By Jake Goldenfein

Two days after the UK general election was called in April this year, the UK Digital Economy Act 2010 (DEA) became law.  Click here for our earlier review.  As parliament was to dissolve within a week, the DEA, passed in a process called ‘wash-up’ whereby parliamentary scrutiny is truncated for the purpose of pushing bills into assent before dissolution. The result was an extraordinarily far-reaching and controversial Bill being passed less than two months after its first reading speech. One victim of the abbreviated legislative process was Clause 43, whose provisions aimed at establishing an ‘orphan works’ scheme in the UK.

The definition of an ‘orphan work’ is in itself controversial, however it generally signifies an in-copyright work whose copyright owner cannot be located. These orphans are problematic as only copyright holders can authorise activities such as reproduction and communication to the public.

A work’s orphanhood prevents a range of activities, including digitisation for many cultural projects or even preservation. Copyright legislation has thus led to a ‘black-hole’ of cultural content in which it is estimated up to 40% of all cultural products exist.

Institutions wishing to utilise works with unknown copyright holders must engage in an often prohibitively expensive search for that rights holder to seek a license. The UK orphan works legislation would have introduced a compulsory statutory licensing regime, allowing a user to obtain a license for an orphan work after demonstrating a ‘reasonable search’ for the copyright holder, and paying an appropriate fee in escrow in case the rights holder later emerged.

There is quite a strong consensus and economic argument in favour of permitting orphan works to be collectively licensed. Such a scheme would assuage the growing and undesirable consequence of copyright law locking-up content whose entry into the public domain would have substantial public benefit. So why did this legislative attempt, as well as previous attempts in other jurisdictions, fail?

Make your legislative intentions clear

In his 2006 article, commentator Ian McDonald discussed the principles that should guide a legislative solution to the orphan works problem. He stated: ‘One touchstone is to clearly define the purpose for which any solution is devised.’ That criterion was insidiously absent from the UK legislative process. This is because orphan works schemes have applications beyond cultural products. There are innumerous contemporary works, orphaned due to digital distribution and copying on the Internet. Any digital text or image without patronage data or attribution is potentially orphaned (depending on the required rigour of the search for the rights holder). This creates problems for professional creatives (especially photographers) whose works are routinely reproduced without attribution or metadata identifying the copyright holder. These groups are legitimately concerned that an orphan works regime creates a mechanism for ‘big publishing’ to utilise compulsory licences for access to cheap images with the effects of reducing the market for new images, and eroding traditional rights to control many uses of copyrighted works.

Recent UK government reports (The Gowers Review of Intellectual Property 2006, Taking Gowers Forward 2007) recognised the problem of orphan works both culturally and commercially and suggested different regimes for dealing with the different uses. However, the proposed DEA provisions did not differentiate between commercial and non-commercial exploitation and the majority of government spin only focused on the liberation of cultural material. The British Library and BBC’s capacious archives were touted as the reason for implementing the scheme. Given the opposition to previous commercial schemes sought in the US, it appeared the UK was successfully garnering support for its scheme by pushing the ‘big culture’ line while quietly including the commercial applications in the same package.

This technique did not get by the UK lawmakers. Lord Howarth of Newport stated in the House of Lords Debate: ‘I am frankly puzzled as to why the Bill was not constructed and designed to show a clear distinction between the treatments of orphan works with little or no commercial value but important scholarly, educational or cultural value, and commercially produced material that is in copyright. It would have facilitated our analysis of it and made it far easier for us to give fair wind to the part that everybody in practice has agreed should be supported. But the two elements of the Bill have been so inextricably tangled up with each other that we have found ourselves in considerable difficulty.’

In reply, Lord Young of Norwood Green (attempting to pass the clause) stated: ‘On the point made by my noble friend about commercial versus non-commercial, the key point is to ensure fairness to rights holders. It is not an arbitrary distinction between commercial and non-commercial use; it is about ensuring that there is an adequate regulation of organisations running orphan works or extended licensing schemes.’

Of course the distinction between commercial and non-commercial is not abundantly clear, but the political spin employed by the government’s response emphasises the quantity of debate and refinement necessary for any orphan works regime to be considered acceptable to a majority

Leaving things to regulations

Another substantial contribution to Clause 43’s failure was its reliance on regulation. Virtually all substantive aspects of the regime would be left to the Secretary of State to implement through regulation. This included: the definition of orphan works, who could operate the licensing schemes, and how they would operate.

While all crucial elements, the lack of a real definition of orphan works in the primary legislation was especially troubling. Because a work is deemed orphan by the legislation, the rigour of the search required to identify the copyright holder is a critical indicator of where the equilibrium between users and rights holders lies. Leaving this to regulation sat uncomfortably with much of parliament, especially in light of the government’s push for flexibility

Orphans still out in the cold

The speed of the DEA’s legislative passage created a quagmire for Clause 43 that could not be overcome. The opponents of the clause argued that too many categories of orphan works were being dealt with indiscriminately. They sought clarification of how the legislative instrument would deal with different industries and different uses of orphan works. On the other hand, supporters of the clause argued that the number of different industries and uses for orphan works required the primary legislation to be vague, such that there would be sufficient flexibility in the regulations.

This was an impasse that the UK House of Commons could not surmount before the election and there was a general consensus that the DEA was an opportunity wasted. However, the Conservatives repeatedly indicated in the debates that this issue would remain high on their legislative agenda, suggesting it won’t be long before another proposed scheme emerges. Perhaps the failure of Clause 43 will compel the Australian Government to be direct, clear and comprehensive with any similar regime it considers in the future.

Jake Goldenfein (LLB(Hons)) is a graduate of the Melbourne Law School

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