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Copyright Office Issues Notice of Inquiry on Orphan Works

October 22, 2012. The Copyright Office (CO) published a notice in the Federal Register (FR) that requests comments regarding "orphan works".

The deadline to submit initial comments is 5:00 PM on January 4, 2012. The deadline to submit reply comments is 5:00 PM on February 4, 2013. See, FR, Vol. 77, No. 204, October 22, 2012, at Pages 64555-64561. See also, CO web page for submitting comments.

Outline of this Story:

Background. This notice begins with the presumptions that there exists a problem, that a solution needs to be found, and that its 2006 proposal for legislation should serve as the starting point for discussion.

The CO has no statutory authority to write "orphan works" regulations. Hence, this notice of inquiry (NOI) is not a prelude to a rule making proceeding. This and subsequent NOIs may assist the CO in writing another repot to the Congress that recommends "orphan works" legislation.

The Congress has not enacted legislation that directs the CO to conduct this NOI. Moreover, the term "orphan works" does not appear in the Copyright Act. Also, the judiciary has not created any "orphan works" law via published opinions.

However, many large companies and their trade groups seek amendment to copyright law to reduce the ability of certain copyright holders to enforce their exclusive rights in "orphan works". The CO recommended passage of legislation in 2006, and some members of Congress then tried, but failed, to enact "orphan works" legislation in the 109th and 110th Congresses. Some members have continued to state that legislation remains a goal. Yet, there has been little activity or effort in the 111th and 112th Congresses.

The CO is neither new to this issue, nor an impartial investigator or neutral arbitrator. It is an enthusiastic advocate of "orphan works" legislation. It acts as an agent of "orphan works" law proponents, particularly certain members of the House Judiciary Committee (HJC) and Senate Judiciary Committee (SJC). Moreover, the current Register of Copyright, in her previous employment, testified in support of "orphan works" legislation in 2006 before a HJC Subcommittee.

This CO notice defines an "orphan work" as a work "for which a good faith, prospective user cannot readily identify and/or locate the copyright owner(s) in a situation where permission from the copyright owner(s) is necessary as a matter of law". The CO's 2006 recommendation, and subsequent bills, all provided that copyright holders' remedies for infringement of such works would be so diminished as to make legal action to enforce copyrights futile.

This CO notice states that "the problem of orphan works is pervasive", and that the "problem was exacerbated by a series of changes in U.S. copyright law", such as the elimination of the registration requirement in the Copyright Act of 1976.

None of the bills contained a definition of the term "orphan works". The use of the term by the CO is misleading.

The term is based upon a metaphor. That is, authors are parents. The books that they write, and the other works that they create, are their children. And, just as when parents die intestate and without surviving relatives their children become orphans, so too when authors die intestate and without relatives their copyrighted works become orphans. To this point, the metaphor is descriptive.

However, the goal of the CO and other backers of "orphan works" legislation is that it should extend beyond works created by now dead authors who left no heirs. The CO would extend the "orphan works" defense to any infringement action in which the infringer meets some minimal burden of proof regarding its own subjective belief that it cannot locate the rights holder. Works of recent creation, that have been registered with the CO, which have a living rights holder, and which are available for licensing or sale, which are not accurately described as "orphan", would nevertheless be affected by the CO's notion of "orphan works".

Moreover, the CO's notion of "orphan works", if enacted into statute, would have a devastating economic effect on many individuals and small businesses, and especially photographers, illustrators, and other visual artists, as well as some writers. It would also undermine the Constitutional goal of incenting authorship.

But, the CO's notice states that the lack of an "orphan works" exception "is difficult if not impossible
to reconcile with the objectives of the copyright system".

This CO notice also states that the "Sonny Bono Copyright Term Extension Act of 2008", which the Congress enacted in 1998, "extended the duration of copyright and increased the likelihood that some copyright owners would become unlocatable". That Act, which is also known as the CTEA, extended the maximum term from 75 to 95 years. See, Public Law No. 105-298.

Although, the proposed "orphan works" bills' effect would not be limited to either older works, or unregistered works.

