UK IPO two reports closer to finding a home for orphan works

The AmeriKat back in the sink after hot water is
restored to her bathroom after several weeks...

A few weeks ago at the IPKat's 10th Anniversary bash, the IPKat disclosed the circumstances in which the AmeriKat and the IPKat came to find each other.  It had all to do with orphan works  - a topic dear to the AmeriKat's heart thanks to the late and great Sir Hugh Laddie.  So this morning, having been cruelly awoken from recovering from a cold by an impromptu appearance from her plumber, she logged in to Twitter to find news of the IPO having today published not one but two papers on copyright and orphan works (for previous Kat posts on orphan works click here).

Both reports arose from the recommendations of the Hargreaves Review which highlighted the problem of orphan works and the significant untapped resource they represent.  In July 2012 the Government issued a statement that it was their intention to allow schemes to be introduced for the commercial and non-commercial use of orphan works and a voluntary extended collective licensing of copyright works (the latter not subject to this post, as the AmeriKat was schooled to dislike them and their introduction into the UK copyright system).

For those that glaze over when the mention of orphan works flickers into their inbox from the IPKat and other sources, or indeed those who find copyright law impenetrable/pointless/uninteresting - the AmeriKat is looking at you, patent lawyers - the problem is as follows.  There are literally millions of copyright works which are still in copyright but whose owner is untraceable.  The question is do you just use the copyright work and cross your fingers that no one sues you or do you take a hardline, risk adverse approach and not use the work?  The latter approach is often taken, especially by public or government funded institutions who cannot knowingly infringe copyright.  Not using the work of course means that any economic value in the subsequent use is lost.  And we love economic value, don't we?

A solution proposed in the US in 2008 by the now defunct Shawn Bentley Bill suggested that after a reasonable search a user could use an orphan work.  If the owner would later come forward a reasonable royalty would be payable.  The AmeriKat admired that solution which she thought was simple and effective.  However, as pointed out by Mr Justice Arnold at a recent UCL IBIL conference, users would still be infringing and that is a no-go for public institutions.

So, in March 2012 the IPO appointed Public and Corporate Economic Consultants (PACEC) to research the potential introduction of an orphan works system in the UK.  This research resulted in the first of the two papers entitled Orphan Works in the UK and Overseas and which, following interviews with representative organizations, compared the proposed orphan works legislation with legislation in other countries (Canada, Denmark, Hungary, India and Japan). The key principles of the proposed orphan works system proposed in the UK are as follows:

• Through these and other appropriate measures, to ensure adequate protection for the interests of absent rights holders.

• Diligent search before something can be used as an orphan work is key to the scheme.

• Commercial and non-commercial uses of orphan works in the UK will both be permitted. 

• This permission should come at an appropriate price – a market rate, to the extent that one can be established. 

• This price should be payable in advance (or at agreed times if there is a royalty element). 

• Licences will, necessarily, be non-exclusive. 

• Moral rights should be respected and protected. 

• The deliberate stripping of metadata to ‘orphan’ works is already potentially subject to criminal sanctions and the Government will maintain that position to deter such behaviour. 

• There will be a registry of orphan works. 

• Works of unknown copyright status, such as where the work is over 70 years old and the date of death of the author is unknown, will be within scope of the scheme. 

• A large part of the collections of museums, libraries, and archives are unpublished, unique works, the Government is minded to include some unpublished works in the scope of the scheme. 

• The scheme will not take the form of an exception to copyright, but will be based on authorisation by an independent body. 

• The UK scheme will be compatible with the emerging European system. 

The study found that "there was very little difference in the perceived benefits and disbenefits of systems overseas, as compared to the potential UK system, based on the perceptions of the organizations in these countries."  So in short, the above principles are good to go.

The second study entitled "Copyright and the Regulation of Orphan Works:  A comparative review of seven jurisdictions and a rights clearance simulation" was undertaken by the University of Glasgow  Bournemouth University and CREATe.  The study does what it says on the can (not tin) and reviewed the treatment of orphan works in the US, Hungary, Denmark, Canada, India, Japan and the EU.  The conclusion there was as follows 

"The two dominant regimes governing orphan works rights clearing are limited liability where the applicant can make use of the work in good faith and after certain efforts have been made to identify the rightholder, as compared to up-front rights clearing by the applicant where the applicant pays a fee before use of the orphan work is granted. 

Under limited liability the applicant does not have to bear any costs unless a rightholder reappears (which is unlikely). This situation creates an incentive for the applicant to make use of an orphaned artefact with a limited amount of effort dedicated to identifying the true rightholder (hoping the latter will not re-appear at all). In contrast, the up-front rights clearing regime is likely to provide an incentive for putting considerable effort into attempts to identify the rightholder, because otherwise a licence will not be granted or the applicant must put aside a sum for the potential compensation of a reappearing rightholder. 

The evidence provided in this study underlines that the incentive problem is not mere speculation but reflected in actual user behaviour and shows that in particular in the US a limited liability system seems to enhance the availability of orphan works. It seems that actors such as the New York City Archives and the American Folklife Centre prefer the pragmatic approach of making the potentially orphaned works available and relying on the various defences of fair use and diligent search.  

Ultimately a legislator must make a decision on what is deemed to be the desired behaviour.  Thus, it seems feasible to consider both the limited liability and the up-front rights clearing as viable options but for different purposes. The limited liability system seems to have advantages for archives and other non-profit institutions exposed to orphan works enabling those organisations to actually share their stock of orphaned artefacts with the public. In contrast, up-front rights clearing seems to provide more appropriate incentives for commercial uses of orphaned artefacts guaranteeing that a re-appearing rightholder will be compensated for the exploitation of her work. 

Finally, overall we find very little evidence for a common underlying economic rationale for the licensing of orphan works in the various jurisdictions. In fact, the only consistent finding is that in all cases commercial licence fees tend to exceed non-commercial ones. However, the fact that not all representatives could provide separate rates for all categories underlines the limitations of the current systems. For example a consistent fee scheme would allow any work to be priced and thus permit rights clearing for the applicant. Nonetheless, in none of the jurisdictions a fee for scenario 4, the re-issuing of an old TV series, was available."

Given that none of the papers express a concrete view on what model the UK government should adopt, the AmeriKat's vote is with the limited liability model.  Although she hasn't seen any statistics of how many rightsowners later come forwards after the exploitation of their once orphan work, she doubts its high enough to justify an up-front rights clearing system that could have a chilling effect on the exploitation of orphan works.

In any event, after two published reports on the topic it should not be too long before we see some draft legislation on orphan works filtering through the House of Commons.