Orphan works directive approved by EU Parliament

As IPKat readers will remember, back in June this year the EU Parliament and Council representatives agreed on a piece of draft legislation on orphan works (see the relevant reports by the IPKat and The 1709 Blog). 

Background to the EU initiative
As clarified in an official press release, the overall project is aimed at making it "safer and easier for public institutions such as museums and libraries to search for and use orphan works ... Today, digitising an orphan work can be difficult if not impossible, since in absence of the right holder there is no way to obtain permission to do so. The new rules would protect institutions using orphan works from future copyright infringement claims, and thus avoid court cases like that in the US, in which a Google project to digitise and share all kinds of books, including orphan works, was blocked on the grounds that the orphan works question should be settled by legislation not private agreements."
Indeed, in its 2011 Impact Assessment accompanying the proposal for a directive on certain permitted used of orphan works, the Commission justified the urgency of a legislative initiative on orphan works by referring, among the other things, to: 
(1) the situation created by the US Google Books Settlement [unlike Europe, in the US no orphan works legislation is currently being discussed], in particular the fact that in its original formulation orphan works were to be automatically included in the scope of the Google Books Settlement [cf the different features of the settlement achieved a few months ago by Google and relevant French publishers here]
(2) the need to obtain prior copyright permissions for the use of orphan works in Europe; and 
(3) the overall danger of a knowledge gap if orphan works could not become part of European Digital Library projects [the creation of large online libraries is to be seen against the backdrop of electronic search and discovery tools such as data mining and text mining].
Moreover, the creation of a legal framework to facilitate the digitisation and dissemination of works for which no author is identified or, even if identified, is not located, is believed to a be a key action of the Digital Agenda for Europe. 

The draft directive
The main objective of the proposed directive is indeed to create a legal framework to ensure the lawful, crossborder online access to orphan works contained in online digital libraries or archives operated by a variety of institutions when such orphan works are used in the pursuance of the public interest mission of such institutions and for non-profit purposes. 
This aim is to be achieved through a system of mutual recognition of the orphan status of a work.
Proposed sanction in case of
insufficiently diligent search
In order to establish this, libraries, educational  establishments, museums or archives, film heritage institutions and public service broadcasting organisations would be required to carry out a prior diligent search – in line with the requirements specified in the proposed directive (in particular through consultation of publicly accessible databases having a single entry point) - in the Member State where the work was first published. Once the diligent search established the orphan status of a work, the work in question would be deemed an orphan work throughout the EU, thus obviating the need for multiple diligent searches.
On this basis, it would be possible to make orphan works available online for cultural and educational purposes without prior authorisation, unless (or until) the owner of the work puts an end to such status. 
Although the draft directive has already been subject to criticism (in particular, with regard to the definition and practical application of the concept of 'diligent search'), the project seems destined to succeed.

The informal agreement
As mentioned above, last June the Parliament and Council representatives signed an informal agreement on a draft legislation on orphan works. The text reflected the provisions included in the Commission's proposal, but it added two relevant points:
(1) Should the right holder show up, he would be entitled to claim appropriate compensation for the use made out of his own work;
(2) Public institutions should be allowed to generate some revenue from the use of an orphan work (eg goods sold in a museum shop). All of this revenue would have to be used to pay for the search and the digitisation process.

Approval by the Parliament
Compensation payments won't make you rich
Yesterday, the proposed directive on certain permitted uses of orphans works was approved by the EU Parliament by 531 votes to 11, with 65 abstentions (the official press release is available here).
The Parliament included the points agreed by the Parliament and Council representatives. As regards compensation, the text now clarifies that this would have to be calculated case by case, taking account of the actual damage done to the author's interests and the fact that the use was non-commercial. This should ensure that compensation payments remain small.
Overall, the Commission's initial proposal has been subject to a few amendments, which you can found here. Some of them are indeed worthy of specific consideration. In this Kat's opinion, they are:
(1) Recitals 3, 4, 12, 14: 'author' has become 'rightholder';
(2) New Recital 8a: "It is essential to prevent the creation of new orphan works in the future, taking into account the ever-increasing production and dissemination of creative content online in the digital era. A clear indication on how to identify and locate the rightholders is required, as well as specific registration [what does this mean?], as a precondition for the full exercise of rights [what about Article 5(2) Berne?] . It is also necessary to create a solid framework for the acquisition of rights. The legal framework should be open to technical developments and sufficiently flexible to allow for future contracts between rightholders.";
(3) Article 3: the diligent search is no longer to be carried "for each work", but just "in good faith" and "prior to the use of the work";
(4) new Article 5(1a): "A work shall cease to be an orphan work only if all the rightholders to that work are identified and located." [this has the potential to be a bit tricky and, in practice, end up like this];
(5) new Article 8(1a): "This Directive shall be without prejudice to the Member States’ arrangements concerning mass-scale digitisation of works, such as those relating to out-of-commerce works." [interesting because of all the debates currently going on in EU Member States, notably the UK]

What’s next?
Ms Geringer
de Oedenberg
Polish Social-Democrat MEP Lidia Joanna Geringer de Oedenbergwhose report on the draft proposal was adopted by the legal affairs committee in March, was pleased with yesterday's result and stressed once again the benefits of establishing a EU legislative framework on orphan works: "This is clear legislation which gives public institutions legal certainty so they are not afraid of using orphan works. Public institutions are keeping all these works hidden as they are afraid that making them available without the consent of the rights holder could leave them facing trial and potentially millions of euros to pay so it is too risky. Those works sometimes make up to 70% of an institution's whole collection and they are at risk of being simply forgotten about."
Mr  Engström
However, MEP Christian Engström, of the Swedish Pirate Party, was not particularly impressed, and said that “This [directive] is not going to help to make the European common cultural heritage available the way it is drafted so I would urge everyone to reconsider because at the moment it simply isn't useful.” According to the Swedish MEP, Parliament should have adopted the bolder proposal prepared by the Commission.
Earlier this week, Commission's Vice-President Neelie Kroes, whilst acknowledging that both the proposal on orphan works and that on collective rights management (on which see earlier IPKat post here) are good steps forward to ameliorate EU copyright, highlighted that there are other problems beyond licensing or orphan works and that "we need to focus also on substantive copyright reform" (see the reports by the IPKat and The 1709 Blog).
Coming back to the orphan works directive, the next step in the adoption process is now approval by the Council, which is likely to happen some time soon. So: stay tuned!
Orphan works directive approved by EU Parliament Orphan works directive approved by EU Parliament Reviewed by Eleonora Rosati on Friday, September 14, 2012 Rating: 5

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