(via Joe Gratz) The US Copyright Office has recently conducted an inquiry into the impact of copyright on use of, and access to orphan works – in essence, works where the owner of copyright cannot be identified. The very long time copyright lasts tends to lead to lots of these orphan works – where copyright owners die, or go out of business. It has often been noted that copyright term extension gave protection that might be useful for a very small proportion of works, but also closed off the possibilities for using, or making available the massive body of these little orphans.

The US Copyright Office has now completed its inquiry, and has recommended a statutory defence, which would limit the availability of injunctions, and limit monetary awards to ‘reasonable compensation’, provided that a person first carried out a good faith, reasonably diligent search to locate the owner before going ahead with use of an apparently orphan work.

The ‘orphan works’ issue has garnered a fair bit of attention, recently, because it is an area where the copyright law demonstrably does not serve its basic purposes:

a productive and beneficial use of the work is forestalled – not because the copyright owner has asserted his exclusive rights in the work, or because the user and owner cannot agree on the terms of a license – but merely because the user cannot locate the owner. Many users of copyrighted works have indicated that the risk of liability for copyright infringement, however remote, is enough to prompt them not to make use of the work. Such an outcome is not in the public interest, particularly where the copyright owner is not locatable because he no longer exists or otherwise does not care to restrain the use of his work.

Anyway, the US Copyright Office has now produced a very large report (pdf here), and (to cut to the chase) a recommendation for the following addition to the US Copyright Act:

(a) Notwithstanding sections 502 through 505, where the infringer:
(1) prior to the commencement of the infringement, performed a good faith, reasonably diligent search to locate the owner of the infringed copyright and the infringer did not locate that owner, and
(2) throughout the course of the infringement, provided attribution to the author and copyright owner of the work, if possible and as appropriate under the circumstances,
the remedies for the infringement shall be limited as set forth in subsection (b).
(A) no award for monetary damages (including actual damages, statutory damages, costs or attorney’s fees) shall be made other than an order requiring the infringer to pay reasonable compensation for the use of the infringed work; provided, however, that where the infringement is performed without any purpose of direct or indirect commercial advantage, such as through the sale of copies or phonorecords of the infringed work, and the infringer ceases the infringement expeditiously after receiving notice of the claim for infringement, no award of monetary relief shall be made.
(A) in the case where the infringer has prepared or commenced preparation of a derivative work that recasts, transforms or adapts the infringed work with a significant amount of the infringer’s expression, any injunctive or equitable relief granted by the court shall not restrain the infringer’s continued preparation and use of the derivative work, provided that the infringer makes payment of reasonable compensation to the copyright owner for such preparation and ongoing use and provides attribution to the author and copyright owner in a manner determined by the court as reasonable under thecircumstances; and
(B) in all other cases, the court may impose injunctive relief to prevent or restrain the infringement in its entirety, but the relief shall to the extent practicable account for any harm that the relief would cause the infringer due to the infringer’s reliance on this section in making the infringing use.
(c) Nothing in this section shall affect rights, limitations or defenses to copyright infringement, including fair use, under this title.
(d) This section shall not apply to any infringement occurring after the date that is ten years from date of enactment of this Act.

So, to summarise this rather wordy piece of proposed legislation, what you have to do is:

  • before doing the infringing thing with the work, you do a good faith, reasonably diligent search to locate the owner of the infringed copyright and the infringer did not locate that owner
  • if possible/appropriate, you give attribution to the owner while doing the act.

If you do these things, then:

  • there can be no award of damages, only an order for reasonable compensation (and not even that if your use was non-commercial and you stop once receiving a notice of the claim of ownership);
  • no injunction will be issued that prevents the infringer from using their derivative work that recasts, transforms or adapts the infringed work with a significant amount of the infringer’s expression;
  • if there is no such transformation etc, an injunction can issue but the infringer must be compensated for the harm they suffer from relying on the section.

A couple of things to note about this proposal.

First, a key advantage of this system, it seems to me, is that it does not require the ‘infringer’ to get permission from someone beforehand – they can act without going through some bureaucracy. This would have significant advantages in terms of reduced transaction costs. Compare this to the Australian Copyright Council’s proposal for dealing with orphan works, which would require a prospective user to seek permission from some body like the Copyright Tribunal or Federal Magistrates’ Court, and payment of a license fee, or the Canadian System which also requires permission beforehand.

