A quick review of the Orphan Works legislation pending before the House:
Late on Friday September 26, 2008, the United States Senate passed the Shawn Bentley Orphan Works Act by unanimous consent. The bill has now been forwarded to the House of Representatives.
The “Orphan Works” Problem
Ever since the 1976 Copyright Act, the issue of orphan works – works whose owner cannot be identified or located — has become a significant issue. Copyrights that have been assigned to companies that are now out of business, copyrights that belong to deceased persons with no heirs or hard to locate heirs, copyrights sold amongst two parties with no registered assignment on record and copyrights that belong to unidentifiable persons all are all deemed “orphan” works.
Specifically, the issue of orphan works affects our cultural institutions. Museums and archives are sometimes hesitant to use certain photographs, film footage or other works unless the copyright owner is identifiable for fear of an infringement action. Museums and publications become stymied, as the Copyright Office has reported, in their creation of exhibitions, books and websites.
This problem can be traced directly to the Copyright Act of 1976 which relaxed the requirements for copyright protection. While on its face, the lack of registration requirement afforded easier copyright protection for creators, the lack of registration has created a vast number of works with no readily identifiable copyright holder. Additionally, the expansion of copyright duration equally contributes to the issue. As the Copyright office points out with the duration of copyright standing at life of the author plus 70 years, a 125 year copyright term is not out of the question.
The Legislative Solution
Both branches of Congress have each proposed their own version of an Orphan Works Act. (Senate – S. 2913l House – H.R. 5889). While a welcomed relief for many corporations, museums, archives and libraries, the Senate Bill, S. 2913, which has recently passed, has raised significant concerns among copyright creators throughout the country. For instance, the National Press Photographers Association recently forwarded an alert urging opposition to the bill stating that passage of the bill by the full Congress will “eviscerate any real copyright protections for our images and those who infringe upon our livelihoods.” This all means that House passage may meet with some additional resistance.
Some of the key components of the bill that will prove beneficial to museums include:
1. Limitation of damages to “reasonable compensation”. “Reasonable compensation” is the damage cap if the infringer takes advantage of the safe harbor provisions provided by the bill. “Reasonable compensation” is defined as the amount on which a willing buyer and willing seller in the positions of the infringer and the owner of the infringed copyright would have agreed with respect to the infringing use of the work immediately before the infringement began.
This eliminates statutory damages, actual damages and attorneys fees from the equation – good news for museums.
2. Safe Harbor Provisions. Although there are certain intricacies involved in the bill, in general terms, in order to take full advantage of the damage limitation, an infringer needs only prove by a preponderance of the evidence that before the infringement begins, the infringer (or agent) :
- performed and documented a qualifying search in good faith for the owner of the infringed copyright
- was unable to locate the owner of the infringed copyright or provided attribution in a reasonable manner under the circumstances to the owner of the copyright, if known to a reasonable degree if certainty, based on the qualifying search
3. Additional insulation for museums, libraries educational institutions,
archives, and public broadcasting entities
- the infringement was performed without purpose of direct or indirect commercial gain
- the infringement was primarily educational religious or charitable in nature; and
- after receiving notice of the claim and good faith investigation, infringement ceased.
There is a minor exception allowing for a small degree of damages of an actual profit is earned that is directly attributable to the infringement.
4. Effective Date. The bill theoretically covers infringements on the earlier of either (i) January 1, 2009, or (ii) 30 days after the date the Copyright office certifies 2 independent searchable electronic databases allows those searches, or (iii) January 1, 2013.
Potential Legislative Problems
While the above provisions are beneficial to museums, here are some of the hurdles that may slow the passage:
1. Coerced registration
The effect of the legislation is to force creators to register copyrights – something not required under the 1976 Copyright Act. Without registration, a creator risks an infringer taking shelter in the safe harbor regulations and severely limiting the available damages, costs and attorneys fees. This can put professionals and private persons alike at significant disadvantage in the realm of copyright protection. Without registering in the new databases, professional photos and vacation photos could easily be termed orphaned works. The Copyright Office has itself suggested that the failure to file = automatic orphan work.
2. International Impact
The bill may very well violate several intellectual property treaties. By imposing registration as a means for protection, the bill may violate the Berne Convention. Additionally, a violation of Agreement on Trade-Related Aspects of Intellectual property 3 step analysis to allow limitations of exclusive rights:
3. Allows infringer to Copyright Derivative Work
The bill, incredibly, prohibits a copyright holder from stopping the use of a derivative work by the infringer. If an infringer creates a derivative work, the infringer will only need to pay a fee to the copyright holder. The infringer will NOT be enjoined from using the derivative work.
While the act may actually provide some insulation for museums who execute a diligent and reasonable search for the copyright holder, the bill may need some tweaking to pass the House and provide the relief that is needed to address the orphan works problem. Stay Tuned!!