It might be noted that Rep. Zoe Lofgren (D-CA) introduced a bill in 2003 that would have moved most works that are 50 years old into the public domain. Only those rights holders who made a filing and paid a $1 fee would have maintained their copyright. See, HR 2601 (108th Congress), the "Public Domain Enhancement Act", and story titled "Representatives Introduce Public Domain Enhancement Act" in TLJ Daily E-Mail Alert No. 688, June 26, 2003.

That bill was proposed by Professor Lawrence Lessig, who fought a long but unsuccessful constitutional challenge to the CTEA.

The CO and interest groups that lobby for "orphan works" legislation show no interest in Rep. Lofgren's proposal. Instead, they seek a bill that would affect works that are made today, that are registered, and that are on sale or available for licensing by their living owners.

In January of 2006, the CO released of its lengthy report [133 pages in PDF] titled "Report on Orphan Works", which advocated passage of a bill. See, story titled "Copyright Office Recommends Orphan Works Legislation" in TLJ Daily E-Mail Alert No. 1,302, February 2, 2006.

The primary author of the report, Jule Sigall, subsequently went to work for Microsoft. See, story titled "Jule Sigall Joins Microsoft" in TLJ Daily E-Mail Alert No. 1,510, December 27, 2006. His LinkedIn profile now lists him as "Assistant General Counsel -- Copyright".

Alignment of Interests. There are many large companies and interest groups that often seek amendments to copyright law, and oppose amendments sought by others. One might recall, for example, the significant efforts of both proponents and opponents of the PROTECT IP Act and SOPA earlier in this Congress. Similar divisions occur across a wide variety of copyright legislative issues.

However, the line up of the major organized interests on "orphan works" proposals has been much different. All of the most powerful copyright interests have either advocated "orphan works" legislation, or sat out the debate. If Congress were as influenced by money and organized interests as its critics often assert, an "orphan works" bill would have been enacted in 2006.

Opposition has come from groups with substantially less financial resources and organization in Washington DC. Many members of Congress and their staff had likely not previously heard of some of the groups that opposed "orphan works" legislation in 2006 -- such as groups representing photographers, medical illustrators, visual artists, and others.

Large companies, universities, and other entities who business models (profit or non-profit) rely on the use of works created by others have an interest in diminishing the enforceability of copyrights in works that they use. Hence, entities such as Google and the University of Michigan seek a new "orphan works" legal regime.

Companies that hold copyrights in works that are famous have little to fear from an "orphan works" defense because an infringer could not credibly assert that he could not locate the rights holder. For example, an infringer could not credibly assert that he did not know that Microsoft held the copyrights in its Windows operating systems. An infringer could not credibly assert that he did not know that a movie studio held the copyrights in its block buster movies. Nor could an infringer credibly assert that he did not know who held the copyright to the latest John Grisham best seller.

The same would be the case for the famous works distributed by the major record labels, electronic games companies, and other large owners, aggregators, and distributors. These companies, and their trade groups, have little reason to oppose legislation.

Yet, many of the products of these companies copy and incorporate the copyrighted photos, text, code or other components created by others. Hence, even though these companies are copyright holders themselves, they may stand to benefit from diminishing the rights of other copyright holders.

It is the copyright holders who are trying to make a living from creating works, and selling copies, or licensing use of, their works, and that would be deprived of enforcement rights when infringers copy their works without permission, and then hide behind an "orphan works" defense, that oppose, or seek to narrow, "orphan works" legislation.

Works that are not inherently subject to text based searches, such as photographs, are particularly vulnerable. Works from which authorship and ownership information can be stripped, and then republished on the internet without identifying data, are also vulnerable. Also, following the University of Michigan's assertion last year that numerous in print books and books with living rights holders are "orphan works" made all books vulnerable. The rights holders for such vulnerable works would suffer substantial loss from enactment of a statute such as that proposed by the CO in 2006.