I have always thought that replacing the transaction costs involved in the need to find the copyright owner, with new and different transaction costs involved in seeking prior permission, would lead to a situation of no change, and would not solve the orphan works problem. (For more evidence on the orphan works issue in Australia, and discussion of the issue, see my submission with Emily Hudson to the Fair Use Inquiry here in Australia).

Another thing to note about the proposal is the comment made by Joe Gratz:

‘The proposed statute bucks the trend in copyright law to micromanage individual cases through statutory drafting. (See, e.g., 17 U.S.C. § 114.) It allows the courts to consider the most important equitable issues on a case-by-case basis — which is what courts do best.

I’ve complained elsewhere about the same tendency in Australian law, and the tendency to overcomplicate things with amazingly detailed provisions. I agree with Gratz – the language is pretty open-textured and that may well be quite a good thing.

This proposal is a wake-up call, I think, for Australia as it contemplates its own moves in relation to copyright exceptions. Many, many submissions in the Fair Use Inquiry raised the issues of orphan works. There was plenty of evidence there is an issue. And, indeed, copyright owning interests also acknowledged that there was an issue and that something should be done about it. The concern I had about the solutions proposed was that they were “Australian solutions” that proposed extra layers of bureaucracy which would, I think, offer little advantage. Part of the reason for this, I think, is illustrated in the Copyright Council’s reasons for its proposal:

We think that any mechanism allowing the use of “orphaned” works should require the payment of a licence fee, or there is a risk that users will choose to use “orphaned” works instead of works available for licence, and adversely affect the market for those works. The licence fee may vary depending on the type of use; a commercial use would likely require a higher use than a non-commercial one.

This is a completely understandable reaction, although I’m not sure that it is realistic. After all,

  • the easier solution for users wanting to avoid copyright license fees is to use material clearly out of copyright (Shakespeare!); and
  • most copyright material, while in some sense ‘substitutable’, in other respects is not. A Beatles song is not completely and clearly replaceable with a Black Sabbath song, or even a song by Blur, similar as some of them sound.

My hope would be that:

  • something along the lines of what the US is proposing might be adopted there, and
  • something similar might happen here.

We need this to happen so that we don’t end up with a whole lot of bureaucratic procedures, required in each country where there is a copyright law. The US moving in that direction would be a big step towards a harmonised solution, avoiding the problems that Geller foresaw:

‘The problem of orphan works is best solved globally. Such a solution should facilitate making orphan works accessible to members of the public worldwide. The solution should also spare users the trouble of having to start procedures with national copyright or like offices one after another.’

But as I submitted at the time of the Fair Use Inquiry, we could have more consultations directly on that issue. With more time to think about this proposal, no doubt there will be details that need working through.

True confessions? I’ve not read the report yet, just the recommendation. Look forward to reading it! And PS – for a collection of my previous posts relating to orphan works issues, click here.

Update: Public Knowledge have issued a press release on the recommendation. Here are some of their comments:

‘The concern with the Copyright Office’s recommendation is that “reasonable compensation” based on what a willing buyer and reasonable willing seller would have agreed to at the time of use, “based predominantly by reference to evidence of comparable marketplace transactions,” does not adequately address the issue of orphan works. The whole problem is that there is no “comparable marketplace transaction” for an orphan works situation because there was no reasonable willing seller in the first place. To allow a court to decide what would have been reasonable retroactively, we think, creates too high of a hurdle for potential users of an orphan work, and will ensure that the orphans stay locked away in the orphanage.

That’s why we proposed a cap [PDF] on the amount that a user of an orphaned work would have to pay to the owner. This gives the user of the work a tangible amount of certainty of what he or she would have to pay if the owner surfaced. Without this kind of cap, we don’t believe any one would use an orphan work—it’s just too risky.

Update 2: Eric Goldman has some comments here, noting that:

‘My initial reaction is that there is a lot to commend this proposal. It addresses one of the big problems of copyright law–the across-the-board strict liability standard–by providing a more robust defense for those trying to do the right thing. (The current defense of “innocent infringement” offers little comfort to secondary users–there’s still a lot of money on the table in an infringement claim).
The proposal also helps protect the investment that secondary users make into derivative works from being subject to an injunction-driven hold-up game. In a sense, this proposal contemplates a court-determined licensing fee where the parties couldn’t identify themselves to negotiate a fee directly.’