Wednesday 16 July 2014

Orphan works in the UK: a caring home at last?

Fun is guaranteed when you know
everything about 'diligent search' ...
Issues surrounding orphan works are not only important, but also make a great topic of conversation for summer gatherings. If you are running short of insights into this fascinating copyright-related topic, don't worry because 1709 Blog friend Tom Ohta of Bristows LLP (@tom_ohta) is coming to your rescue. 

Here's what Tom writes:

Orphan Works: here we come!

As readers may recall, earlier this year, the UK government launched a technical consultation [hereon the draft secondary legislation to introduce a licensing scheme for orphan works in the UK [on which this blogger wrote a longer (and critical) piece here] and to transpose the Orphan Works Directive into English law.

The UK government has now considered the responses to its technical consultation and taken these into account in the amended text of two regulations which have now been laid before Parliament: the Copyright and Rights in Performances (Licensing of Orphan Works) Regulations 2014 (which introduces the orphan work licensing scheme) and the Copyright and Rights in Performances (Certain Permitted Uses of Orphan Works) Regulations 2014 (which transposes the Orphan Works Directive into English law). The amendments made to the text following the consultation are primarily ones of refinement.

... Just look at Tom's smile!
Previously, orphan works have been the subject of somewhat sensationalist (and misleading) commentary with buzz words such as the ‘Instagram Act’ which was ‘abolishing copyright’ [here]. A good starting point for those seeking to get up to speed with orphan works is the UK IPO’s (37-page) response to the technical consultation which summarises the comments received and sets out its current position. In particular, there are helpful flow-charts of how the licensing scheme is intended to work and the process under the Orphan Works Directive (at pages 4 and 5).

However… for those looking for the headline points, these are summarised below for your perusal, followed by some thoughts on possible issues that may arise in the future.

Authorising body

·    The UK IPO will be the authorising body responsible for granting orphan licences.

Diligent search

·    A ‘reasonable search’ of the ‘relevant sources’ must be conducted. The regulation requires applicants to search the register maintained by the UK IPO and the databases maintained by OHIM.

·    Where the UK IPO and OHIM searches fail to reveal the owner of the work, applicants must then check the sources listed in Part 2 of Schedule ZA1 to the CDPA: these are set out in the Certain Permitted Uses of Orphan Works Regulations, and different sources (including collecting societies) are listed depending on the type of work in question, eg audiovisual, visual works, newspapers etc.

·    It is likely that the Copyright Hub will play an important role in the functioning of the licensing scheme by having, for example, inter-linked databases to reduce the cost of diligent searches. However, it is currently still at a test phase.

With your diligent search
having a 7-year validity,
you may even think of
spending this time abroad
·    A diligent search will be valid for 7 years. 

Applying for an orphan licence

·    Applicants must provide information in the orphan licence application form (which has not yet been released) showing that a diligent search has been conducted, and specifying how it intends to use the orphan work.

·    It remains to be seen what level of detail the IPO will require to satisfy the diligent search requirements. It is worth noting the detailed sector-specific guidelines on due diligence criteria for orphan works which are set out in a Joint Report published in May 2008 as part of the European Digital Libraries Initiative.

It is unclear to what extent the IPO will have regard to these Joint Report guidelines when considering applications under the Licensing of Orphan Works regulation. In particular, the Joint Report guidelines suggest that as part of a diligent search, the applicant should take steps to publicise the orphan work, for instance, in trade publications, social networks, and in the press. This is likely to increase time and cost, and it is questionable whether it would be proportionate to require applicants to take such steps under the UK regime.  

Licence terms

·    An orphan work licence permits the licensee to carry out acts that would otherwise infringe copyright or performers’ rights for up to 7 years. However, there is a statutory prohibition against the grant of exclusive licences and sub-licensing is not permitted.

·    The licence may be granted subject to conditions, and the IPO has the discretion to vary the licence terms during its term.

·    Whether a licence can be transferred is not addressed in the regulation. However, the IPO has indicated that transferability of licences will be dealt with in the licence terms, and the normal position is that they will not be freely transferable, although each case will be considered on its facts.