Legislative History. Promptly after release of this recommendation, Rep. Lamar Smith (R-TX), introduced, in the 109th Congress, HR 5439, the "Orphan Works Act of 2006". Another version of this bill was made a part of HR 6052, the "Copyright Modernization Act of 2006". However, neither bill became law. See also, stories titled "House CIIP Subcommittee Holds Hearing on Orphan Works" in TLJ Daily E-Mail Alert No. 1,326, March 9, 2006, "Rep. Smith Introduces Orphan Works Act of 2006" in TLJ Daily E-Mail Alert No. 1,377, May 24, 2006, and "House CIIP Subcommittee Approves Orphan Works Act of 2006" in TLJ Daily E-Mail Alert No. 1,378, May 25, 2006.

For the 110th Congress, see HR 5889 [LOC | WW], the "Orphan Works Act of 2008", and S 2913 [LOC | WW], the "Shawn Bentley Orphan Works Act Of 2008". Neither bill became law. See also, stories titled "House IP Subcommittee Approves Orphan Works Bill" in TLJ Daily E-Mail Alert No. 1,762, May 7, 2008, "Senate Judiciary Committee Amends and Approves Orphan Works Bill" in TLJ Daily E-Mail Alert No. 1,767, May 15, 2008, and "Orphan Works Bills Discussed" in TLJ Daily E-Mail Alert No. 1,798, July 23, 2008.

Those bills failed in part because they were overbroad. That is, the bills would have affected far more than old works for with the creator died, without heirs. They would have impacted works that are available for purchase or licensing. Photographers, visual artists, and others made their views known to members of Congress. Consequently, the bills stalled.

While proponents have continued to lobby, and some members of Congress have continued to express an interest in legislation, there has been no effort serious effort to move bills through the Congress in the current or previous Congress. In addition to the failures the two previous Congresses, proponents outside the Congress pursued to alternative avenues for creating "orphan works" law. In the past month, both of these avenues reached dead ends.

Recent Litigation Developments. The CO's just released notice follows two recent developments. First, on October 4, 2012, Google and the Association of American Publishers (AAP) announced that they settled the copyright infringement action filed by five AAP members in 2005. See, story titled "Google and Five Book Publishers Settle 2005 Copyright Infringement Action" in TLJ Daily E-Mail Alert No. 2,464, October 18, 2012.

Google, the AAP and Authors Guild had attempted to use this litigation to impose a broad class action settlement agreement that was legislative in scope upon book publishing and digitization. It addressed many things, including "orphan works". However, it exceeded the proper role of class action litigation, the Department of Justice (DOJ) criticized it, and the U.S. District Court (SDNY) rejected it.

Google and the AAP gave up on finding a class action solution that could satisfy the District Court, and so reached a private settlement that does not require court approval, and creates no "orphan works" law.

Second, the same District Court (but a different Judge) issued an decision on October 10 in Authors Guild v. HathiTrust. Judge Baer dismissed a copyright infringement action against universities. Universities had announced a program that would make available online for free books under copyright that the universities designated as "orphan works". In essence, these universities asserted the authority to terminate exclusive rights of authors academic fiat.

The defendants acted as if there were an "orphan works" exception to the exclusive rights of copyright, or as if they sought to create such an exception. The Authors Guild sought a declaratory judgment that the defendants' program constitutes copyright infringement. It promptly marshaled evidence that the defendants had falsely declared as "orphan works" many books that have rights holders, are in print, and on sale. The defendants, likely foreseeing a judicial defeat, suspended their efforts to declare works as "orphan works".

The District Court issued no ruling on the merits. Rather, it held that this since the defendants suspended the program, this claim is not ripe for adjudication. Hence, it did not issue a ruling that creates any "orphan works" exception or defense. See, related story in this issue titled "District Court Disposes of Authors Guild's Book Scanning Case Against Universities".

Following the failure of various parties to create "orphan works" law by a back door legislative process, and the failure of universities to create "orphan works" law by court ruling, the CO is now returning to legislative efforts.

