD–2, SD–4,
NSD–1.
TN–10, TN–4,
TN–7, TN–
9, MTN.
TX–13, TX–
14, TX–15,
MTX, NTX–
1.
VT–1.
VA–17, VA–
18, VA–19,
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MVA.
WV–5.
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1.
Ohio .......................................
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Dated: March 21, 2013.
Victor Fortuno,
General Counsel & Vice President, Legal
Services Corporation.
[FR Doc. 2013–07269 Filed 3–28–13; 8:45 am]
BILLING CODE 7050–01–P
LIBRARY OF CONGRESS
United States Copyright Office
[Docket No. 2013–3]
Resale Royalty Right; Public Hearing
U.S. Copyright Office, Library
of Congress.
ACTION: Notice of public hearing.
AGENCY:
SUMMARY: The United States Copyright
Office will host a public hearing to
discuss issues relating to the
consideration of a federal resale royalty
right in the United States. The meeting
will provide a forum for interested
parties to address the legal and factual
questions raised in the comments
received by this Office in response to its
September 2012 Notice of Inquiry.1
DATES: The public hearing will take
place on April 23, 2013, from 1:00 p.m.
to 5:00 p.m. The Copyright Office
strongly prefers that requests for
participation be submitted
electronically. A participation request
form is posted on the Copyright Office
1 77 FR 58175 (Sept. 19, 2012), available at
https://www.copyright.gov/fedreg/2012/
77fr58175.pdf.
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Web site at https://www.copyright.gov/
docs/resaleroyalty/. Persons who are
unable to submit a request electronically
should contact Jason M. Okai, Counsel
for Policy and International Affairs, at
202–707–9444.
The public hearing will take
place in the Copyright Office Hearing
Room, LM–408 of the Madison Building
of the Library of Congress, 101
Independence Avenue SE., Washington,
DC 20559.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Karyn Temple Claggett, Associate
Register of Copyrights and Director of
Policy and International Affairs, by
email at kacl@loc.gov or by telephone at
202–707–1027; or Jason Okai, Counsel
for Policy and International Affairs, by
email at jokai@loc.gov or by telephone
at 202–707–9444.
SUPPLEMENTARY INFORMATION:
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Background
At the request of Congress, the
Copyright Office is reviewing: (1) how
the current copyright legal system
affects and supports visual artists; and
(2) how a federal resale royalty right for
visual artists would affect current and
future practices of groups or individuals
involved in the creation, licensing, sale,
exhibition, dissemination, and
preservation of works of visual art. The
Office published a general Notice of
Inquiry on September 19, 2012 seeking
comments from the public. The Notice
provided background on the Office’s
previous review of this issue in its
December 1992 report titled Droit De
Suite: The Artist’s Resale Royalty 2 (the
‘‘1992 Report’’) as well as recent
international developments. After
extending the deadline for the public to
submit comments until December 5,
2012, the Office received fifty-nine
comments from various interested
parties. The comments raised a variety
of issues, including purely legal matters
as well as specific experiences and
perspectives of individual artists,
corporate entities, and collecting
societies. All comments, along with the
Notice of Inquiry, are available at
https://www.copyright.gov/docs/
resaleroyalty/. The Office now
announces a public hearing to receive
further input on issues raised in the
comments. The agenda and the process
for submitting requests to participate in
or observe the public hearing is
available on the Copyright Office Web
site.
2 U.S. Copyright Office, Droit De Suite: The
Artist’s Resale Royalty (1992), available at https://
www.copyright.gov/history/droit_de_suite.pdf.
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Subjects of Public Hearing
The public hearing will cover the
following topics: (1) The changing legal
landscape; (2) portability of the
secondary art market; (3) effect on the
primary art market and the incentive to
create new works; (4) first sale and the
free alienability of property; (5) visual
artists and sales of works; (6) the Equity
for Visual Artists Act; (7) effect on
museums; and (8) constitutional
concerns. Each of these topics is
explained in more detail below.
