Copyright and Rights in Performances (Certain Permitted Uses of Orphan Works) Regulations 2014

Baroness Neville-Rolfe Excerpts

Thursday 23rd October 2014 Grand Committee

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[Baroness Neville-Rolfe]

That the Grand Committee do consider the Copyright and Rights in Performances (Certain Permitted Uses of Orphan Works) Regulations 2014.

Relevant document: 6th Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Neville-Rolfe) (Con)]

My Lords, I shall speak to these regulations and the Copyright and Rights in Performances (Licensing of Orphan Works) Regulations 2014 together. They introduce two ways in which orphan works can be copied lawfully and therefore made much more accessible to many more people. One is a UK-only licensing scheme, the other implements the EU directive on certain permitted uses of orphan works—the orphan works directive, as it is called.

There are literally millions of culturally valuable objects held in museums, libraries and archives that the public cannot get to see. Orphan works are creative works such as photographs, diaries, oral history recordings or documentary films that are in copyright but for which one or more copyright owner cannot be located. As copyright for published works generally lasts for the life of the creator plus 70 years, orphan works, which cannot be reproduced without permission, can remain unseen for a long time. At present, copyright for unpublished works can extend back to the Norman Conquest.

Being able to copy such works is important because otherwise the public have to travel to the archive where the work is held. A museum cannot make a copy to exhibit or to display on its website without the risk of legal action if the right holder reappears. Yet the taxpayer has to cover the cost of preserving these works.

The orphan works directive, which must be implemented by 29 October this year, will make it possible for cultural and heritage organisations to copy certain types of orphan works to display on their websites. It will give us access to Europe’s hidden cultural treasures from anywhere in Europe—for example, the German National Library. It does not allow commercial use, nor does it apply to photos or other standalone images at present.

The UK licensing scheme, provided for in the first set of regulations, will allow anyone to apply for a licence to use any type of orphan work, in any medium, for commercial or non-commercial use within the United Kingdom—for example, orphan documents and images in new books and orphan film clips in documentaries. Both these schemes have important safeguards built into them to make sure that they are fair to the owners of the orphan works if they are eventually found. They also allow for the use of so-called partial orphans, where only some right holders can be identified, with these regulations applying to those who cannot be found and permission gained from those that are known in the usual way.

To give a sense of how these measures will work in practice, I will look at an example from the National Records of Scotland collection of more than 150,000 maps and plans. The archive has an ink and colourwash plan of the village and harbour of Sandend dated 1893, part of a private collection from the Earls of Seafield. The surveyor, Hugh C Lowe, is not listed in the Dictionary of Scottish Architects and does not appear in death records. Without knowing when he died, the archive could not be sure that the work is out of copyright. If Mr Lowe died after 1943, the works could still be in copyright. Indeed, a large number of plans relating to Victorian engineering projects, such as the Forth bridge, cannot be copied.

As these orphan works are standalone images—not embedded in another work such as a book—the archive could not use the copyright exception provided by the orphan works directive. However, it could apply to the UK’s new licensing scheme. The archive would apply to the IPO for a licence online. Its application would show what it had done to find the right holders—what is known as a “diligent search”. This is an issue which has been much debated in this House. Merely stating that the work was found on the internet, without reasonable efforts to find right holders, would not be sufficient. The IPO will check that diligent searches are adequate.

To return to my example, if the museum wanted to adapt the Sandend plan, the IPO would consider whether this adaptation might be thought derogatory to the creator’s reputation. It is unlikely in this example, but if it were thought to be derogatory, the IPO would refuse a licence. Details of the work and a watermarked copy of the image—if it is a still image such as the Sandend plan—will be shown on the public register. This will enable right holders to check whether any of their works are being considered as orphans. Many orphan works are unpublished works created by non-professionals, and right holders are often unaware of having the copyright. That is why potential licensees need to look for the copyright owner, not the other way round.

