In many jurisdictions, orphan works have been in a state of limbo in which it is not possible to obtain permission to legally use them, nor to work out whether copyright may in fact have expired. Those who may wish to use orphan works are, for this reason, usually left to adopt a 'risk management' approach of weighing up the benefit of using the works against the risk of a potential infringement action.
In the UK, the treatment of orphan works was in 2011 labelled by the Hargreaves Report, Digital Opportunity: A Review of Intellectual Property and Growth (2011) as 'the starkest failure of the copyright system to adapt'. Following the Hargreaves Report, on 25 April this year the UK enacted the Enterprise and Regulatory Reform Act 2013 (ERR Act) which among its many purposes (including provisions about employment law and competition law) inserts new provisions into the Copyright, Designs and Patents Act 1988 (UK) (CDP Act) that aim to establish a statutory licensing scheme for orphan copyright works and an extended collective licensing scheme. The ERR Act amendments are the UK's response to EU Directive 2012/28/EU, on certain permitted uses of orphan works.
In Australia, the issue is part of the ALRC's current inquiry into Copyright and the Digital Economy. The US has previously looked at amending its laws in relation to orphan works, and the US Copyright Office states it is currently 'reviewing the problem of orphan works under US copyright law in continuation of its previous work on the subject'.
As the US Copyright Office has stated, 'for good faith users, orphan works are a frustration, a liability risk, and a major cause of gridlock in the digital marketplace'. The issue is contentious, however, with some rights holders viewing amendments that lead to a relaxation of the laws relating to use orphan works as a threat to their exclusive rights.
The UK amendments
Part 6 of the ERR Act, which inserts new sections 116A-116D into the UK's CDP Act, sets out matters the Secretary of State can create regulations for in relation to copyright works. Under the new provisions, a copyright work can be deemed 'orphan' if the rights holder(s) cannot be found after a diligent search.
New section 116A of the CDP Act gives the UK Secretary of State power to create regulations to appoint one or more independent bodies to grant licences authorising acts in respect of orphan works which would otherwise constitute copyright infringement. The scheme will, in effect, allow statutory licences to be granted to authorise conduct (including commercial exploitation of the works) that previously only the copyright owner could authorise. The Explanatory Notes to the ERR Bill clarify that new regulations created under section 116A must also protect the economic and moral rights of the rights holders in the orphan works, and this is to be achieved by the payment of royalties which will be held for a prescribed period of time in case the rights holder(s) come forward.
New section 116B of the CDP Act allows the Secretary of State to establish an extended collective licensing scheme in respect of copyright material, to enable collecting societies to grant licences to the works of both members and non-members, for both commercial and non-commercial uses. Such extended collective licensing will be limited in the sense that it will only be available to collecting societies that can prove they already represent a significant number of affected rights holders and have the support of their members to conduct collective licensing. Importantly, this means that industries such as the photography industry (which currently does not rely on collecting societies), are unlikely to be affected. Collecting societies would also be subject to a prescribed code of practice and rights holders will have the right to opt out of collective licensing. Royalties would also be collected. Despite these limitations, this new collective licensing scheme provides less protection to rights holders than the current UK system of collective licensing under which rights holders must opt in (by becoming a member of the collecting society) before a collecting society can licence on their behalf.
Both new sections 116A and 116B create a licensing scheme rather than an exception to copyright infringement, and neither allows the granting of licences that give exclusive rights. Separately, Part 2 of Schedule 22 to the ERR Act contains provisions that essentially mirror the new sections 116A-116D, applying to the specific case of orphan performers' rights. The Act also amends section 170 of the CDP Act to allow the Secretary of State to reduce the duration of copyright in existing works which are unpublished, pseudonymous or anonymous, the intention being to reduce the number of works that become orphaned.
EU context
The UK's ERR Act should be viewed in the context of EU Directive 2012/28/EU, on certain permitted uses of orphan works.
This Directive, released on 25 October 2012, is a statement of broad goals that EU Member States must seek to achieve by 29 October 2014 through their own domestic laws. While labelling copyright the 'economic foundation for the creative industry', the Directive only aims to facilitate the licensing of orphan works to publicly accessible libraries, educational establishments, museums, archives, film or audio heritage institutions and public service broadcasting organisations, for public interest missions. Licensees are entitled to profit from their use of orphan works only to the extent needed to achieve public interest aims. The Directive as such promotes a less commercial and more public interest focussed solution than the ERR Act. This is the biggest difference between the two solutions (and also, perhaps, the source of much of the criticism directed at the ERR Act provisions).
The model outlined in the Directive is also subject to several limitations, including that a diligent search for the rights holder(s) be carried out in good faith before a work or phonogram can be considered orphan. As set out above, this limitation has been adopted by the UK in the ERR Act. The UK has also implemented a version of the Directive's proposal that rights holders who come forward be permitted to end the orphan work status of their works, and receive fair compensation for the use that has been made of their works.
The Directive suggests that a diligent search should be carried out in the Member State where the work or phonogram was first published or broadcast, and that Member States should ensure that organisations carrying out diligent searches keep records of those searches and collect and make available the results to the public at large, particularly by recording the information in an online database. The Directive also recommends the creation of a single online database for the EU. Importantly, under the Directive once a work is declared orphan in one Member State, it will have orphan status in all Member States.