1. The changing legal landscape. In
its 1992 Report, the Copyright Office did
not recommend adoption of a resale
royalty right in U.S. law.3 That report,
however, also noted that Congress might
wish to reexamine whether the United
States should implement a resale royalty
law if the European Union harmonized
its resale royalty law.4 In response to the
September 19, 2012 Notice of Inquiry,
several commenters stated that China,
which has established itself as a major
art market, is also considering a resale
royalty right in pending domestic
legislation. Many commenters also
noted that even though the European
Union harmonized its resale royalty law
through its Droit de Suite Directive of
2001 (the ‘‘EU Directive’’), nothing has
changed substantively in the United
States since the Copyright Office’s 1992
Report and there is therefore no need to
consider adopting a resale royalty now.
Have there been changes in the
worldwide legal landscape, art market,
or business practices since the Office’s
1992 Report that support or undermine
implementation of a resale royalty?
2. Portability of the Secondary Art
Market. Some commenters expressed
concern that if the United States adopts
a resale royalty right, a substantial
portion of the U.S. art market will shift
to markets where no resale royalty exists
currently. Conversely, some
commenters cited figures showing that
the German, United Kingdom, and
French markets actually grew after the
EU Directive was implemented, while in
the United States and Switzerland,
where there is no resale right, the
markets declined.
What factors, other than
implementation of a resale royalty right,
affect the portability of the art market?
What are the experiences in countries
following the implementation of a resale
royalty where one did not exist
previously? For example, if China
implements a resale royalty, how would
this impact the worldwide market?
3. Effect on the Primary Art Market
and the Incentive to Create New Works.
3 1992
Report at 149.
4 Id.
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Some commenters addressed whether a
resale royalty fosters creativity for
young artists, contributes to the
financial sustainability of visual artists,
motivates artists to produce more
artistic works, and enhances an artist’s
reputation thereby generating more
primary and secondary sales. Some
comments stated that the existence of a
resale royalty would not incentivize
artists to create and that the royalty only
would benefit a very few artists who are
already professionally and financially
successful.
The Office is interested in learning
more about the effect of a federal resale
royalty on the primary art market and
whether it is an incentive for artists to
create new work. Additionally, the
Office would like further information on
whether the payment of a resale royalty
to artists’ heirs foster creativity and, if
so, how.
4. First Sale and the Free Alienability
of Property. Some commenters
suggested that a resale royalty is
incompatible with the first sale doctrine
set forth in 17 U.S.C. 109. These
commenters argued that a resale royalty
provides an ongoing property right each
time an artwork is sold (subsequent to
its initial sale), prevents buyers from
acquiring unencumbered title to a work
of art, and adds a layer of complexity to
secondary transactions. Other
commenters argued that a resale royalty
does not conflict with the ability to
freely transfer property because the
royalty simply would require payment
when a subsequent sale has been made
and does not otherwise restrict the
transfer or sale of a particular work of
art.
In light of these comments, the Office
has the following questions: To what
extent, if any, are the first sale doctrine
and a resale royalty right incompatible?
Would a resale royalty have a
detrimental effect on the initial sale of
the artwork? Should the right to claim
royalties on secondary sales be waivable
and, if so, what effect would that have
on initial sales of artwork?
5. Visual Artists and Sales of Works.
Many commenters suggested that visual
artists are at a great disadvantage in
relation to creators of other copyrighted
works because visual artists are not paid
for the subsequent resale of their
original works and do not enjoy a
benefit proportional to the success of
their work. Thus, these commenters
cautioned that without a resale royalty,
visual artists are excluded from the most
significant profits that their works may
generate following its creation.
Commenters opposing a resale royalty
noted that copyright law does not assure
that each type of work will generate
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similar levels of remuneration and it is
not the role of copyright law to elevate
one type of work over another. These
commenters further claimed that any
perceived inequities in the amount of
remuneration for a particular category of
work exists because of the
characteristics of that type of work and
the attendant methods of exploitation
for those works.
Thus, the Office is interested in
whether there is such an inequity and,
if so, to what extent, if any, a resale
royalty will affect it.
6. The Equity for Visual Artists Act.
The Office received twenty-five
comments that either cited to the
Equality for Visual Artists Act
(‘‘EVAA’’) 5 or commented directly on
the proposed legislation. The Office is
interested in hearing more about what
provisions should or should not appear
in any resale royalty legislation and,
more specifically, views on the
following EVAA provisions:
a. Transaction Types. The current
version of the EVAA applies only to live
auction sales when the auction house
meets certain eligibility requirements.