Your Lordships have also debated fees in the past. In my example, the museum must pay a fee when it submits the application. This covers the cost of running the scheme. If its application is successful, it will have to pay a licence fee, which is passed on to the right holder should they reappear. The principles of transparency are important, and applicants will be able to see the cost of the licence fee before proceeding with the application. The licence fee will reflect the price of a similar non-orphan work being used in a similar way. For genuinely non-commercial use, such as display on a museum website, this will be minimal. Once the licence fee is paid, a licence for the specific use or uses requested will be issued in the name of the applicant. The entry on the orphan works register will be updated to reflect this. When the work is used, the IPO must be referenced as well as the creator, if their name is known.

Licences of varying lengths will be available as for equivalent non-orphan works. However, the longest term will be seven years. A reappearing right holder can claim the licence fee that has been held in trust for him or her by the IPO and no further orphan works licences will be issued for the work in question. If a right holder does not reappear, the licence may be renewed. Right holders can claim their fees up to eight years after a licence has been issued. After eight years, unclaimed fees will be used to offset the costs of setting up and running the orphan works scheme. Any surplus must be used for social, cultural or educational activity. Prospective licensees can appeal to the Copyright Tribunal about the licence conditions, the fee charged or a refusal to grant a licence. If the right holder feels that the IPO has acted improperly, he or she can appeal to the First-tier Tribunal.

Some potential users of both the directive and the licensing scheme would have liked to stretch further to other parts of Europe and indeed beyond—a sentiment that I share. Obviously, the EU can make laws only for its member states and the UK Government can offer licences for use only within the UK. Users are responsible for checking the legal position in any other jurisdiction if they wish to publish beyond these territories. I know that this is frustrating for cultural and commercial organisations, but the new measures are better than the current position, where no such lawful use is possible at all. Moreover, other countries are developing mechanisms to allow the use of orphan works, so licences or exceptions may be available elsewhere. The IPO is also exploring the possibility of reciprocal agreements with other jurisdictions to make this process easier, particularly among English-speaking countries. Constructive discussions are ongoing with Canada and with the United States.

Some noble Lords have expressed concern that the UK scheme ought not to crowd out non-orphan works. For example, there was a concern that people would use orphan works instead of non-orphan ones or commission new works because they thought that they would be free or cheaper than non-orphan works. This will not be the case because most users of the scheme will be looking to reproduce works of often unique historical interest for which there is no substitute.

The key point is that to license an orphan work you will need to conduct a diligent search, pay an application fee to the IPO—whether you are granted a licence or not—and pay a licence fee at market rate if you are successful. These safeguards mean that it will be easier to use non-orphan works instead of the orphan items. There is no application fee there and the price may be negotiable because there is a right holder to negotiate with.

I should perhaps comment on photographs. The Government are aware that the details of the right holder and other metadata can all too easily be stripped from a photograph on the internet, whether with intent to circumvent copyright or not.

The existence of legal means of reproducing orphan works does not itself cause this problem. It happens now and may be a criminal offence if done deliberately by a business. There are now swifter and affordable legal remedies in place to deal with such infringements, including the small claims track of the Intellectual Property Enterprise Court, previously the Patents County Court. For example, in the case of Sheldon v Daybrook last year the infringer agreed to pay £20,000 to the photographer for the continued and repeated unauthorised use of an exclusive photograph. The Government also continue to support the work of the Copyright Licensing Steering Group and the Copyright Hub, which are working on a voluntary code of practice for dealing with metadata.

Orphan works licensing could make things better for photographers, not worse. The requirement for and checking of diligent searches; the need to pay a licence fee; the ability to search the orphan works register; and the requirement to credit orphan works with the name of the creator—where known—and details of the IPO will make some unlawful use more obvious.

