The Orphan Works Directive (“Directive”), which establishes a legal framework for improving access to and the digitisation of orphan works across the EU, is finally to hit the European statute book following its approval by the EU lawmakers. It is due to be published in the Official Journal by the end of 2012, but does it provide sufficient sanctuary?

Orphan works

Orphan works are works such as books, articles or films that are still within their relevant period of copyright protection but for which no rights holders have been found. This has always been a problem for users but, in the digital age, it poses a particular challenge as it prevents the necessary approvals being obtained for the digitising of that work.

Digitisation of orphan works is a crucial part of preserving and disseminating European cultural heritage as they represent a large part of Europe’s cultural institutions’ collections. The British Library estimates that 40 per cent of its copyright collections, up to 150 million works, are orphan works.1 Without the right to record or preserve these works digitally, they may never find a home and ultimately may be lost forever.

The Directive

The Directive applies to written and cinematographic or audiovisual works housed in publicly accessible institutions or works produced by public-service broadcasters before 31 December 2002. The works must be first published or broadcast in a Member State.

A work is considered an orphan work where the rights holder is not located following a diligent search. Institutions must carry out a diligent search by consulting appropriate sources in the relevant Member State (minimum standards are set out in the Directive). They must also keep records of all searches and provide certain information to a publicly accessible online database established and managed by the OHIM.

Once designated as an orphan work, institutions may only use that work for their public interest missions. They may generate revenues using the work but only for the exclusive purpose of covering the costs of digitisation and making the works available to the public.

Should rights holders be found later, the Directive provides for a system of compensation. However, each Member State shall have discretion to determine both the amount of compensation payable and how those payments should be organised.

Member States will have two years from the date of publication of the Directive to implement it into national laws.

Analysis

Supporters welcome the Directive as a pathway to the release of huge amounts of information and knowledge to the public for the first time, without significant legal repercussions. Research published in 2011 suggested the internet is responsible for 21 per cent of all economic growth experienced by the G8 countries in the preceding five years. Making such a vast amount of previously inaccessible information digitally available should boost both innovation and growth in the UK and Europe.

Critics of the Directive argue the restrictions on commercial use, the cost of the diligent search and the recordkeeping requirements act as a significant barrier to institutions, and potential private philanthropic partners, undertaking the mass digitisation initially required. Depending on how a Member State decides to implement the Directive, there is also potential for institutions to be liable for all use of the works where the rights holder is found at a later date. Such a financial risk, irrespective of the thoroughness of the diligent search, could have a significant impact on whether an institution decides to release any works under the Directive.

Orphan Works in the UK

A report on Digital Opportunity – A Review of Intellectual Property and Growth (the Hargreaves review),2 published in May 2011, recommended that “the Government should legislate to enable the licensing of orphan works”.

As a result, the UK Government has set out separate plans for laws on orphan works.3 The plans contain three key differences to the Directive: (1) they are aimed at all owners of orphan works, not just publicly accessible institutions; (2) both commercial and non-commercial exploitation is permitted; and (3) an appropriate fee is payable in advance. Payments will be set aside for any rights holders that are subsequently located.

Conclusion

It is not clear what the Government’s position will be following the approval of the Directive. Its current plans go some way to addressing the major criticisms of the Directive, and it does retain a significant amount of discretion as to its implementation. However, the Directive sets out specifically who can benefit and how they can do so and it does not provide for any widespread commercial use. It remains to be seen whether UK institutions will be prepared to part with any licence fee upfront where there are significant limitations as to the commercial gains they can make. Such differences could lead to a two-tier system in the UK depending on the possessor of the orphan work in question.

We wait to see how the Government intends to reconcile the differences between the planned legal frameworks. The policy statement released in July 2012 stated that it intends to introduce UK legislation as soon as possible. Once the draft UK legislation is released, there will be a period of consultation for stakeholders to communicate their views before the final wording is approved by the UK Parliament.