by Mary Anne Reid
Australian Copyright Council
The UK Government, in its response to the Hargreaves Review of the country’s intellectual property framework, has set what appears to be a cracking pace for the introduction of certain reforms. This month’s feature looks at orphan works and extended collective licensing, which are scheduled to be among the first cabs off the regulatory rank.
Action: UK Government to bring forward proposals for an orphan works scheme (by November 2011)
Australia will watch these proposals from the UK Government keenly, as there is a push here, as in Europe and North America, to find a legislative solution to the problem of so-called ‘orphan works’. These are copyright works (books, letters, photographs, films etc) whose owners cannot be located by those wanting to use the works in some way, particularly collecting institutions such as libraries, museums and archives.
The Hargreaves Report divides the issue into two distinct categories – use of individual orphan works, and mass licensing of collections which include some orphans :
• Licensing individual works: “That would involve Government granting an authorisation to deal in a specific work where the copyright owner has not been found or identified after a diligent search. Should an owner later come forward, future use of that work from that point would be subject to negotiation, but there would be no liability for past use beyond any licence fee set by Government or its appointed agent.” 
• Mass licensing: In the case of licensing a collection of copyright works with some orphans, Hargreaves recommends an extended collective licensing scheme based on the Nordic model. Following a diligent search (to ensure the supposed orphans are not in fact owned and opted out of the collective licensing scheme), a licence would be issued by the appointed collecting society. Any fees paid would be held by the collecting society until the owner was identified, or a reasonable period of time elapsed, in which case the monies would be used for social or cultural purposes.
While Hargreaves recommends a “nominal” fee for the use of orphan works in most cases, the UK Government has opted for a different approach by advocating “licensing at market rates for commercial use” of orphan works . This variation is at least in part a response to the concerns of photographers and visual creators, whose works are most vulnerable to being ‘orphaned’ through distribution on the internet, and who worry that an orphan works scheme may provide an easy ‘out’ for commercial organisations looking to use works without payment.
Although it broadly supports most of the Government-backed Hargreaves reforms, the UK’s Association of Photographers issued a media release in August stating that it was “very concerned” about Government support for licensing of orphan works for commercial uses: “We, and others, have been against [this] from the start as it undermines the creators’ marketplace and makes a mockery of existing licensing arrangements.” 
Concern over commercial use is not confined to UK photographers. In May this year the European Commission’s proposal for a Directive on uses of orphan works limited the proposed uses to certain organisations (e.g. libraries and archives) and to cultural and educational uses. By contrast, the orphan works scheme that has existed for some years in Canada does allow for commercial use (as do proposals for orphan works reform in the United States).
Another pressure point over orphan works is the concern that reform will become a Trojan horse for mass digitisation – without the permission of copyright owners. To this way of thinking there is a very real potential that organisations seeking to digitise their collections will use orphan works schemes to overcome what is in fact a problem of rights clearance (e.g. for out-of-commerce works) rather than one of orphan works. Professor Hargreaves’ division of orphan works issues into licensing of individual works and “mass licensing of collections with some orphans” would seem to give credence to this concern.
Orphan works in Australia
None of the exceptions in Australian copyright law allow the use of a work without permission merely because it is an orphan work. There is an exception that allows the publication of old unpublished orphan works held in libraries, provided certain conditions are met. And in some cases, an exception may be more likely to apply if the work is an orphan work – for example, section 200AB (for educational institutions, libraries, collecting institutions and people with a disability).
Australian governments of both stripes have had orphan works reform on the agenda (since 2006) and it is likely that this will be one of the issues addressed by the Attorney-General’s proposed review of copyright by the Australian Law Reform Commission.
Action: UK Government to bring forward proposals for extended collective licensing (by November 2011)
The Hargreaves Report also calls for an efficient system to allow mass digitisation of collections of copyright works: “Digital technology permits mass digitisation so that whole collections – such as national libraries, the BBC, archive and private collections – may be made available online. But we are effectively prevented from taking this opportunity because of the transaction costs of assembling all the necessary permissions. The proposed Digital Copyright Exchange would alleviate this problem, but there would still be issues with owners of a small number of works in a collection who had not, possibly by oversight or because they are unknown, put those works into the system.” 
The remedy supported by Hargreaves is a system of extended collective licensing (ECL) based on the Nordic model, where a collecting society with a critical mass of members in a particular sector (e.g. representing a majority of literary authors in a particular territory) is granted the right to licence the works of non-members in that sector, unless they specifically opt out of the ECL scheme. Hargreaves qualifies his proposal by saying that it should not be imposed on a sector as a compulsory measure “where there is not call for it”, and that individual creators should always retain the ability to opt out of ECL arrangements.” 
In effect, this employs the same modus operandi as the Google Books Settlement (which was recently rejected in the courts in the US), in that it requires copyright owners to ‘opt out’ rather than ‘opt in’ to the licensing scheme.
The UK Government has said it intends to “bring forward proposals for extended collective licensing to benefit sectors that choose to adopt it” and, in doing so, will look to “maximise the benefits it could bring to smaller creative firms and individual creators in particular.” 
Proposals on both orphan works and ECL are due from the Government by November 2011. The real test will be in the detail of the proposals, which must answer some very fundamental – and very hotly contested – questions on how to balance the rights of copyright owners and copyright users.
[1-2] Digital Opportunity: A Review of Intellectual Property and Growth, Professor Ian Hargreaves, May 2011, p. 39.
 Government Response to the Hargreaves Review of Intellectual Property and Growth, August 2011, p. 6.
 The Association of Photographers Ltd, Media Release, 8 August 2011, p1.
[5-6] Digital Opportunity: A Review of Intellectual Property and Growth, Professor Ian Hargreaves, May 2011, p. 37-38.
 Government Response to the Hargreaves Review of Intellectual Property and Growth, August 2011, p. 7.