Grounds of refusal

·    The IPO may refuse to grant a licence where it considers that the proposed adaptation or use of the work is ‘not appropriate having regard to the circumstances of the case, including whether the proposed adaptation constitutes derogatory treatment of the work’.

·    It also has a wide discretion to refuse to grant a licence on ‘any other reasonable ground’.

Licence fees

·    The IPO is entitled to charge a ‘reasonable licence fee’ for the licence term, bearing in mind factors such as the licence fees charged for a ‘similar use’ of a ‘similar relevant work’ which has not been orphaned. The IPO has been working closely with sector-specific groups (as listed in the response) to ascertain potential licence fees.

·    A reasonable additional amount can be added to the licence fee to cover the IPO’s costs.

·    The IPO must hold all orphan licence fees in a ring-fenced account, and must retain these for at least 8 years from the date on which the licence was granted.

·    After 8 years, if no rights holder comes forward to claim ownership, the IPO can deduct its reasonable costs from the retained fee, and apply any surplus ‘to fund social, cultural and educational activities’.

IPO expects revenant rightholders
be in better shape than the one above
·    If a rights holder comes forward within 8 years from the date of the licence grant and satisfies the proof of ownership requirements of the orphan work (regarding which we currently have little information), the IPO must pay the rights holder the licence fee paid by the orphan licensee within 2 months.

·    If the rights holder comes forward after the 8 year period, the IPO has the discretion to remunerate the rights holder as it considers reasonable in all the circumstances.


·    A rights holder has a right of appeal to the First-Tier Tribunal (presumably, to the General Regulatory Chamber) where it considers that the IPO has acted improperly or failed to comply with its obligations under the regulation. The procedural rules currently applicable to the General Regulatory Chamber can be found here.

·    An orphan licensee can appeal to the Copyright Tribunal (whose rules of procedure can be found here) if the IPO refuses to grant a licence. An appeal can also be lodged by the orphan licensee in respect of any conditions imposed by the IPO in connection with a granted licence, or in respect of the licence fee amount.

What’s next?

The regulations will now be laid before Parliament for approval, and are due to come into force on 29 October 2014 [this is also the deadline for transposing the Directive into the laws of Member States]. In the meantime, the UK IPO is no doubt being kept busy developing the IT system and further fleshing out the processes underlying the orphan works licensing scheme.

It is anticipated that a number of issues are likely to raise issues for stakeholders, including the following:

·    Striking the right balance when considering whether the diligent search requirements have been met: the IPO will need to tread carefully to ensure that it adopts a consistent approach which does not impose overly onerous obligations on orphan licensees but also adequately protects the interests of rights holders, whilst considering the interests of those responding to diligent search requests.

·    Obligations on organisations responding to diligent search requests: the IPO acknowledges the collecting societies’ views that where an organisation receives a diligent search request, it is up to that organisation whether or not they respond, and if so, whether they can charge for providing that service. Given that the regulation does not impose any positive obligations on organisations to respond to diligent search requests, how will an organisation’s refusal to respond to a request (for instance, because it is particularly onerous) or a licensee’s refusal to pay an organisation’s requested administration fee (for instance, because it considers that it is unreasonably high) be taken into account when the IPO evaluates whether a ‘reasonable search’ has been carried out?

·    Global access to digitised orphan works: the scope of the orphan licence extends to digitising orphan works and making them available online. However, the statutory scope of the licence is restricted to use within the UK. Thus, where orphaned content is made available online, it raises questions as to how to address concerns about unlawful use of orphan content in other jurisdictions.

Whilst there are technical measures, such as geo-blocking, that could be deployed, where a site contains both orphan and non-orphan content, this can be an overly blunt tool. In the future however, it is feasible that reciprocal agreements are entered into with other countries to enable UK-issued orphan licences to be valid in those territories and vice versa [this is indeed something that this blogger heard IPO officers saying at a recent conference].