Many comments noted that a resale
royalty limited to certain live auction
sales would not represent the majority
of secondary art sales and would
therefore fail to benefit a significant
number of artists. Other commenters
noted that, due to the high volume of
transactions, it would simply be
impractical to apply the right to
additional types of sales such as online
auctions, private sales, or gallery sales.
The Office would like more information
on the proper universe of sales to which
the resale royalty should be applied.
b. Scope. A few comments noted that
some art buyers view art as more than
paintings, sculptures, or photographs
and therefore any definition of art for
the purposes of establishing a resale
right should be broader than that in the
EVAA. The Office thus would like
further input regarding what types of
artwork should or should not be
included in any potential legislation.
c. Collection and Distribution of
Royalties. Commenters stated that,
generally, either a government agency or
a designated collection society
administers the resale royalty in most
jurisdictions that have such a royalty
law. These government agencies or
collection societies identify qualifying
sales, collect funds, deduct an
administrative fee, and redistribute the
monies to the artists. The collecting
society scheme proposed in the EVAA
would be different because the
5 H.R. 3688, 112th Cong. (2011); S. 2000, 112th
Cong. (2011).
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collecting society would not only collect
the royalty and redistribute it to the
artists, but it would also use royalty
monies to fund an escrow account from
which it would distribute grants to
museums to purchase more art. The
Office would appreciate more
information on the pros and cons of
such a structure.
d. Duration. Many commenters favor
keeping the term of the resale royalty
right consistent with the term of
copyright because such a term could
easily be tracked and calculated and
also allows for the royalty payments to
an artist’s heirs. The Office would like
to learn more about how to calculate a
justifiable term for a resale royalty right.
e. Threshold Value. The EVAA
establishes that a resale royalty would
only be paid on artwork sales of $10,000
or more. Some comments noted that a
$10,000 threshold amount would
exclude many types of works, e.g.,
photographs and prints, but also many
artists whose work is resold in the
secondary market for less than $10,000.
Other comments suggested that too low
of a threshold would result in a
situation where the cost of
administrating some royalty payments
would be higher than the cost of
administering the payments. The Office
is thus interested in learning more about
whether there should be a minimum
threshold before a resale royalty is owed
and, if so, what that threshold should
be.
f. Payment. Based on a review of the
comments, determining which entity
should be responsible for payment of
the royalty following the resale of a
work is somewhat controversial.
Jurisdictions that have a resale royalty
differ on which party is responsible for
paying the royalty. The EVAA provides
that the party responsible for remitting
the royalty to the collecting society
would be the party responsible for
receiving the ‘‘money or other
consideration’’ from the sale. The Office
would like further information on
which party should be responsible for
paying any resale royalty to the author.
g. Royalty Rate. Some comments
noted that the EVAA’s proposed 7%
royalty would be one of the highest rates
in the world. Many of the comments
suggested a 5% royalty with or without
a limit on total remuneration as the
most consistent with worldwide
practice. The Office would like more
information on what a reasonable
royalty rate could be and how to
determine what is reasonable.
7. Effect on Museums. Under the
EVAA, museums are eligible to receive
grants for purchasing art based on a
portion of the resale royalty paid to the
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author. One comment noted that the
EVAA may inadvertently undermine the
ways in which museums acquire and
deacession works as well as limit
museums’ access to certain pricing
information related to works or art. The
Office is interested in learning more
about the impact of these grants on
museums’ purchasing behavior.
8. Constitutional Concerns. Two
companies submitted comments
highlighting constitutional concerns
over federal resale royalties. The Office
is interested in hearing from parties
wishing to elaborate on the arguments
summarized below.
a. Retroactivity and Due Process. One
comment expressed concerns that if a
resale royalty would apply retroactively
to purchases already concluded it
would benefit artists at the expense of
buyers and collectors that already
purchased the artwork without the
requirement to pay a royalty on the
secondary sale. In addition, the
comment stated that while application
of a royalty to new works may be
permissible under the Copyright Clause
of the U.S. Constitution, its retroactive
application raises due process concerns.
