Orphan works in the US – getting rid of “a frustration, a liability risk, and a major cause of gridlock”?

This article was first published on The 1709 Blog.

Just a couple of weeks ago, in June, the US Copyright Office published a comprehensive (234 page!) report on the topic of orphan works and mass digitization. The report deals with the questions of whether legislation is needed to tackle the orphan works problem, and if so, what that legislation should look like.

But let’s back up. An orphan work is a copyright-protected work whose rightsholder is unidentifiable or untraceable, making it impossible to seek out a license. This applies to a means a fairly large percentage of works² which thus cannot be used legally, if the intended use is not already covered by one of the existing exceptions and limitations to copyright. While the issue has been discussed most prominently in the context of books and mass digitization, the orphan works problem has frustrated various kinds of potential users around the world. In Europe, the topic has received a lot of attention and is the subject of an entire directive – the 2012 directive on certain permitted uses of orphan works. The exception this directive introduces, however, is quite narrow, and many commentators have questioned its effectiveness. That is particularly because it requires users to conduct a diligent search for rightsholders, which  many institutions consider too time-consuming and too costly.

Across the Atlantic, lawmakers and scholars have followed these European developments closely. Several attempts at passing orphan works legislation in the US (in 2006 and 2008) have remained unsuccessful. Prominent scholars (see e.g. here) have noted that it would be sensible to just rely on the existing fair use exception to deal with orphan works, especially for libraries’ digitization projects. Fair use, the most important exception and limitation to US copyright, is open-ended and allows courts to consider several factors when deciding whether the use is fair or whether it constitutes a copyright infringement. The orphan works status could be taken into consideration on several levels, e.g. for the nature of the copyrighted work or for the market factor (as a clear case of market failure).

Despite these arguments, the Copyright Office decided to review the topic of orphan works and started another series of public roundtables in 2014. These roundtables brought together a number of experts and diverse stakeholders, and were designed to advise Congress on potential legislative solutions (all transcripts and videos available here).

In its report, the US Copyright Office has now published its findings on the topic, and have also considered the experiences of other countries (and the EU) with orphan works legislation thus far. Interestingly, a limitation of liability is at the heart of the recommendation made by the US Copyright Office.This basically means that a reappearing rightsholder cannot claim full damages that would usually be available to him/her in the event of a copyright infringement – provided the infringer considered the work to be an orphan (details below). The Copyright Office rejects the idea of relying only on fair use or best practice statements, and also does not want to introduce a new exception to copyright (as we did in Europe). Rather, they return to an idea that they had already lobbied for in the past – the limitation of liability. In fact, many aspects of the report are similar to the Shawn Bentley Orphan Works Act of 2008, which eventually failed in the House of Representatives.

Core elements of the legislation proposed in the US Copyright Office’s report …

… specifically for orphan works

A good overview of the criteria the US Copyright Office considers important for future legislation can be found on the 1709 blog. The main idea set forth in the report is to limit a reappearing rightsholder’s monetary relief to a “reasonable compensation.” One major element we know from the European approach also made it into the US proposal: the diligent search requirement combined with a notice of use.³ However, going much further than the European exception, the US proposal would also allow derivative uses and would limit injunctions for these types of uses (as long as the infringer pays a fee and provides attribution). An interesting and also new feature of the US orphan works proposals is the fact that this limitation on injunctions would not apply if the use of the work “would be prejudicial to the owner’s honor or reputation, and this harm is not otherwise compensable.”

The US Copyright Office’s main argument for rejecting a solution that only relies on fair use is that courts have “yet to explicitly address how to apply fair use to orphan works” and that “because of its flexibility and fact-specific nature” fair use jurisprudence is “a less concrete foundation for the beneficial use of orphan works than legislation.”

… for mass digitization projects

The second part of the report deals with something entirely new to the US system: extended collective licensing (ECL) for mass digitization projects. The US Copyright Office explains what ECL is as follows:

“In an ECL system the government ‘authorizes a collective organization to negotiate licenses for a particular class of works (e.g., textbooks, newspapers, and magazines) or a particular class of uses (e.g., reproduction of published works for educational or scientific purposes)’ with prospective users. By operation of law, the terms of such licenses are automatically extended to, and made binding upon, all members of the relevant class of rightsholders including those who do not belong to the collective organization unless they affirmatively opt out. ECL differs from compulsory licensing in that private entities, rather than the government, establish royalty rates and terms of use. In that respect, ECL ‘is thought to be beneficial because it preserves the freedom to contract more so than alternative compulsory license schemes.'”