·    Dealing with ‘works within works’: how far does a diligent search need to go in respect of a work which contains multiple works within it – for instance, or a book which contains photos or drawings?

·    Moral rights: the law in this area is still evolving (for instance, in relation to moral rights and parody) and it will be interesting to see how the IPO will deal with moral rights issues when reviewing orphan licence applications.

It is likely to take some time before we are able to see how effectively the orphan licensing scheme will work in practice, and there will undoubtedly be further issues that arise as the orphan work licensing scheme develops. Watch this space.


Anonymous said...

It's all very well, and anything to help with copyright clearance is a help; but I wonder in practice how much (if at all) this will in fact get used.

If one really cared about making old works available, a better solution would be to require registration for copyright to continue after 95 years. (Chosen to match the U.S. term for works for hire).

It's establishing that works are in the public domain (rather than just licenseable) that really opens the gates to the possibility of widespread access, searchability and re-use.

At the moment anything published before 1923 is fair game in the United States. But the likes of Google, Hathi Trust, etc won't let Europeans see anything published after the 1870s.

Do we really need to keep so much of our recent history locked up, just for the sake of keeping a very limited number of cash cows still in copyright? Can we not require those cash cows to be registered, and free the rest?

Andy J said...

These two sets of regulations are going to just confuse the ordinary person. The term 'orphan work' can now apply to two different things; something licensed under the IPO-administered scheme involving all types of copyright works, and the more narrowly EU Directive defined works which fall under the permitted use Regulations. It is a shame that no-one felt able to come up with a less jargon and inaccurate word than 'orphan' to describe one or both uses.
I can see several potential problem areas. For example, the IPO-licensed orphan work will be granted a 7 year licence (with a fee to match) yet some licensees may only require a much shorter term, but will still be required to pay the full fee. Secondly, UK law currently differentiates between published and unpublished works, yet the Regulations do not. If a licensee obtains a licence to use a previously unpublished work, he will then be able to publish that work and thus would appear to benefit from the 25 year publication right created by regs 16 and 17 of the Copyright and Related Rights Regulations 1996 (SI 1996/2967). This anomaly applies to both types of orphan work, but is clearly more serious in the case of the 7 year licence than it is with the EU Directive mandated permitted use Regulations since they would appear to apply in perpetuity and, de facto, be exclusive to the relevant body which self-certifies to having carried out the diligent search.

Unknown said...

Your above comments only concern the first Regualtion, the Regulation concerning the UK uses for commercial purposes of orphan works. Am I correct? You are not clear enough in your text.
Will you do a text about the UK transposition of the EU Directive?


Axel said...

Your above comments only concern the first Regualtion, the Regulation concerning the UK uses for commercial purposes of orphan works. Am I correct? You are not clear enough in your text.
Will you do a text about the UK transposition of the EU Directive?


john r walker said...

Eleonora Hi
I really wonder about the economics i.e transaction costs/benefits side of licensing of low value orphans.

Eleonora Rosati said...

Hi John, the IPO said that licensing fees would be at the going rate, ie a fee appropriate to type of work and use. See

Andy J said...

I can see John Walker's point. In the real world the true market value of most works will include an element based on the reputation of the author or artist. A painting of sunflowers by Mr V van Gogh has something of a cachet about it. But in orphan world things are different: how do you judge the licensable value of a painting of sunflowers by an unknown artist?
Or what about JK Rowling's first attempt at a novel featuring Henry Potter the stage magician, which she discarded and it later turned up at flea market minus the title page. A diligent search failed to find the author, a licence is requested and granted for a modest fee. The opus is published and becomes a best seller, netting the publisher 1000 times the fee paid. Ms Rowling comes forward to claim the work as hers. Is she entitled to any of the profits made by the publisher, or just the 'reasonable' licence fee set by the IPO?

john r walker said...

andy agree. The fixed costs of due diligence, and of the IPO running a licensing office, are likely to make getting a license for low value orphans too costly, unless these costs are to some degree reduced i.e underwritten , by fees gained on larger payments for more valuable licenses of things that are more cases of mistaken identity than real orphans.