Thus, the Office would like to hear more
regarding whether retroactive legislation
would be barred by the Due Process
Clause of the U.S. Constitution.
b. Takings. One comment noted that
applying a resale royalty to pre-existing
works may implicate the Takings Clause
of the U.S. Constitution through a
limitation on the free alienation of
property and the transfer of the royalty
payment from one individual to
another. The Office would like to learn
more about whether pre-existing works
would implicate the Takings Clause.
c. Prohibition Against Bills of
Attainder. One comment noted that a
federal resale royalty law such as the
proposed EVAA may raise issues under
the constitutional prohibition on bills of
attainder because it specifies particular
types of auctioneers that must pay the
royalty. For example, the EVAA
proposes that the royalty shall apply if
the sale takes place in a public auction
house that has annual sales in the
previous year of over $25 million—
excluding online and private sales. The
Office is thus interested in more
information on the relationship between
the EVAA’s limitations and the
constitutional prohibition on bills of
attainder.
Requests To Participate
Requests to participate should be
submitted online at https://
www.copyright.gov/docs/resaleroyalty/.
The requestor should also indicate, in
order of preference, the sessions in
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which the requestor wishes to
participate. Depending upon the level of
interest, the Copyright Office may not be
able to seat every participant in every
session he or she requests, so it is
helpful to know which topics are most
important to each participant. In
addition, please note that while an
organization may bring multiple
representatives, only one person per
organization may participate in a
particular session. A different person
from the same organization may, of
course, participate in another session.
Requestors who already have submitted
a comment in response to the Office’s
September 19, 2012 Notice of Inquiry, or
who will be representing an
organization that has submitted a
comment, are asked to identify their
comments on the request form.
Requestors who have not submitted
comments should include a brief
summary of their views on the topics
they wish to discuss directly on the
request form. Nonparticipants who wish
to attend and observe the discussion
should note that seating is limited and,
for nonparticipants, will be available on
a first come, first served basis.
Dated: March 25, 2013.
Karyn A. Temple-Claggett,
Associate Register of Copyrights and Director
of Policy and International Affairs.
[FR Doc. 2013–07270 Filed 3–28–13; 8:45 am]
BILLING CODE 1410–30–P
NATIONAL SCIENCE FOUNDATION
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Advisory Committee for Polar
Programs; Notice of Meeting
In accordance with Federal Advisory
Committee Act (Pub. L. 92–463, as
amended), the National Science
Foundation announces the following
meeting:
Name: Advisory Committee for Polar
Programs (1130).
Date/Time: Wednesday, May 1, 2013,
12:30 p.m.–5:00 p.m.
Place: National Science Foundation,
4201 Wilson Boulevard, Stafford II,
Room 555, Arlington, VA—THE
ADVISORY COMMITTEE MEMBERS
WILL ATTEND VIRTUALLY.
Type Of Meeting: Open.
Contact Person: Sue LaFratta, Office
of Polar Programs (OPP). National
Science Foundation, 4201 Wilson
Boulevard, Arlington, VA 22230. (703)
292–8030.
Minutes: May be obtained from the
contact person listed above.
Purpose of Meeting: To advise NSF on
the impact of its policies, programs, and
activities on the polar research
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community, to provide advice to the
Director of OPP on issues related to
long-range planning.
Agenda: Discussion of Committee of
Visitors’ reports on Antarctic and Arctic
programs.
Dated: March 26, 2013.
Susanne Bolton,
Committee Management Officer.
[FR Doc. 2013–07331 Filed 3–28–13; 8:45 am]
BILLING CODE 7555–01–P
NATIONAL SCIENCE FOUNDATION
Request for Information (RFI):
Reducing Investigator’s Administrative
Workload for Federally Funded
Research
Key Dates
Release Date: March 25, 2013.
Response Date: May 24, 2013.
Issued by
National Science Foundation (NSF).
Purpose
This RFI offers principal investigators
with Federal research funding the
opportunity to identify Federal agency
and university requirements that
contribute most to their administrative
workload and to offer recommendations
for reducing that workload. Members of
the National Science Board’s Task Force
on Administrative Burdens do not wish
to increase your administrative
workload with this request and you may
choose to answer only those questions
that are most pertinent to you. Your
responses will provide vital input so
that we can implement agency-level
changes and offer recommendations to
reduce unnecessary and redundant
administrative requirements.