On pricing, the IPO has analysed a wide range of prices for non-orphan works being used in a wide range of ways. From these, it has calculated average prices which it will charge and has developed a pricing matrix that covers more than 5,000 different combinations of type of work and type of use. To give a couple of examples: the price of putting the Sandend plan on to the National Records of Scotland website would be 10p, as that is a non-commercial use. The price for publishing a 15-line orphan poem in an anthology with a print run of up to 500 would be £77.15, excluding value added tax. The IPO’s methodology was devised by a financial analyst and checked with the Competition and Markets Authority. These market-based prices ensure that orphan works do not distort the market for non-orphans, which I know has been a concern.

Another concern that has been raised by some is privacy. The introduction of the two orphan works measures should not impact on the privacy of living individuals. The directive allows unpublished works to be displayed on a cultural heritage organisation’s website only if they hold the work in their collection and if there is no reason to believe that the right holder would object. That means that the website can show only those works which are available to see if one visits the institution in person.

To conclude, the two measures before noble Lords are complementary, enabling different uses of culturally valuable orphan works: from striking photos in the RAF Museum, to films of life in India in the Northamptonshire Record Office, to the British Library’s unique sound recordings of oral history, which I have been involved with, to the scientifically valuable reports at institutions such as the Medical Research Council.

The measures respect copyright, protect right holders from likely and significant risks, and are trailblazing in offering the first online application system. They are good for right holders, cultural organisations and businesses, and good for citizens and consumers, who will be able to access more, and much more easily. I commend these regulations to the Committee.

--- Later in debate ---

That seems to be a good approach. Why did it not happen in this case?

[Baroness Neville-Rolfe]

My Lords, I thank noble Lords for their valuable contributions and comments. We always have lively debates on these intellectual property issues, partly because of the balance that one has to try to strike on the whole series of measures we have taken.

The noble Lord, Lord Howarth, welcomed the EU directive, as did I, and I in turn welcome the work he has done with the British Library. He is of course the noble Lord, Lord Howarth of Newport, which is where the Intellectual Property Office is located, so he is a friend for that reason as well. It was also good to hear of the interests of my noble friend Lord Bridgeman, who introduced a family perspective into this debate to complement and assist the perspective of national collections such as the British Library.

The noble Lord, Lord Howarth, argued that the scheme did not meet the needs of museums and that the balance was wrong. Clearly, I respect his view, but I disagree. We must protect copyright owners as well as the cultural sector, which was a point made by the noble and learned Lord, Lord Scott.

The noble Lord, Lord Howarth, also felt that the UK scheme was bureaucratic and expensive. As he said, I care a lot about regulation and bureaucracy and will be keeping a beady eye on this. As we have heard, there are views on both sides. As my noble friend Lady Buscombe said, we are slightly between a rock and a hard place. We have to find a balance and move forward on these important intellectual property issues. There were many years of debate when little was done, and it is good that we have moved forward in recent times. We now have a policy on orphan works coming into effect.

We are mindful of the need to make the scheme affordable to cultural institutions. We have developed the orphan works licensing scheme, including the approach to pricing, in consultation with museums, libraries and archives. However, the needs of potential users of orphan works need to be balanced with the rights of copyright holders.

The noble Lord, Lord Howarth, also argued that the diligent search requirements were onerous. I will come on to talk about those in a little more detail in view of the other points that were raised, but I say at this point that it is a fundamental principle of diligent search that it needs to be a diligent search for all relevant rights holders of any given work. That is only fair. Of course, many libraries, museums and archives are already doing this. The difference will be that when those searches do not result in rights holders being found, the search will not have been wasted.

Of course, the EU directive covered only the heritage and cultural orphan works, not commercial works. The UK scheme also covers a broader field than the original EU directive. Despite our efforts to make the directive wider during its negotiations, it does not allow us to regulate commercial use. That also partly answers the question of the noble Lord, Lord Stevenson, about why we had to have two statutory instruments, one under Section 2(2) and the other under domestic legislation, but we are of course debating them together.

The noble Lord, Lord Howarth, asked about licence fees. He said that if you multiply a minimal fee by millions of works, you get large sums.

