Quick off the heels to changes to the parody rules (see here), yet more changes to UK copyright law come into force today (29 October) allowing, for the first time, the use of certain copyright works without the consent of the copyright owner.
The problem of orphan works
For some years now, the EU has been concerned about how ‘orphan works’ should be managed. Orphan works are copyright works where the copyright owner is unknown or cannot be found (copyright not being a registrable right across the EU). Reproduction or certain other uses of orphan works would amount to copyright infringement (because of the lack of consent from the copyright owner). The EU’s concerns have focused around the wasted cultural and commercial opportunities that orphan works represent – effectively, they are potentially valuable materials that cannot be properly exploited .
Separately, the problem of orphan works in the UK was highlighted in two major, high-profile reviews of UK intellectual property law, namely the Gowers Review of Intellectual Property in 2006 and the Hargreaves Review of Intellectual Property and Growth in 2011. Both reviews recommended the introduction of a scheme permitting orphan works to be subject to compulsory licensing.
New UK licensing scheme
Today (29 October) an orphan works licensing scheme comes into force in the UK. This means that anyone wanting to use a copyright work can apply to the UK Intellectual Property Office (IPO) for a licence to do so, provided they have first conducted a “diligent” search to try and identify the copyright owner. The licence would allow the user to carry out acts (for commercial or non-commercial purposes) that would otherwise infringe copyright in the UK, for up to seven years. The user will be required to pay a “reasonable licence fee” (set by the IPO) taking into account the licence fees charged for similar uses of analogous non-orphan works.
The parallel EU scheme
Separately, but also today, an EU backed orphan works scheme will also come into force in the UK. Although this will run in parallel to the UK scheme, its scope is much more limited. Essentially, certain cultural organisations within the EU, such as museums and archives, will be allowed to use orphan works for non-commercial and non-profit making purposes where this is in pursuit of their public interest mission (and provided a diligent search in good faith has failed to identify the copyright owner). Primarily, they will be allowed to digitise and upload orphan work material in their collections to their websites. The objective is to “make Europe’s cultural heritage available online across the EU” by providing greater access to works that are currently only available in a museum, archive or library for on the spot reference.
The objective behind the reforms is to assist both copyright owners and potential users of copyright works. Copyright owners are seen to benefit from licensing opportunities (and associated revenue) becoming available to them. Users are seen to benefit from being able to make the most of the cultural and commercial opportunities created by orphan works.
Users are likely to welcome these changes in the law, as freeing up for use a large number of copyright works which were previously off-limits. Copyright owners, though, may have more reservations. Is the diligent search requirement sufficiently rigorous? Will they miss out on royalties otherwise due to them? Will the royalties be set at an appropriate level? What if their work is subjected to uses that negatively impact on the image associated with the work?
These concerns are understandable; however, some safeguards are built into the legislation which comes into force today. For example, under the UK scheme, the IPO must hold all orphan works royalties it receives in a ring-fenced account for 8 years from the date of the licence and pay these to the copyright owner if they come forward during that period (with discretion to hand the monies over if the owner comes forward after eight years have expired). The IPO also has discretion to refuse to grant a licence on various grounds, including where the proposed use of the work constitutes derogatory treatment.
However, if copyright owners want to be sure that their works will fall outside the scope of this new licensing regime, they should ensure that their identity as copyright owner is adequately ‘advertised’, by clear and unambiguous inclusion on the work itself. Unfortunately, such measures are not always practicable, for example in the advertising context, where authors are rarely referenced in material they have created.
Squire Patton Boggs is advising both copyright owners and potential users on the new orphan works regimes. For more information, please feel free to contact Carlton Daniel.