Background
Over the past decade two Federal
Demonstration Partnership (FDP)
Faculty Workload Surveys (2005 and
2012) indicate that administrative
burdens associated with Federal
research funding are consuming roughly
42% of an awardee’s available research
time, a figure widely cited in numerous
articles and reports. To help address
these issues, the National Science Board
(Board) recently created a Task Force on
Administrative Burdens. The Task Force
is charged with examining the burden
imposed on Federally-supported
researchers at U.S. colleges, universities,
and non-profit institutions. Responses
to this RFI will be considered as the
Board develops recommendations to
ensure investigators’ administrative
workload is at an appropriate level.
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19329
Request for Information
The Task Force is seeking a response
to the questions below. In your
response, please reference the question
number to which you are responding.
Sources of Administrative Work and
Recommendations for Reducing Work
1. What specific requirements
associated with your Federally-funded
grants require you personally to do the
greatest amount of administrative work?
Where possible, please indicate whether
the origin of that administrative work is
a requirement at your institution, a
Federal requirement, or a requirement
from another institution. What
recommendations would you offer that
might help to reduce the level of work?
2. Principal investigators responding
to the FDP’s 2012 Faculty Workload
Survey identified the following sources
of administrative work, in addition to
human subject protection and animal
care treated below, as particularly
burdensome for Federal grantees:
D Grant progress report submissions;
D Finances (e.g. managing budget-toactual expenses, equipment and
supplies purchases, and other financial
issues/requirements);
D Personnel management, hiring, and
employee evaluation, and visa issues;
D Effort reporting;
D Conflict of interest;
D Responsible conduct of research;
D Lab safety/security;
D Data sharing; and,
D Sub-contracts (e.g. overseeing:
progress toward project goals and
deadlines; budget expenditures,
invoices, and other financial matters;
and, compliance and safety/security
issues).
If not addressed in question 1, for any
of the areas listed, do you believe that
the associated requirements
significantly increase the amount of
administrative work you personally
need to perform? Where possible
please indicate whether the source of
the required administrative work is a
requirement at your institution, a
Federal requirement, or a requirement
from another institution. What
recommendations would you offer
that might help to reduce the level of
work?
3. Do you receive administrative
support from your institution for
Federal grants? If yes, for what specific
preparation, reporting, and compliance
requirements do you receive
administrative support? Is the amount of
support excellent, good, adequate, poor,
or non-existent? Where does your
administrative support come from
within the institution (e.g. office of the
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]]>Agencies
[Federal Register Volume 78, Number 61 (Friday, March 29, 2013)]
[Notices]
[Pages 19326-19329]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-07270]
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LIBRARY OF CONGRESS
United States Copyright Office
[Docket No. 2013-3]
Resale Royalty Right; Public Hearing
AGENCY: U.S. Copyright Office, Library of Congress.
ACTION: Notice of public hearing.
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SUMMARY: The United States Copyright Office will host a public hearing
to discuss issues relating to the consideration of a federal resale
royalty right in the United States. The meeting will provide a forum
for interested parties to address the legal and factual questions
raised in the comments received by this Office in response to its
September 2012 Notice of Inquiry.\1\
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\1\ 77 FR 58175 (Sept. 19, 2012), available at https://www.copyright.gov/fedreg/2012/77fr58175.pdf.
DATES: The public hearing will take place on April 23, 2013, from 1:00
p.m. to 5:00 p.m. The Copyright Office strongly prefers that requests
for participation be submitted electronically. A participation request
form is posted on the Copyright Office
[[Page 19327]]
Web site at https://www.copyright.gov/docs/resaleroyalty/. Persons who
are unable to submit a request electronically should contact Jason M.
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Okai, Counsel for Policy and International Affairs, at 202-707-9444.
ADDRESSES: The public hearing will take place in the Copyright Office
Hearing Room, LM-408 of the Madison Building of the Library of
Congress, 101 Independence Avenue SE., Washington, DC 20559.