Some experts at the roundtables spoke up against introducing ECL, arguing that it does not fit the American copyright system, that risk-averse users will license rather than rely on fair use, or that a lot of money would be generated that is non-disbursable. So far, the US Copyright Office has not set forth a formal legislative proposal for ECL. Rather, they want to explore a pilot program that is (at least initially) limited to certain types of published works and certain types of users and uses. Overall, the addressees look a little like the beneficiaries of the European orphan works exception: libraries and archives that fulfil their non-profit goals and seek to digitize their collections (literary works, embedded pictorial or graphic works, photographs).

Where the US Copyright Office’s ideas may work better than the European approach

Apart from the different overall approach adopted in the US proposals (limitation of liability rather than exception), the scope of the proposed orphan works legislation is also much broader than that of the Orphan Works Directive. While only certain cultural heritage institutions benefit from the European directive for reproductions and making works available to the public, the US proposal for orphan works is to apply to all types of users and all types of uses. Therefore, private actors like Wikimedia or documentary filmmakers, which the European directive does not privilege, could also rely on the proposed US legislation to, for example, make derivative works.

Similarly, while the EU directive is limited to certain types of works (i.e. books and other writings, audiovisual and cinematographic works, and embedded works), the US proposal covers all types of orphan works. This even includes orphan photographs. These tend to raise a lot of concern from rightsholders who are concerned their photographs may falsely be considered orphaned. When orphan works legislation was passed in the UK (a much broader licensing scheme that applies in parallel to the European mandated exception and is also not limited to certain types of works), some commentators were even alarmed that the UK had “abolished copyright”. In the US, photographers also voiced the most concerns, for example, that on the Internet, their works often get separated from the rights information. These issues, however, did not sway the US Copyright Office. It referred photographers to databases and projects such as the PLUS registry or the UK Copyright Hub that help users to identify rightsholders of photographs. And, in “the unlikely but unfortunate event that a work of visual art is erroneously claimed by a user to be ‘orphaned,’ and cognizable damages to the owner result, a small claims tribunal” should be set up.

The fact that the scope of the proposed US legislation is much broader may already make the orphan works legislation less of a niche project than the European directive. Some aspects, such as the fact that the orphan works proposal also applies to unpublished works, would likely never be possible in Europe. The fact that the US Copyright Office acknowledges that the diligent searches are not feasible for libraries’ and archives’ mass digitization projects also seems to be an important lesson learned from the European experience.

Some disappointed stakeholders and still time for comments

However, not everybody is excited about the part of the report that pertains specifically to orphan works, particularly the search and notice-of-use requirements. This aspect makes some potential users as unhappy as the search requirements in the Orphan Works Directive make their European colleagues. For example, the Association of Research Libraries notes in an issue brief that the “notice of use is a burdensome requirement that will require time and resources and could significantly undermine the usefulness of the legislation”. They would prefer to rely on fair use and best practice statements. The issue brief thus highlights the notion that the time-consuming search and notice-of-use requirements may deter as many (or more) users than does the legal uncertainty that comes with fair use. Some commentators have let out their frustration even more directly, and called the proposal “ridiculous” and “doubling down on the problem itself”.

While it seems understandable that the search requirements are time-consuming and complex, it does not appear to be that big a burden to then also document this search. Particularly, because 1) this documentation has the advantage of allowing possible rightsholders to see that their work is considered an orphan, and because 2) unlike the situation in Europe, the US proposal only sees the documentation as a “mechanism for isolated uses,” and plans a different regime for mass digitization projects⁴ (even though this again is limited to certain types of works, see above). However, the US Copyright Office has opted not to incorporate one potential advantage that could come with a searchable notice-of-use register – i.e. avoiding duplicate searches. The Copyright Office states: “[E]very prospective user must satisfy the diligent search requirement independently”; checking the notice-of-use registry will not be sufficient.

We will see if this proposal will be more successful than its predecessors. It certainly has promising elements, even though some stakeholders believe the search and notice-of-use requirements will continue to make orphan works a source of frustration.

In the meantime, for all those who have some ideas to share about implementing the ECL pilot programme, it’s time to comment! The Copyright Office has published a Notice of Inquiry and will be accepting written comments until August 10, 2015.

1 [title] The Copyright Office’s assessment of orphan works on their website.

2 In Europe, film archives e.g. estimate that around 20% of their collections are orphans (note that these are however covered by the European Orphan Works Directive).

3 The diligent search was already part of previously proposed legislation in the US, but not the notice-of-use requirement.

4 Member states can however introduce legislation for mass digitization projects on their own, recital 4 of the Orphan Works Directive states that the “Directive is without prejudice to specific solutions being developed in the Member States to address larger mass digitisation issues, such as in the case of so-called ‘out-of-commerce’ works”.

This post is part of a weekly series of articles by doctoral canditates of the Alexander von Humboldt Institute for Internet and Society. It does not necessarily represent the view of the Institute itself. For more information about the topics of these articles and asssociated research projects, please contact info@hiig.de.