Orphan works

149. This section considers the problem of ‘orphan works’, broadly defined as a situation where ‘the owner of a copyrighted work cannot be identified and located by someone who wishes to make use of the work in a manner that requires permission of the copyright owner’.^[166] Use of a work, without the copyright owner’s permission may constitute copyright infringement.^[167]

150. Individuals and institutions who wish to use, and make access available to, orphan works assume significant risks. The problem of being unable to identify the author of a work applies equally in the case of older works—in analog forms—and digital works that are created online, and often anonymously. In particular, orphan works present a recognised problem in mass digitisation projects undertaken by public and cultural institutions.^[168]

Scope of the orphan works problem

151. Despite widespread acknowledgement that orphan works create significant copyright problems, there is a lack of comprehensive empirical evidence about the economic and social effects of orphan works, or the extent to which the inability to access such works impedes creative efforts. However, studies around the world point to a growing problem, at least in terms of the number of orphan works.

152. The Hargreaves Report suggested that orphan works represent ‘the starkest failure of the copyright system to adapt’ and that the system is ‘locking away millions of works’ in this category.^[169] In France, the Association des Cinémathèques Européennes suggests that 21% (225,000) works in the European film archives are presumed to be orphan works.^[170] In Australia, the National Film and Sound Archives estimates that about 20% of the national audio-visual collection is abandoned or orphaned.^[171]

153. The ALRC invites stakeholder comments about the extent of the orphan works problem in Australia, and how the treatment of orphan works in Australia affects the use, access to and dissemination of copyright works.

Existing models and options for reform

154. There are existing models in Canada and the Nordic countries that specifically address orphan works. Growing awareness of the orphan works issue has led to proposals for reform in the UK, the US, the EU,^[172] and in Australia.

155. These models and proposals recognise that orphan works—especially those held in archives, libraries and public institutions—have significant cultural, academic and social significance. Access to these works is an important public interest benefit that must be balanced with ensuring that copyright owners are properly compensated for their work. ^[173]

Centrally-granted licences

156. Since 1998, users in Canada can petition 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.^[174] The orphan work must be one that is published or fixed.^[175]

157. The Board works closely with the Canadian Copyright Licensing Agency (CCLA) in setting the royalty fee and the terms and conditions of the licence.^[176] Royalties collected are held in a fund for five years after the expiration of the licence for collection by the copyright owner.^[177] If the royalty is not collected, the Board will allow the CCLA to dispose of the fee to its members as it sees fit.^[178]

158. Since it was enacted in 1998, the Board has opened 411 files relating to a total of 12,640 orphan works.^[179] Similar systems are in place in Japan, South Korea, and India.^[180]

Limiting remedies after diligent search

159. In 2006, the US Copyright Office recommended the enactment of legislation that would limit the monetary and injunctive relief available to an owner where a user of an orphan work has conducted a reasonably diligent search.^[181] Under the proposal, ‘reasonable compensation’ from the user would be available where the use of the work is commercial.^[182] Injunctive relief would be limited where the work is transformative, and the user pays ‘reasonable compensation’ for its use.^[183]

160. In the UK, the Hargreaves Report recommended that the government should legislate to enable clearance procedures for use of individual works, based upon a diligent search.^[184]

161. In response, the UK government announced that it would introduce legislation to enable the use of orphan works after a diligent search confirmed by an independent authorising body.^[185] Under the model proposed, commercial and non-commercial uses would be permitted via a non-exclusive licence. A user would be required to pay, in advance, a market price—to the extent that one can be established—for such use and it is assumed that moral rights have not been waived.^[186] Importantly, the proposed scheme would not take the form of an exception; rather it would be based on authorisation by an independent body.

Extended collective licensing

162. Several Nordic countries use extended collective licensing (ECL) schemes that allow users to pay licence fees to a collection society comprising a ‘substantial number’ of rights holders of a certain type of works.^[187] A feature of ECL schemes is that the collection 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.^[188] Some rules allow copyright owners the option to ‘opt-out’ of the system and instead deal directly with licensees.^[189]

163. 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.

Australian reform proposals

164. Australian copyright academics Professor David Brennan and Professor Michael Fraser have proposed a ‘non-commercial use exception for natural persons using unpublished subject matter derived from lawfully obtained material’.^[190] The proposed exception would apply where the relevant copyright owner is not able to be located after a ‘diligent search’.^[191] A similar suggestion has been proposed by the Copyright Council Expert’s Group.^[192]

165. Brennan and Fraser also propose a broader exception for published material where there are missing owners. The proposed exception involves three stages:

• A ‘diligent search’ followed by lodgment of a notice to a declared collection society. Once accepted, the work would be placed on an orphan works register. If an owner comes forward within three months, no exception would apply in favour of the user.

• If the copyright owner does not present within three months, but supplies a warranty of ownership to the collection society within three years thereafter, the remedies available to the owner are limited in the event that an action is brought against the user.

• If the copyright owner does not supply a warranty to the collection society within the three years, the owner’s sole enforcement rights would be through a compulsory licence administered by the collection society.^[193]

166. The proposed exception seeks to balance user accountability, predictive certainty for users and fairness to rights holders.^[194]

167. The ALRC invites comment on whether the Copyright Act should be amended to create a new exception or to facilitate a collective licensing scheme for the use of orphan works.