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

Rike Maier

What is going on with orphan works in the US? The 1709 Blog is delighted to host a thoughtful guest contribution by Rike Maier, a PhD researcher at Humboldt University Berlin and researcher at the Humboldt Institute for Internet and Society.

Here's what Rike writes:

“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 digitisation. 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 work protected by copyright whose rightsholder is unidentifiable or untraceable, making it impossible to seek out a license. This means that a large percentage of works [in Europe, for instance film archives estimate that around 20% of works in their collections are orphans (note that these are however covered by the Orphan Works Directive)] 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 was discussed most prominently in the context of books and mass digitisation, the orphan works problem has frustrated various kinds of potential users around the world. In Europe, the topic received a lot of attention and is the subject of an entire directive, ie the 2012 Orphan Works Directive. 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 that many institutions consider too time-consuming and too costly.

Across the Atlantic, lawmakers and scholars have followed European developments closely. Several attempts at passing orphan works legislation in the US (in 2006 and 2008) remained unsuccessful. Prominent scholars (see eg here) noted that it would be sensible to just rely on the existing fair use doctrine to deal with orphan works, especially for libraries’ digitisation projects. Fair use, the most important exception and limitation to US copyright, is open-ended and allows courts to consider several factors to decide whether the use is fair or whether it constitutes a copyright infringement. The orphan works status could be taken into consideration at several levels, eg in relation to the nature of the copyrighted work or 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 published its findings on the topic, and also considered the experiences other countries (and the EU) have made with orphan works legislation thus far. Interestingly, the recommendation the US Copyright Office makes is at its core a limitation of liability. That basically means that a reappearing rightsholder cannot claim full damages that would usually be available to him in case of a copyright infringement – if 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, it goes back to the idea – limitation of liability – it had already lobbied for in the past. 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 its way into the US proposal: the diligent search requirement combined with a notice of use [the diligent search was already part of previously proposed legislation in the US, but not the notice of use requirement]. 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). Interestingly, and also new to the US orphan works proposals, 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 digitisation projects

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

“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 had spoken up against introducing ECL, arguing that it does not fit within the US copyright system, that poses the risk that averse users will license rather than to 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, it wishes to explore a pilot program that would be (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 EU orphan works exception: libraries and archives that fulfil their non-profit goals and digitise their collections (literary works, embedded pictorial or graphic works, photographs).

... Hopefully

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

Apart from the overall different approach (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 EU directive for reproductions and making works available to the public, the US proposal for orphan works would apply to all types of users and all types of uses. Therefore, private actors like Wikimedia or documentary filmmakers that the EU 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 (ie books and other writings, audiovisual and cinematographic works, and embedded works), the US proposal would cover all types of orphan works, including even orphan photographs. These tend to raise a lot of concerns on the side of rightsholders, in the sense that photographs may be unduly considered orphan. 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 “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.

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 EU directive. Some aspects, such as the orphan works proposal also applying 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 digitisation projects also seems to be an important lesson learned from the European experiences.

Some disappointed stakeholders and still time for comments

However, not everybody is excited about the orphan works part of the report, 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 noted 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”. As such, it would prefer to rely on fair use and best practice statements. The issue brief thus highlights 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 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 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) a bit different from the situation in Europe, the US proposal only sees the documentation as a “mechanism for isolated uses”, and plans a different regime for mass digitisation projects [Member states can however introduce legislation for mass digitization projects on their own, Recital 4 in 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”] (even though this again is limited to certain types of works, see above). One advantage that could come with a searchable notice of use register – ie avoiding duplicate searches – is however denied by the US Copyright Office. “[E]very prospective user must satisfy the diligent search requirement independently”, and 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 stakeholder 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 program, it’s time to comment! The Copyright Office has published a Notice of Inquiry and accepts written comments until 10 August 2015."

Thanks so much Rike for such a great and detailed analysis!