FOR FURTHER INFORMATION CONTACT: Karyn Temple Claggett, Associate
Register of Copyrights and Director of Policy and International
Affairs, by email at kacl@loc.gov or by telephone at 202-707-1027; or
Jason Okai, Counsel for Policy and International Affairs, by email at
jokai@loc.gov or by telephone at 202-707-9444.
SUPPLEMENTARY INFORMATION:
Background
At the request of Congress, the Copyright Office is reviewing: (1)
how the current copyright legal system affects and supports visual
artists; and (2) how a federal resale royalty right for visual artists
would affect current and future practices of groups or individuals
involved in the creation, licensing, sale, exhibition, dissemination,
and preservation of works of visual art. The Office published a general
Notice of Inquiry on September 19, 2012 seeking comments from the
public. The Notice provided background on the Office's previous review
of this issue in its December 1992 report titled Droit De Suite: The
Artist's Resale Royalty \2\ (the ``1992 Report'') as well as recent
international developments. After extending the deadline for the public
to submit comments until December 5, 2012, the Office received fifty-
nine comments from various interested parties. The comments raised a
variety of issues, including purely legal matters as well as specific
experiences and perspectives of individual artists, corporate entities,
and collecting societies. All comments, along with the Notice of
Inquiry, are available at https://www.copyright.gov/docs/resaleroyalty/.
The Office now announces a public hearing to receive further input on
issues raised in the comments. The agenda and the process for
submitting requests to participate in or observe the public hearing is
available on the Copyright Office Web site.
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\2\ U.S. Copyright Office, Droit De Suite: The Artist's Resale
Royalty (1992), available at https://www.copyright.gov/history/droit_de_suite.pdf.
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Subjects of Public Hearing
The public hearing will cover the following topics: (1) The
changing legal landscape; (2) portability of the secondary art market;
(3) effect on the primary art market and the incentive to create new
works; (4) first sale and the free alienability of property; (5) visual
artists and sales of works; (6) the Equity for Visual Artists Act; (7)
effect on museums; and (8) constitutional concerns. Each of these
topics is explained in more detail below.
1. The changing legal landscape. In its 1992 Report, the Copyright
Office did not recommend adoption of a resale royalty right in U.S.
law.\3\ That report, however, also noted that Congress might wish to
reexamine whether the United States should implement a resale royalty
law if the European Union harmonized its resale royalty law.\4\ In
response to the September 19, 2012 Notice of Inquiry, several
commenters stated that China, which has established itself as a major
art market, is also considering a resale royalty right in pending
domestic legislation. Many commenters also noted that even though the
European Union harmonized its resale royalty law through its Droit de
Suite Directive of 2001 (the ``EU Directive''), nothing has changed
substantively in the United States since the Copyright Office's 1992
Report and there is therefore no need to consider adopting a resale
royalty now.
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\3\ 1992 Report at 149.
\4\ Id.
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Have there been changes in the worldwide legal landscape, art
market, or business practices since the Office's 1992 Report that
support or undermine implementation of a resale royalty?
2. Portability of the Secondary Art Market. Some commenters
expressed concern that if the United States adopts a resale royalty
right, a substantial portion of the U.S. art market will shift to
markets where no resale royalty exists currently. Conversely, some
commenters cited figures showing that the German, United Kingdom, and
French markets actually grew after the EU Directive was implemented,
while in the United States and Switzerland, where there is no resale
right, the markets declined.
What factors, other than implementation of a resale royalty right,
affect the portability of the art market? What are the experiences in
countries following the implementation of a resale royalty where one
did not exist previously? For example, if China implements a resale
royalty, how would this impact the worldwide market?
3. Effect on the Primary Art Market and the Incentive to Create New
Works. Some commenters addressed whether a resale royalty fosters
creativity for young artists, contributes to the financial
sustainability of visual artists, motivates artists to produce more
artistic works, and enhances an artist's reputation thereby generating
more primary and secondary sales. Some comments stated that the
existence of a resale royalty would not incentivize artists to create
and that the royalty only would benefit a very few artists who are
already professionally and financially successful.
