The new Enterprise and Regulatory Reform Act brings with it a shakeup of the UK copyright regime. With many photographers and other commentators claiming that the changes in the law effectively dispose of copyright in some circumstances, this article explores what the Enterprise and Regulatory Reform Act could mean for copyright owners and third parties in relation to orphan works.

The Enterprise and Regulatory Reform Act ("the Act") received royal assent on 25 April 2013. Certain provisions will not come into force until later in 2013 or early 2014, pending secondary legislation laying down the details of how these provisions will operate in practice and how the transition from the old law to the new law will work.

It must therefore be borne in mind that, despite the strong reaction the Act has provoked, until details of the implementing, secondary legislation are known, we cannot know for sure the exact nature of how the Act will function in practice. However, this article attempts an explanation of the provisions of the Act relating to orphan works, together with some comments on how those provisions might affect copyright owners and those looking to exploit the copyright of others.

There are other provisions in the Act which change UK copyright law, but they are not considered here.

What is copyright?

Copyright exists in most literary, artistic, musical and dramatic works provided they are original. Copyright arises automatically, and unlike many other intellectual property rights, requires no registration. Copyright entitles the owner of a work to prevent others (subject to a few limited exceptions) from copying it or otherwise exploiting it, without his permission.

Orphan works

The section of the Act relating to orphan works is perhaps the one which has generated most controversy in the intellectual property world. An orphan work is a work which attracts copyright protection, but the owner of the work is unknown or cannot be located. Historically, orphan works have been unavailable for use by third parties because of the very fact that it was not possible to agree the terms of such use with the owner of the copyright. As there was no-one to ask permission of, it was assumed that permission was not granted and the (untraceable) owner of an orphan work retained the exclusive right to exploit that work.

The Act radically changes the law relating to orphan works. Under the new regime, orphan works will be available for use by third parties, provided they have undertaken a diligent search for the owner, with the result that they cannot be located.

The UK Intellectual Property Office has published an explanatory note detailing how the scheme for the licensing of orphan works will operate:

  • Anyone seeking to exploit an orphan work must first make an application to a government authorised independent body.
  • As mentioned above, a diligent search must be undertaken by the prospective user, to identify and locate the owner of the copyright. The search is not limited to the UK and must be verified by the authorised body.
  • Any licence granted will be non-exclusive, for specified purposes only and require payment of a royalty. This sum will be held by the authorising body to be transferred to the copyright owner if they are later located.

What does it mean?

The Act has provoked widespread outrage, particularly amongst the photography community and agencies and collective societies representing photographers, who view it as removing the owner's right to control what happens to his or her work, simply because they are unable to be identified. High profile figures, such as David Bailey, have expressed concern about the Act and its implications for copyright owners, particularly in the sphere of social media, because Twitter, Facebook, Instagram et al often strip the meta data from users' photographs, rendering them effective orphans, because no ownership details can be found.

Some of the key concerns depend largely on the text of the secondary legislation bringing the provisions into force. For example: what will constitute a diligent search? What does "specified purpose" mean? These ambiguities should be clarified in secondary legislation, but at the present time leave a degree of uncertainty which has sparked much of the debate.

Some of the potential consequences however, may not be addressed by legislation. There is the potential for an increase in litigation from UK, and possibly more pertinently, overseas copyright owners. In turn, the fear of their copyright being licensed without their permission may result in owners not using the internet to propagate their work, which goes against the objective of ensuring the UK is a place that fosters innovation and creativity.

There are of course counter-arguments, not least that we must await the secondary legislation before condemning the Act. The licensing of orphan works in this way may in actual fact improve the position of copyright owners as, if and when they are located, they can claim back their royalty fee from the authorising body. However undesirable the alternative, it would be naïve to think that under the current regime, third parties simply do not use orphan works because they do not know who the owner is. More likely is that third parties use such works without ever contemplating the rights of the copyright owner.

Furthermore, one of the proposals for the scheme is to create a register of orphan works which are the subject of licences, which would enable copyright owners to check to see if any of their works have been deemed to be orphan for the purposes of the scheme and to assert their rights accordingly.

Does the Act improve the rights of copyright holders where previously they may have been the victims of infringement without ever having known about it? Or does it make dangerous inroads into intellectual property rights and leave the UK open to criticism and potential law suits from the international intellectual property community? As the secondary legislation implements the provisions over the coming months, we will be able to see with more clarity how the scheme will operate in practice, and hopefully the concerns of photographers and other copyright owners will be addressed. IP Matters will report on updates as they become available.