Questions Asked. The CO notice runs over seven thousand words, but asks few questions. The notice is mostly a history of recent administrative, legislative and judicial developments related to "orphan works", and the CO's interpretation of the issue. This notice restates the CO's arguments in favor of an "orphan works" legal regime, a summary of its 2006 report, a legislative history of the failed bills in the 109th and 110th Congresses, and the CO's narrative of the court cases against Google and its university partners.

This notice asks, "what has changed in the legal and business environments during the past few years" and "how has the legal landscape or legal thinking evolved in the past four years?"

It divides its questions into two subjects -- "mass digitization" of works under copyright, such as that underway by Google and certain universities, and "occasional or isolated use".

It should be noted that the recent litigation largely addressed mass digitization and books. In contrast, legislative efforts stalled in the 109th and 110th Congresses in significant part because of the opposition of individuals and small businesses concerned with the bills' impact upon copyrighted photographs and other visual works. The CO notice dismissively refers to this infringement as "occasional or isolated use".

With respect to "occasional" copying, the CO restates its proposal for legislation, and then states, "Please comment on the continued viability of the above framework in the case of occasional uses of orphan works. If there are other possible approaches, including approaches that might best be described as interim approaches, please explain the benefits and supporting legal authority in sufficient detail."

With respect to "mass digitization", the notice states, "Please comment on potential orphan works solutions in the context of mass digitization. How should mass digitization be defined, what are the goals and what, therefore, is an appropriate legal framework that is fair to authors and copyright owners as well as good faith users? What other possible solutions for mass digitization projects should be considered?"

The CO notice adds, "In responding to these questions, a party may wish to discuss a number of relevant topics, including for example: The merits of limiting remedies; the interplay between orphan works and fair use, section 108, section 121, or other exceptions and limitations; the role of licensing; the types of orphan works that should be implicated; the types of users who should benefit; the practical or legal hurdles to forming or utilizing registries; international implications; and the relative importance of the Register's plans to improve the quality and searchability of Copyright Office records."

Questions Not Asked. This CO notice does not ask certain pertinent questions.

For example, when revisions to the Copyright Act are enacted, it is usually in response, in whole or in part, to specific events, such as court cases in which huge damages have been awarded in situations that members of Congress find excessive, or courts have issued opinions that members of Congress finds in conflict with their own views. Such judgments and opinions evidence and define a problem for the Congress.

This notice does not ask commenters to identify the specific judgments or opinions that demonstrate the nature of the purported problem. That is, the CO does not ask commenters to name cases in which they have been ordered to pay huge damage awards for copyright infringement after they had conducted a diligent search for the rights holders, found none, copied, but still got sued.

As another example, the notice does not ask about the potential interaction of implementation of both an "orphan works" limitation on liability, and a new procedure that would divert certain copyright infringement claims into a new small claims litigation process.

The CO has open NOI proceedings on both "orphan works" and small copyright claims. The CO is examining various proposals for shifting small copyright claims -- many of which would also likely face "orphan works" affirmative defenses -- to a process without pretrial discovery or compulsory process, and decisions made in whole or in part on the basis of affidavits and pleadings.

This is significant because, if a defendant were to assert an "orphan works" defense, all of the information regarding that assertion would lie in the hands of the defendant. Without pretrial discovery, compulsory process, and adversarial trials, assertions of the "orphan works" defense would likely become unrebuttable. This would encourage both unauthorized copying of works of locatable authors, and bad faith assertions of the "orphan works" defense.

As another example, the CO notice does not ask about the availability of insurance policies that provide for defense of, and indemnification in, claims of copyright infringement involving purported unlocatable rights holders. Nor does it ask about the role of searches for copyright holders in such policies. Nor does it ask about the role of insurance companies in advising insureds regarding conducting searches for copyright holders. Nor does it ask how insurance has changed since the CO issued its 2006 report. Nor does it ask why legislation is warranted if insurance is available.

This CO notice solicits information that may aid the CO in advocating Congressional enactment of an "orphan works" limitation. This CO notice does not solicit information that might be used to rebut the CO's "orphan works" advocacy.

(Published in TLJ Daily E-Mail Alert No. 2,468, November 2, 2012.)