[Lord Stevenson of Balmacara]

To go back to diligent search, if I am picking this up correctly from what the noble Baroness has said, the irony will be that the position in the order reflecting the incorporation of the EU measure has got specified minimum requirements for a diligent search, but there are no such requirements in respect of the commercial work. That is, I think, the cause of the unease that we all feel. Does she not recognise that unless a similar or even greater level of scrutiny is required, the danger will always be in the minds of the rights holders that they are not being dealt with fairly in the domestic issues?

[Baroness Neville-Rolfe]

I thank the noble Lord for his intervention. I think in fact that is not right. There will be rules for diligent search and indeed we have published guidelines on diligent search, which I am very happy to make available to the Committee. For exactly this reason, we are very aware of the interplay between the two schemes and that is something that we have been concentrating on during the extensive period of implementation and thinking about exactly how to implement this.

I would say that licence fees are not a tax. They are the price owed to the copyright holder. It is fair to pay for this, given that copyright is, in a sense, a property right, as has been said.

[Lord Howarth of Newport]

If the copyright holder does not turn up, why would the money not go back to the institution that has paid for a licence fee? After all, the institution is incurring the costs of conservation, cataloguing—all the overhead costs of preserving these orphan works—and it seems that it would be a more fruitful use of the money to let it rest with or return to the cultural organisation rather than simply be pocketed by the IPO and BIS.

[Baroness Neville-Rolfe]

I will come on to address that point, if I may. I thank the noble Lord for repeating it.

Going back to the other points made by the noble Lord, Lord Howarth, he talked about mass digitisation and blanket licensing because that, obviously, would help museums. In respect of the impact assessment, the non-commercial licence covers all non-commercial uses of a single work. The scheme is not intended for mass digitisation, as I think he knows, because it is only fair to search for all rights holders. He mentioned the review after a year. Of course, I hope I will be around on one side of the House or the other to assist in that review. Finally, he argued that we should consider an insurance approach. I am afraid that the insurance approach would not be lawful under EU law and there is no power provided under the Enterprise and Regulatory Reform Act, as I understand it, for that option.

The noble and learned Lord, Lord Scott, rightly talked about the property rights underlying copyright and the expropriation of property that could be at risk. I agree that the verification has to be proportionate.

The noble Lord, Lord Clement-Jones, raised a number of points. Perhaps I could take some of them in turn. He asked about the contribution to growth. We believe that a modest contribution to growth is likely. The estimates in the impact assessment are based on licensing twice the number of works in the Canadian scheme, which licensed 12,000 works. This is because we have roughly twice the population of Canada. That scheme covers unpublished works; our scheme covers unpublished works. Of course, our cultural, heritage and creative sectors are, happily, larger than Canada’s. Ours will be an online process, which I hope will be more efficient. The consultation respondents such as the CBI suggested that benefits are expected but they were not able to quantify them at this stage. The IPO’s running costs are, we believe, likely to be in the range estimated in the impact assessment and not too low for those reasons.

The noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Buscombe, asked about the diligent search process—I think that was the main thing that people were concerned about. I have already referred to the guidance, which is available. It is right that the main burden of diligent search is borne by the user and not the state. We are taking a proportionate approach, asking not just about where applicants have searched but what the results were, where they found the work and why they want to use it, as well as having the ability to ask to see evidence of that search.

The noble Lord, Lord Clement-Jones, wondered why details of the searches could not be available for us all to see. Again, we have to be proportionate. Details could include the personal addresses of the descendants or the creator. Publishing such data about individuals is not justified as a default option. It would be a bit like demanding to see passport applications in full in case your identity was being stolen. However, the registry of orphan works will contain sufficient details for a rights holder to check. Search technologies—this was another question—are set out in the diligent search guidance that was drawn up with stakeholders. Electronic means are not useful if the work has not been digitised, which may often be the case with old works.