13.16 This section canvasses the different models that can be implemented to facilitate the use of orphan works. The central aim of each model is to facilitate the use of orphan works, while ensuring that owners are adequately compensated when they are identified.
Limitations on remedies after reasonably diligent search
13.17 In 2006, the US Copyright Office’s Orphan Works Report recommended that remedies be limited in cases of infringement involving orphan works. Limitation on remedies would apply where the user had conducted a ‘reasonably diligent search’ for the copyright owner, and had provided attribution where possible.
13.18 The Copyright Office did not seek to define what ought to be a ‘reasonably diligent search’. Rather, it acknowledged that the search standard was ‘very general’ and favoured ‘the development of guidelines’ by users and stakeholders. It was argued that a truly ‘ad hoc’ system—where users simply conduct a reasonable search and then commence use, without formality—is most efficient. However, it highlighted a number of factors that could guide users on a case-by-case basis.
13.19 The Copyright Office recommended that remedies be limited in certain circumstances. Where use of the work is commercial, the liability for infringement is limited to ‘reasonable compensation’, rather than statutory damages. In most cases, reasonable compensation would be the amount a user would have paid to the copyright owner had they engaged in negotiations before the infringing use commenced. No relief would be available for non-commercial uses of orphan works, provided that the user ceased using the work expeditiously upon receiving an infringement notice. Future uses of the work would be the subject of negotiations between the parties.
13.20 The Copyright Office also proposed limiting the scope of injunctive relief in two ways. First, where a user has made a derivative use of an orphan work that also includes ‘substantial expression’ of the user—such as incorporating it into another work—a court would not restrain its use. Rather, the user is to pay ‘reasonable compensation’ for use of the orphan work, and is required to adequately attribute the work. If a work is used without transforming the content, a full injunction is still available, but a court would take into account and accommodate the interest of the user that might be harmed by an injunction.
13.21 The Copyright Office emphasised that an orphan works solution should not act as a replacement or substitute for fair use:
The user of an orphan work should consider whether her use might fall within fair use, or curtailing her use in a way to have it more clearly fall within the exemption, in addition to or in lieu of reliance on any orphan works provision.
13.22 Part of the reasoning for a legislative solution was that many stakeholders to that inquiry expressed a view that the ‘uncertain nature of fair use and the idea/expression dichotomy’ contributes to a user’s hesitation in using orphan works, even in cases that seem to ‘fall squarely within classic fair use situations’.
13.23 Despite a number of Bills before Congress to implement the Copyright Office’s proposals, these were not passed. The drafters of the Bills grappled with particular issues, including: recognising and accounting for the concerns of photographers; the contours of a ‘reasonably diligent search’; and the role of searchable electronic databases.
13.24 In late 2012, the Copyright Office launched a further inquiry into orphan works, seeking to identify the ‘current state of play for orphan works’ and ‘what has changed in the legal and business environments in the last few years that might be relevant to a resolution of the problem and what additional legislative, regulatory, or voluntary solutions deserve deliberation’. Submissions to date have emphasised that a ‘reasonably diligent search’ is necessary before any use of an orphan work. Many stakeholders called for the establishment of a copyright register to help identify owners of orphan works.
Limited exceptions for uses of orphan works
13.25 In October 2012, the European Union adopted its Directive on Certain Permitted Uses of Orphan Works. Member states are required to implement the Directive in national legislation by 29 October 2014. The Directive allows publicly accessible cultural institutions to reproduce and communicate orphan works in furtherance of their public interest mission. The Directive only applies in respect of certain types of work held by institutions: text; audiovisual and cinematographic works; and phonograms first published or broadcast within an EU member state. Photographs are only covered to the extent that they are incorporated into other works.
13.26 Orphan works can only be used after the institution conducts a ‘diligent search’ in good faith. The Directive leaves discretion for member states to determine the sources that are appropriate to include in diligent search criteria for each category of work. It also leaves open the possibility of allowing external organisations to conduct a diligent search for a fee.
13.27 Importantly, the Directive establishes a central EU orphan works register and requires reciprocal recognition of orphan work status across member states. Results of a diligent search are recorded and provided to a competent national authority and made available on a publicly accessible online database to be established and managed by the European Commission’s Office for Harmonization in the Internal Market.
13.28 The Directive provides that rights holders should, at any time, be able to put an end to the orphan work status insofar as their rights are concerned. Fair compensation is then due to the rights holder, but the member states retain the discretion to determine the circumstances under which compensation may be organised.
Centrally granted licences
13.29 A number of jurisdictions have opted to facilitate the use of orphan works through a centralised body with the ability to license uses of orphan works.
13.30 Since 1998, users in Canada may apply to the Copyright Board of Canada for a non-exclusive licence to use an orphan work, after ‘reasonable efforts’ have been made to locate the copyright owner. Licences are only available for orphan works that are published or fixed.
13.31 The Board works closely with the Canadian Copyright Licensing Agency (CCLA) in setting the royalty fee and the terms and conditions of the licence. Royalties collected are held in a fund for five years after the expiration of the licence for collection by the copyright owner. If the royalty is not collected, the Board will allow the CCLA to dispose of the fee to its members as it sees fit. Since it was enacted in 1998, the Board has opened 411 files relating to a total of 12,640 orphan works. Similar systems are in place in Japan, South Korea, and India.
13.32 Centralised licensing is also being pursued in the United Kingdom, where a centralised body will be established to license individual uses, whether commercial or non-commercial, of orphan works subject to a diligent search.