The Office is interested in learning more about the effect of a
federal resale royalty on the primary art market and whether it is an
incentive for artists to create new work. Additionally, the Office
would like further information on whether the payment of a resale
royalty to artists' heirs foster creativity and, if so, how.
4. First Sale and the Free Alienability of Property. Some
commenters suggested that a resale royalty is incompatible with the
first sale doctrine set forth in 17 U.S.C. 109. These commenters argued
that a resale royalty provides an ongoing property right each time an
artwork is sold (subsequent to its initial sale), prevents buyers from
acquiring unencumbered title to a work of art, and adds a layer of
complexity to secondary transactions. Other commenters argued that a
resale royalty does not conflict with the ability to freely transfer
property because the royalty simply would require payment when a
subsequent sale has been made and does not otherwise restrict the
transfer or sale of a particular work of art.
In light of these comments, the Office has the following questions:
To what extent, if any, are the first sale doctrine and a resale
royalty right incompatible? Would a resale royalty have a detrimental
effect on the initial sale of the artwork? Should the right to claim
royalties on secondary sales be waivable and, if so, what effect would
that have on initial sales of artwork?
5. Visual Artists and Sales of Works. Many commenters suggested
that visual artists are at a great disadvantage in relation to creators
of other copyrighted works because visual artists are not paid for the
subsequent resale of their original works and do not enjoy a benefit
proportional to the success of their work. Thus, these commenters
cautioned that without a resale royalty, visual artists are excluded
from the most significant profits that their works may generate
following its creation.
Commenters opposing a resale royalty noted that copyright law does
not assure that each type of work will generate
[[Page 19328]]
similar levels of remuneration and it is not the role of copyright law
to elevate one type of work over another. These commenters further
claimed that any perceived inequities in the amount of remuneration for
a particular category of work exists because of the characteristics of
that type of work and the attendant methods of exploitation for those
works.
Thus, the Office is interested in whether there is such an inequity
and, if so, to what extent, if any, a resale royalty will affect it.
6. The Equity for Visual Artists Act. The Office received twenty-
five comments that either cited to the Equality for Visual Artists Act
(``EVAA'') \5\ or commented directly on the proposed legislation. The
Office is interested in hearing more about what provisions should or
should not appear in any resale royalty legislation and, more
specifically, views on the following EVAA provisions:
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\5\ H.R. 3688, 112th Cong. (2011); S. 2000, 112th Cong. (2011).
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a. Transaction Types. The current version of the EVAA applies only
to live auction sales when the auction house meets certain eligibility
requirements. Many comments noted that a resale royalty limited to
certain live auction sales would not represent the majority of
secondary art sales and would therefore fail to benefit a significant
number of artists. Other commenters noted that, due to the high volume
of transactions, it would simply be impractical to apply the right to
additional types of sales such as online auctions, private sales, or
gallery sales. The Office would like more information on the proper
universe of sales to which the resale royalty should be applied.
b. Scope. A few comments noted that some art buyers view art as
more than paintings, sculptures, or photographs and therefore any
definition of art for the purposes of establishing a resale right
should be broader than that in the EVAA. The Office thus would like
further input regarding what types of artwork should or should not be
included in any potential legislation.
c. Collection and Distribution of Royalties. Commenters stated
that, generally, either a government agency or a designated collection
society administers the resale royalty in most jurisdictions that have
such a royalty law. These government agencies or collection societies
identify qualifying sales, collect funds, deduct an administrative fee,
and redistribute the monies to the artists. The collecting society
scheme proposed in the EVAA would be different because the collecting
society would not only collect the royalty and redistribute it to the
artists, but it would also use royalty monies to fund an escrow account
from which it would distribute grants to museums to purchase more art.
