Resale Royalty Right; Public Hearing, 19326-19329 [2013-07270]

Download as PDF 19326 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] BILLING CODE 4510–29–P LEGAL SERVICES CORPORATION Notice of Funding Availability for Calendar Year 2014 Competitive Grant Funds Request for Proposals: 2014 Competitive Grant Funds Legal Services Corporation. Notice. AGENCY: ACTION: The Legal Services Corporation (LSC) is the national organization charged with administering Federal funds provided for civil legal services to low-income people. This Request for Proposals (RFP) announces the availability of competitive grant funds and is soliciting grant proposals from interested parties who are qualified to provide effective, efficient and high quality civil legal services to eligible clients in the service area(s) of the states and territories identified below. The exact amount of congressionally appropriated funds and the date, terms, and conditions of their availability for calendar year 2014 have not been determined. DATES: This RFP is available the week of April 8, 2013. Legal Services Corporation must receive all applicants’ Notice of Intent to Compete (NIC) on or before May 10, 2013, 5:00 p.m., E.T. Other key application and filing dates, including the dates for filing grant applications, are published at www.grants.lsc.gov/resources/notices. ADDRESSES: Legal Services Corporation: Competitive Grants, located at 3333 K Street NW., Third Floor, Washington, DC, 20007–3522. FOR FURTHER INFORMATION CONTACT: The Office of Program Performance by email at competition@lsc.gov, or visit the grants competition Web site at www.grants.lsc.gov. SUPPLEMENTARY INFORMATION: LSC will accept proposals from any of the following entities: (1) Non-profit organizations that have as a purpose the provision of legal assistance to eligible clients; (2) private attorneys; (3) groups of private attorneys or law firms; (4) state or local governments; or (5) substate regional planning and coordination agencies that are composed of sub-state areas and whose governing boards are controlled by locally elected officials. The RFP, containing the NIC and grant application, guidelines, proposal content requirements, service area descriptions, and specific selection criteria, will be available at www.grants.lsc.gov the week of April 8, 2013. Below are the service areas for which LSC is requesting grant proposals. Service area descriptions will be available at www.grants.lsc.gov/aboutgrants/where-we-fund. LSC will post all updates and/or changes to this notice at www.grants.lsc.gov. Interested parties are asked to visit www.grants.lsc.gov regularly for updates on the LSC competitive grants process. State or Territory Service Area(s) Alabama ................................ American Samoa ................... Arizona .................................. MAL. AS–1. AZ–2, AZ–3, AZ–5, MAZ, NAZ–5, NAZ–6. AR–6, AR–7, MAR. CA–1, CA–27, CA–28, NCA–1. CT–1. MDE. DC–1. IL–3, IL–7. KY–10, KY–2, KY–5, KY– 9, MKY. LA–1, LA–12, MLA. MD–1, MMD. MA–10, MA– 11. MI–12, MI–13, MI–15, MI– 9, MMI, NMI–1. MN–1, MN–4, MN–5, MN– 6, MMN. MS–10, MS– 9, MMS, NMS–1. MO–3, MO–4, MO–5, MO– 7, MMO. NH–1. NM–1, NM–5, MNM, NNM–2, NNM–4. NY–9. mstockstill on DSK4VPTVN1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 17:34 Mar 28, 2013 Jkt 229001 Arkansas ............................... California ............................... Connecticut ........................... Delaware ............................... District of Columbia ............... Illinois .................................... Kentucky ................................ Louisiana ............................... Maryland ................................ Massachusetts ...................... Michigan ................................ Minnesota .............................. Mississippi ............................. Missouri ................................. New Hampshire ..................... New Mexico ........................... New York ............................... PO 00000 Frm 00148 Fmt 4703 Sfmt 4703 State or Territory Service Area(s) North Dakota ......................... ND–3, MND, NND–3. OH–18, OH– 20, OH–21, OH–23, 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, VA–20, MVA. WV–5. WI–5, MWI. WY–4, NWY– 1. Ohio ....................................... Oklahoma .............................. Pennsylvania ......................... Puerto Rico ........................... South Dakota ........................ Tennessee ............................. Texas ..................................... Vermont ................................. Virginia .................................. West Virginia ......................... Wisconsin .............................. Wyoming ............................... 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 http://www.copyright.gov/fedreg/2012/ 77fr58175.pdf. E:\FR\FM\29MRN1.SGM 29MRN1 Federal Register / Vol. 78, No. 61 / Friday, March 29, 2013 / Notices Web site at http://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: mstockstill on DSK4VPTVN1PROD with NOTICES 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 http://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 http:// www.copyright.gov/history/droit_de_suite.pdf. VerDate Mar<15>2010 17:34 Mar 28, 2013 Jkt 229001 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. PO 00000 Frm 00149 Fmt 4703 Sfmt 4703 19327 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 E:\FR\FM\29MRN1.SGM 29MRN1 mstockstill on DSK4VPTVN1PROD with NOTICES 19328 Federal Register / Vol. 78, No. 61 / Friday, March 29, 2013 / Notices 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). VerDate Mar<15>2010 17:34 Mar 28, 2013 Jkt 229001 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 PO 00000 Frm 00150 Fmt 4703 Sfmt 4703 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 http:// www.copyright.gov/docs/resaleroyalty/. The requestor should also indicate, in order of preference, the sessions in E:\FR\FM\29MRN1.SGM 29MRN1 Federal Register / Vol. 78, No. 61 / Friday, March 29, 2013 / Notices 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 mstockstill on DSK4VPTVN1PROD with NOTICES 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 VerDate Mar<15>2010 17:34 Mar 28, 2013 Jkt 229001 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. PO 00000 Frm 00151 Fmt 4703 Sfmt 4703 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 E:\FR\FM\29MRN1.SGM 29MRN1

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.

-----------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \1\ 77 FR 58175 (Sept. 19, 2012), available at http://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 http://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.

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 http://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 http://www.copyright.gov/history/droit_de_suite.pdf.
---------------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \3\ 1992 Report at 149.
    \4\ Id.
---------------------------------------------------------------------------

    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 http://www.copyright.gov/docs/resaleroyalty/. The requestor should also 
indicate, in order of preference, the sessions in

[[Page 19329]]

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