13.33 The independent body will maintain a registry of orphan works, set and levy fees, ensure that diligent searches are undertaken and approve individual cases. It will not validate individual diligent searches. Rather, it would regularly test the quality of searching and the methods through a sampling approach. The estimated cost of setting up such a scheme in the UK is said to be between £2.5m and £10.5m.
13.34 The UK Intellectual Property Office argued that the scheme:
should enable the use of orphan works; reduce legal uncertainty for users of orphan works; ensure that rights holders can see what content is being used; and give returning rights holders easy access to any fees that have been paid.
Extended collective licensing
13.35 Several Nordic countries use extended collective licensing (ECL) schemes that allow users to pay licence fees to a collecting society comprising a ‘substantial number’ of rights holders of a certain type of works. A feature of ECL schemes is that the collecting societies are authorised by statute to grant licences on behalf of the copyright owner, even where the owner is not a member of the collective. Some rules allow copyright owners to opt out of the system and instead deal directly with licensees.
13.36 Under ECL schemes, a licence is granted for specific purposes and gives users a degree of certainty that their use will not risk infringement. However, to the extent that some owners have opted out, the system does not provide complete certainty to prospective users.
13.37 Reforms in the UK will also provide for voluntary ECL to deal with mass digitisation. This will allow an appointed authorised licensing body, for certain classes of materials, to grant copyright licences to bodies who do not own the copyright material they wish to use. The regulations will provide an opt out provision for the copyright owner.
United States Copyright Office, Report on Orphan Works (2006), 92.
Ibid, 99–108. Such factors may include: the amount of identifying information on the copy of the work; whether the work has been made available to the public; the age of work; whether information can be found on publicly available records; whether the author is still alive; and whether the use of the orphan work is commercial or non-commercial.
In cases of infringement, US courts may award statutory damages ranging from $750 to $30,000 in respect of any one work: Copyright Act 1976 (US) § 504(c)(1).
United States Copyright Office, Report on Orphan Works (2006), 116. It was suggested that the onus is on the owner to demonstrate that the work had a fair ‘market value’. The term ‘reasonable’ imports the notion that some uses may attract a zero or low royalty payment.
The term ‘substantial expression’ is intended to exclude situations where the work is simply put into a collection of other works, like an electronic database: Ibid, 120.
United States Copyright Office, Report on Orphan Works (2006), 120.
These included: Orphan Works Act of 2006 HR 5439, 109th Cong; Orphan Works Act of 2008 HR 5589, 110th Cong; and Shawn-Bentley Orphan Works Act of 2008 S 2193.
For example, the Orphan Works Act of 2006 HR 5439, 109th Cong would have required users to document their search, and proposed that that the Copyright Office set out authoritative information on search tools. See, B Yeh, CRS Report for Congress: ‘Orphan Works in Copyright Law’ (2008).
Federal Register 6455 Vol 77, No 204 (Monday October 22).
Directive 2012/28 of the European Parliament and of the Council of 25 October 2012 on Certain Permitted Uses of Orphan Works, art 1(1). These public institutions include libraries, educational establishments and museums, archives, film and audio heritage institutions, and public service broadcasting institutions. Public interest missions include the preservation of, the restoration of, and the provision of cultural and educational access to, works and phonograms contained in their collections: art 6(2).
Ibid art 1(2) and (3).
Ibid art 1(4).
Ibid art 3(1).
Ibid art 3(2).
Ibid art 3(1) and recital 13.
Ibid art 4.
Ibid art 3(6).
Ibid art 5.
Ibid art 6(5).
Copyright Act 1985 (Can) s 77; Copyright Act 1970 (Japan) art 67; Copyright Act 1967 (South Korea) art 50.
Copyright Act 1985 (Can), s77.
Ibid. The Copyright Act 1985 (Can)requires that orphan works and sound recordings be ‘published’ and performances and communication signals to be ‘fixed’.
Copyright Act 1985 (Can) s 77(2).
Ibid s 77(3).
See J de Beer and M Bouchard, Canada’s ‘Orphan Works’ Regime: Unlocatable Copyright Owners and the Copyright Board (2009), 31–32.
SeeCopyright Act 1970 (Japan) s 67; Copyright Act 1967 (South Korea) s 47; Copyright Act 1957 (India) s 31(A).
UK Government, Government Policy Statement: Consultation on Modernising Copyright (2012), 8. See Enterprise and Regulatory Reform Act 2013 (UK) pt 6. A new s 116A will be inserted into the Copyright, Designs and Patents Act 1988 (UK) that allows the Secretary to approve an independent body to license orphan works.
Intellectual Property Office, Orphan Works Impact Statement: BIS 1063 (2012).
Ibid, 6. Equivalent to $3.9m–$16.3m (at 21 May 2013).
See J Axhamn and L Guibault, Cross-border Extended Collective Licensing: A Solution to Online Dissemination of Europe’s Cultural Heritage? (2011), prepared for EuropeanaConnect, 25–59 for an outline of extended collective licensing in Nordic Countries.
For example, The Consolidated Act on Copyright 2010 (Denmark) ss 51(i)–(iii) prescribes that remuneration under an ECL extends to unrepresented right holders who are: not members of the collective; foreign rights holders; and dead authors.
For example, The Consolidated Act on Copyright 2010 (Denmark) ss 24A, 30, 30A, 35, 50.
See Ch 12.