Orphan Works Licensing

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One of the consequences of extending the term of copyright in many types of copyright has been a massive increase in the number of works in which copyright subsists whose owners cannot be identified or found. Such works are known as "orphan works" and HM government claims that there are some 91 million of them in the UK alone.  Because their owners cannot be traced orphan works cannot lawfully be reproduced even for preservation. Consequently, works recorded on such media as celluloid film and magnetic tape may be lost for ever.  Much of that work is culturally important and some of it is of considerable scientific interest such as patient records in studies of malaria.  In Digital Opportunity: A Review of Intellectual Property and Growth Professor Hargreaves described the problem of orphan works as "the starkest failure of the copyright framework to adapt."

The Orphan Works Directive
This is not of course a specifically British problem and on the 25 Oct 2012 the European Parliament and Council adopted Directive 2012/28/EU on certain permitted uses of orphan works.  Art 6 (1) of that Directive requires EU member states to provide for an exception or limitation to the right of reproduction and the right of making available to the public in their copyright laws to enable "publicly accessible libraries, educational establishments and museums, as well as by archives, film or audio heritage institutions and public-service broadcasting organisations" to make orphan works on print, film or audio or audio-visual media to available to the public and reproduce them for "the purposes of digitization, making available, indexing, cataloguing, preservation or restoration."  Art 9 (1) required member states to implement the Directive by 29 Oct 2014.

Enterprise and Regulatory Reform Act 2013
The legislation that implemented that Directive was the Enterprise and Regulatory Reform Act 2013. S.77 (3) of that statute inserted the following new provisions into the Copyright, Designs and Patents Act 1988:
Orphan works licensing and extended collective licensing
116A Power to provide for licensing of orphan works
(1) The Secretary of State may by regulations provide for the grant of licences in respect of works that qualify as orphan works under the regulations.
(2) The regulations may—
(a) specify a person or a description of persons authorised to grant licences, or
(b) provide for a person designated in the regulations to specify a person or a description of persons authorised to grant licences
(3) The regulations must provide that, for a work to qualify as an orphan work, it is a requirement that the owner of copyright in it has not been found after a diligent search made in accordance with the regulations.
(4) The regulations may provide for the granting of licences to do, or authorise the doing of, any act restricted by copyright that would otherwise require the consent of the missing owner.
(5)  The regulations must provide for any licence—
(a) to have effect as if granted by the missing owner;
(b) not to give exclusive rights;
(c) not to be granted to a person authorised to grant licences.
(6) The regulations may apply to a work although it is not known whether copyright subsists in it, and references to a missing owner and a right or interest of a missing owner are to be read as including references to a supposed owner and a supposed right or interest.
116B Extended collective licensing
(1) The Secretary of State may by regulations provide for a licensing body that applies to the Secretary of State under the regulations to be authorised to grant copyright licences in respect of works in which copyright is not owned by the body or a person on whose behalf the body acts.
(2) An authorisation must specify—
(a) the types of work to which it applies, and
(b) the acts restricted by copyright that the licensing body is authorised to license.
(3) The regulations must provide for the copyright owner to have a right to limit or exclude the grant of licences by virtue of the regulations.
(4) The regulations must provide for any licence not to give exclusive rights.
(5) In this section “copyright licences” has the same meaning as in section 116.
(6) Nothing in this section applies in relation to Crown copyright or Parliamentary copyright.
116C General provision about licensing under sections 116A and 116B
(1) This section and section 116D apply to regulations under sections 116A and 116B.
(2) The regulations may provide for a body to be or remain authorised to grant licences only if specified requirements are met, and for a question whether they are met to be determined by a person, and in a manner, specified in the regulations.
(3) The regulations may specify other matters to be taken into account in any decision to be made under the regulations as to whether to authorise a person to grant licences.
(4) The regulations must provide for the treatment of any royalties or other sums paid in respect of a licence, including—
(a) the deduction of administrative costs;
(b) the period for which sums must be held;
(c) the treatment of sums after that period (as bona vacantia or otherwise).
(5) The regulations must provide for circumstances in which an authorisation to grant licences may be withdrawn, and for determining the rights and obligations of any person if an authorisation is withdrawn.
(6) The regulations may include other provision for the purposes of authorisation and licensing, including in particular provision—
(a) for determining the rights and obligations of any person if a work ceases to qualify as an orphan work (or ceases to qualify by reference to any copyright owner), or if a rights owner exercises the right referred to in section 116B (3), while a licence is in force;
(b) about maintenance of registers and access to them;
(c) permitting the use of a work for incidental purposes including an application or search;
(d) for a right conferred by section 77 to be treated as having been asserted in accordance with section 78;
(e) for the payment of fees to cover administrative expenses.
116D Regulations under sections 116A and 116B
(1) The power to make regulations includes power—
(a) to make incidental, supplementary or consequential provision, including provision extending or restricting the jurisdiction of the Copyright Tribunal or conferring powers on it;
(b) to make transitional, transitory or saving provision;
(c) to make different provision for different purposes.
(2) Regulations under any provision may amend this Part, or any other enactment or subordinate legislation passed or made before that provision comes into force, for the purpose of making consequential provision or extending or restricting the jurisdiction of the Copyright Tribunal or conferring powers on it.
(3) Regulations may make provision by reference to guidance issued from time to time by any person.
(4) The power to make regulations is exercisable by statutory instrument.
(5) A statutory instrument containing regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”
The Consultation
After this Act was passed the Intellectual Property Office published a consultation document entitled  Copyright works: seeking the lost which canvassed views on the implementation of the primary legislation.  The IPO received a large number of responses from such institutions as the BBC, the British Library, collecting societies and other copyright owners' organizations and publishers as well as concerned individuals which can be viewed at Consultation outcome: Copyright: UK orphan works licensing scheme. The government responded to those submissions in Government response to the technical consultation on orphan works.