The Office would appreciate more information on the pros and cons of
such a structure.
d. Duration. Many commenters favor keeping the term of the resale
royalty right consistent with the term of copyright because such a term
could easily be tracked and calculated and also allows for the royalty
payments to an artist's heirs. The Office would like to learn more
about how to calculate a justifiable term for a resale royalty right.
e. Threshold Value. The EVAA establishes that a resale royalty
would only be paid on artwork sales of $10,000 or more. Some comments
noted that a $10,000 threshold amount would exclude many types of
works, e.g., photographs and prints, but also many artists whose work
is resold in the secondary market for less than $10,000. Other comments
suggested that too low of a threshold would result in a situation where
the cost of administrating some royalty payments would be higher than
the cost of administering the payments. The Office is thus interested
in learning more about whether there should be a minimum threshold
before a resale royalty is owed and, if so, what that threshold should
be.
f. Payment. Based on a review of the comments, determining which
entity should be responsible for payment of the royalty following the
resale of a work is somewhat controversial. Jurisdictions that have a
resale royalty differ on which party is responsible for paying the
royalty. The EVAA provides that the party responsible for remitting the
royalty to the collecting society would be the party responsible for
receiving the ``money or other consideration'' from the sale. The
Office would like further information on which party should be
responsible for paying any resale royalty to the author.
g. Royalty Rate. Some comments noted that the EVAA's proposed 7%
royalty would be one of the highest rates in the world. Many of the
comments suggested a 5% royalty with or without a limit on total
remuneration as the most consistent with worldwide practice. The Office
would like more information on what a reasonable royalty rate could be
and how to determine what is reasonable.
7. Effect on Museums. Under the EVAA, museums are eligible to
receive grants for purchasing art based on a portion of the resale
royalty paid to the author. One comment noted that the EVAA may
inadvertently undermine the ways in which museums acquire and
deacession works as well as limit museums' access to certain pricing
information related to works or art. The Office is interested in
learning more about the impact of these grants on museums' purchasing
behavior.
8. Constitutional Concerns. Two companies submitted comments
highlighting constitutional concerns over federal resale royalties. The
Office is interested in hearing from parties wishing to elaborate on
the arguments summarized below.
a. Retroactivity and Due Process. One comment expressed concerns
that if a resale royalty would apply retroactively to purchases already
concluded it would benefit artists at the expense of buyers and
collectors that already purchased the artwork without the requirement
to pay a royalty on the secondary sale. In addition, the comment stated
that while application of a royalty to new works may be permissible
under the Copyright Clause of the U.S. Constitution, its retroactive
application raises due process concerns. Thus, the Office would like to
hear more regarding whether retroactive legislation would be barred by
the Due Process Clause of the U.S. Constitution.
b. Takings. One comment noted that applying a resale royalty to
pre-existing works may implicate the Takings Clause of the U.S.
Constitution through a limitation on the free alienation of property
and the transfer of the royalty payment from one individual to another.
The Office would like to learn more about whether pre-existing works
would implicate the Takings Clause.
c. Prohibition Against Bills of Attainder. One comment noted that a
federal resale royalty law such as the proposed EVAA may raise issues
under the constitutional prohibition on bills of attainder because it
specifies particular types of auctioneers that must pay the royalty.
For example, the EVAA proposes that the royalty shall apply if the sale
takes place in a public auction house that has annual sales in the
previous year of over $25 million--excluding online and private sales.
The Office is thus interested in more information on the relationship
between the EVAA's limitations and the constitutional prohibition on
bills of attainder.
Requests To Participate
Requests to participate should be submitted online at https://www.copyright.gov/docs/resaleroyalty/. The requestor should also
indicate, in order of preference, the sessions in
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which the requestor wishes to participate. Depending upon the level of
interest, the Copyright Office may not be able to seat every
participant in every session he or she requests, so it is helpful to
know which topics are most important to each participant. In addition,
please note that while an organization may bring multiple
representatives, only one person per organization may participate in a
particular session. A different person from the same organization may,
of course, participate in another session. Requestors who already have
submitted a comment in response to the Office's September 19, 2012
Notice of Inquiry, or who will be representing an organization that has
submitted a comment, are asked to identify their comments on the
request form. Requestors who have not submitted comments should include
a brief summary of their views on the topics they wish to discuss
directly on the request form. Nonparticipants who wish to attend and
observe the discussion should note that seating is limited and, for
nonparticipants, will be available on a first come, first served basis.
Dated: March 25, 2013.
Karyn A. Temple-Claggett,
Associate Register of Copyrights and Director of Policy and
International Affairs.
[FR Doc. 2013-07270 Filed 3-28-13; 8:45 am]
BILLING CODE 1410-30-P