Australian approach
Australian copyright law does not currently contain an exception to copyright infringement, or a licensing scheme, in relation to orphan works, although orphan works may in some circumstances be used under a fair dealing exception or pursuant to certain statutory licences (such as the licences for copying and communicating materials for education). The issue of orphan works is also currently under consideration by the ALRC as part of its inquiry into Copyright and the Digital Economy (ALRC inquiry), which examines whether the Copyright Act 1968 (Cth) (Copyright Act) should be amended to adapt to the digital environment.
Among the proposals for reform set out in the Discussion Paper for the ALRC inquiry, released on 5 June 2013, is a new system for the treatment of orphan copyright works that has some similarities with the UK's ERR Act. The amendments to the Copyright Act proposed by the Discussion Paper to address the orphan works issue include limiting the remedies available for infringing use of an orphan work where a 'reasonably diligent' search for the rights holder was conducted. Importantly, the Discussion Paper specifically states that the Copyright Act should not define 'reasonably diligent search' (on the basis that what is considered reasonably diligent may change over time), and should instead set out a number of factors to be considered in determining whether a reasonably diligent search was carried out.
The ALRC also suggests the creation of an orphan works register and recommends that those who use orphan works attribute the work to the author, so far as this is possible. In addition, the Discussion Paper proposes amending Chapter 11 of the Copyright Act to allow for extended collective licensing in the case of mass digitisation projects (including orphan works). Among the aims of these reforms are increasing the quantities and types of orphan works available for use, ensuring rights holders are adequately compensated and promoting efficiency.
Public submissions on the Discussion Paper closed on 31 July, and the final report for the ALRC inquiry is due to be provided to the Attorney-General by 30 November 2013. It therefore remains to be seen which, if any, of the amendments to the Copyright Act proposed in the ALRC Discussion Paper will be adopted.
International approaches
There are international precedents for the orphan works model adopted by the UK under the ERR Act. Canada has had a system in place since the 1990s under which copyright users can apply to the Copyright Board of Canada for a non-exclusive licence to an orphan work if the copyright owner is not found after 'reasonable efforts', provided that the orphan work in question is published or fixed. The Copyright Board and the Canadian Copyright Licensing Agency work together to decide on royalty fees and other terms and conditions attached to the licence. Royalties that are collected under the scheme are held for a period of five years, and if the royalty is not collected in this time the Canadian Copyright Licensing Agency can distribute the fee among its members.
Extended collective licensing schemes that allow users to pay licence fees to a collecting society whose members constitute a substantial number of rights holders for types of work have also existed for a long time in some Nordic countries.
The issue has been considered multiple times in the US. In 2006, the US Copyright Office released the Orphan Works Report, which concluded that the problem of orphan works was 'pervasive'. The report, which suggested limiting the monetary and injunctive relief available to owners of orphan works if the person who used the work had conducted a reasonably diligent search to find them, failed to lead to any legislative change. The US proposed legislation in 2008, which failed again to be adopted. A further inquiry was launched by the US Copyright Office in 2012 and is currently underway, with the Copyright Office stating on its website that it 'has long shared the concern with many in the copyright community that the uncertainty surrounding the ownership status of orphan works does not serve the objectives of the copyright system'. This most recent review is also to be seen in the content of recent high-profile litigation in the US involving orphan works, particularly in the case of recent mass digitisation projects (such as Google Books Library Project).
Backlash to the ERR Act
There has been a significant negative reaction to Part 6 of the ERR Act both in Britain and overseas, particularly from photographers' groups (as photographs are among the easiest works to be de-identified and become orphaned when disseminated via the internet). This particular concern was also raised when the US considered the issue of orphan works in 2006, with the Copyright Office noting that a significant percentage of the problem related to orphan photographs, which often do not have, or can easily become divorced from, identifying information. Some US writers and photographers have also expressed anger at the new UK laws, arguing that they could lead to material which does not originate in the UK being licensed without the rights holders' permission if it is given orphan status under UK law. Although royalties will be collected, there is a concern that they will be below what rights holders would charge and may devalue works.
Concern has also been expressed that section 116A could mean amateur photographers and members of the public generally will find their works being licensed and used without their consent. This has been compared by some to the controversial changes that social media platform Instagram tried to make to its terms of use last year. Even more dramatically, some commentators have warned of a potential exodus of copyright works from the internet.
The reaction has not, however, been entirely negative. The UK-based Consumer Focus organisation, for instance, supports the licensing of orphan works for commercial as well as non-commercial use on the basis that this will allow consumers to have 'meaningful access' to orphaned works (including for commercial uses which also contain an element of public benefit, such as school text books and historic documentaries). Consumer Focus also refers to the Canadian model as an illustration of a similar system that seems to have worked.
Balancing copyright and access in the digital age
As is apparent from the recent attempts in various jurisdictions to regulate the use of orphan works, the ERR Act amendments, and the ALRC's proposed amendments, to the treatment of orphan works are timely. In an age where libraries and other public institutions are widely engaging in digitisation projects, and where works published on the internet can be easily de-identified and distributed, the question of balancing the rights of copyright owners and the public interest in facilitating access to copyright material is pertinent.
Some rights holders clearly do not consider that Part 6 of the ERR Act has achieved the right balance; however the Canadian precedent may provide an indication that the overall effect of the new provisions will not be as adverse as some fear. A similar debate on orphan works will no doubt follow the ALRC's final report in November and any subsequent move to amend Australia's copyright laws.