The Regulations
On 27 Oct 2014, shortly before the deadline imposed by art 9 (1) of the Directive was due to come into effect, Baroness Neville Rolfe, signed The Copyright and Rights in Performances (Licensing of Orphan Works) Regulations 2014 SI 2014 No 2863. Those regulations came into force on 29 Oct 2014. They implement the Directive and provide a licensing scheme that enables anybody to apply to the Intellectual Property Office to obtain a licence to use an orphan work (see the IPO's press release UK opens access to 91 million orphan works 29 Oct 2014).

The Scheme
The operation of the scheme is set out in a document entitled Orphan Works Licensing Scheme  Overview for applicants which was published on the day that the Regulations came into force.  Essentially, the Comptroller (the CEO of the IPO) will grant a licence to use an orphan work on behalf of the untraced copyright owner if he is satisfied that the applicant has made a "diligent search" to find that missing owner in return for an "application fee" and, if the licence is granted, a "licence fee". Details of the application and its outcome are entered on to a register that is kept by the IPO. If the copyright owner identifies himself to the IPO, he may stop the application if a licence has not yet been granted or claim the licence fee if it has. Guidance on the rights of rights holders is set out in Orphan Works Licensing Scheme Guidance for right holders.

A Closer Look at the Regulations
The statutory instrument consists of 14 regulations including provisions on citation. commencement and interpretation in regs 1 and 2 respectively.

An orphan work is defined by reg. 3 (4) as a "relevant work" (that is to say, "a work which is protected by copyright or a performance in respect of which certain acts constitute restricted acts" within the meaning of reg 3 (1)) "where, after a diligent search ....................., one or more of the right holders in the relevant work have either not been identified or, if identified, have not been located."

Reg 4 (2) provides that
"A diligent search must comprise a reasonable search of the relevant sources to identify and locate the right holders of the relevant work."
At the very least this must include the register and any database that is to be maintained by the Office for Harmonization in the Internal Market for the purposes of the Directive pursuant to art 3 (6) of that instrument. Where there is no record that a work is an orphan work in the register or databases reg 4 (3) (b) provides that it may include any relevant sources listed for that category of work in Part 2 of Schedule ZA1 to the Act which is inserted by The Copyright and Rights in Performances (Certain Permitted Uses of Orphan Works) Regulations 2014. Further guidance on sources may be provided by the Comptroller pursuant to reg 4 (4).

Once the Comptroller has received an application showing that a diligent search has been carried out he may grant an "orphan licence" pursuant to reg 6 (1). Such a licence must
(a) permit non-exclusive use of an orphan work in the United Kingdom;
(b) permit acts restricted by the copyright or sections 182, 182A, 182B, 182C, 182CA, 183 or 184 of the Copyright Designs and Patents Act 1988 in an orphan work for a term not exceeding 7 years;
(c) prohibit the grant of sub-licences;
(d) have effect as if granted by the right holder of the relevant work; and
(e) provide that the use of an orphan work does not affect the moral rights of an author under Chapter IV of Part 1 of the Act or the moral rights of a performer under Chapter 3 of Part 2 of the Act and treats those moral rights as having been asserted (see reg 6 (2)).
Reg 6 (5) permits the Comptroller to refuse a licence—
(a)  on the ground that, in his reasonable opinion, a proposed use or adaptation is not appropriate having regard to the circumstances of the case, including whether the proposed adaptation constitutes derogatory treatment of the work; or
(b) on any other reasonable ground.

The fee for such a licence must be 
"a reasonable licence fee for the period of the licence calculated with regard to relevant factors which shall include the level of licence fees which are achieved under licences for a similar use of similar relevant works which are not orphan works" (see reg 10 (1) (a))
This fee must be paid into a designated, ring fenced account for not less than 8 years from the grant of the licence pursuant to reg 10 (2). If the rights holder presents himself during that time he may claim that fee under reg 12 (4). The surplus of any unclaimed fees may be applied to fund social, cultural and educational activities under reg 13 (2).

Both rights holders and orphan licensees (or applicants for orphan licences) may appeal against the Comptroller's decisions. The former to the First Tier Tribunal "on the grounds that the authorising body has either acted improperly or failed to comply with its obligations under these Regulations" under reg 14 (1). The latter to the Copyright Tribunal under reg 14 (2).

Comment
It is fair to say that the British orphan works licensing scheme has not been welcomed universally. For particularly scathing criticism see Andrew Orlowski's UK.gov rushes out broken 'Orphan Works' system as EU Directive comes in 29 Oct 2014 The Register. As a licence under this scheme applies only to the UK its utility in relation to the internet is limited since a work licensed here may not lawfully be reproduced anywhere else. On the other hand, similar schemes already exist in a number of other countries and it is likely that more will follow.

Further Information
Should amplification or clarification of any point of this article be required please call me on 020 7404 5252 during normal office hours or message me through my contact form.

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