Précis - The European Council adopted the Orphan Works Directive on 4 October 2012, which provides a legal framework for the access and publication of orphan works. The Directive is a central element of the European Commission's intellectual property strategy adopted in May 2011.

What? Orphan works are works in which copyright exists but the right's holder cannot be identified or traced.  The Directive is designed to allow public bodies (including libraries, archives, universities, museums, cultural heritage institutions, public service broadcasters and similar organisations) to use orphan works in their collections via digitisation or online display for non-commercial purposes. Examples include public interest missions, preservation of works or the restoration of cultural heritage.

The Directive also contains specific criteria that the concerned institution must meet with respect to due diligence to identify the owner in the Member State where the work was originally published. The European Commission's strategy behind the Directive is to create and facilitate the mass digitisation of orphan works which will make EU-wide access to cultural content easier, with a limited risk of copyright infringement.

A key change in the newly adopted Directive since the proposal last year is allowing concerned institutions to generate revenue from the sale of orphan works if the revenue is used to cover the cost of digitisation. Whilst this does not exclude sponsorship, the European Parliament has used the example of goods being sold in a museum gift shop as a permitted revenue-generating activity.

So what? The adoption of the Directive is a forward-thinking legal framework, enabling cultural heritage, of otherwise stowed-away material, to be shared across the EU whilst taking full advantage the latest technology for the restoration and publication of work. If material is categorised as "orphan work" in one EU member state, it will share that status across all EU member states.

As well as the effect on public institutions, commercial organisations, such as ISPs, could benefit from the digitisation rules of the new Directive. These rules allow for commercial sponsorship such as financial support, initiatives, technology or services to enable access of relevant orphan works. 

Member States have two years from the Directive's dates of entry (exact date to be confirmed) into the EU Journal to transpose the Directive into national law. Currently in the UK there is no specific law addressing the licensing of copyright in orphan works. However, due diligence is carried out before the use of any orphan work with respect to the risks of a potential rights holder bringing forward any copyright claim.

As detailed in the Hargreaves and Hooper Reports (more details on the Hargreaves Report can be found in our October 2012 TMT e-briefing by clicking here), there are proposals for a digital copyright exchange ("DCE") to be used as a centralised hub for copyright exchange.  The UK Government also has plans (published by the Intellectual Property Office in June 2012) to draft legislation for the commercial and non-commercial use of orphan works. For example, the DCE may no longer be an opt-in choice for institutions and instead would be a portal where prospective users of orphan works must go to carry out a reasonable search for copyright owners, before an appropriate fee is paid and the work is digitised.