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This speech is also available in PDF Format.
By Gigi B. Sohn
President and Co-Founder, Public Knowledge
Presented to the Center for Intellectual Property
8th Annual Intellectual Property Symposium
University of Maryland University College
May 29, 2008
Thank you Kimberly, and thank you to everyone who makes this wonderful conference possible. This is my fourth or fifth year as a speaker, and what I enjoy most is talking with all of you and hearing your stories about how you and your institutions deal with copyright law every day. To me, you are the heroes on the frontlines of the battle for balanced copyright laws.
I had originally planned to talk about Public Knowledge's six point copyright reform plan, which is called "Six Steps to Digital Copyright Sanity: Reforming a Pre-VCR Law for a You-Tube World." The plan seeks to address the fact that our copyright law is completely out of touch with digital technology and user practices. Public Knowledge recommends six of what we consider "modest" reforms to copyright law to address this disconnect. If you want to learn more, just go to our home page at www.publicknowledge.org, and click on the big blue button that says "Six Point Program for Copyright Reform." With the able help of Professor Jennifer Urban and the Stanford Center for Internet and Society, we are working to turn the plan into actual legislation.
But events here in Washington over the past several months have caused me to focus on just one of those reforms today. I am referring to the current effort in Congress to pass a law that would ensure that libraries, museums, historians, book publishers, filmmakers, musicians and other artists can make use of works still under copyright when their owners cannot be found after a diligent search. These works are referred to as "orphan works," and estimates are that there are multiple millions of such works in the United States alone.
I want to talk today about what is being proposed in Congress, why it is important, and why, if we are able to iron out a couple of kinks in the legislation, the stakeholders represented here today should contact their representatives and Senators in Congress and urge them to support the bills. I also want to address some of the "FUD" -- fear, uncertainty and doubt, which is being spread about the legislation.
Why Do We Need Legislation?
Why do we have all of these orphan works in the first place? We have them because starting in 1978, copyrighted works no longer needed to be registered to get the full protection of copyright law. The consequence of this automatic copyright has been that it has become very difficult to find who owns the rights to a particular work. Even when works are registered, sometimes the owner is a company that goes out of business, or an individual who dies, or sometimes the registration is never updated. If you are a person or institution that wants to use a work under copyright but cannot find the owner, even after a thorough search, you are out of luck -- current copyright law provides the same onerous damages whether you are a good faith actor or a pirate. And these damages can range anywhere from $750 to $150,000 per infringement. So nobody takes the risk that the copyright owner will show up and drag him to court. As a result, orphan works are relegated to the dustbin of our culture.
The 2005 Copyright Office Proceeding and 2006 Report
Skip ahead to 2005. At the urging of libraries, museums, academics like American University Law Professor Peter Jaszi and advocacy groups like Public Knowledge, the Copyright Office sought public input on the orphan works problem and suggestions for how to deal with it. After receiving some 850 comments from a wide variety of stakeholders, the Copyright Office in 2006 issued a detailed report that showed that there was ample evidence that users were chilled from using works under copyright when they could not find the holder, and that as a result, millions of works were not being used.
The Copyright Office proposed a framework for solving this problem that has, for the most part, become the basis of the current legislation. Put simply, the framework is this: if someone seeking to use a work under copyright engages in a "diligent effort" to find the copyright holder but fails to do so, the user is protected from the normal damages provided under copyright law should the copyright holder reappear. Instead, the copyright holder would be entitled to "reasonable compensation," which is basically the price a willing buyer and a willing seller would agree to, accounting for market forces, such as the type of user and the nature of the use. For some works, particularly those that have been out of circulation for decades, that price is going to be low; maybe even zero. But for other works, particularly newer works and those that have some commercial value, the price may be fairly high. In any event, it is a win-win-win situation. The user gets to make use of the work, the owner gets paid, and the work once again becomes a living part of our culture.
Here is how we see orphan works legislation working in real world: in the vast majority of cases, the user does a search, uses the work, and that's it. In a few cases, the user does a search, the copyright holder reappears, demands a license fee, and the user pays it. And in the rarest of cases, the user refuses to pay the license fee, and the parties go to court, where a judge or jury decides whether the effort to find the copyright holder was diligent, and if so, what constitutes "reasonable" compensation.
Issues Raised by the Legislation
Definition of a Diligent Search
The critical question raised by the Copyright Office's framework and by the current legislation is this: what makes for the kind of "diligent effort" that causes the orphan works protections to kick in? The Copyright Office report suggested that copyright holder and user groups submit to it "best practices" for searches, giving the user discretion to follow whatever best practices are appropriate for a particular search. Because no two searches are alike, even for the same genre, let's say film, or music, rigid minimums or checklists would be a waste of resources and would not necessarily lead the user to find the owner of a work. The Copyright Office would be a mere repository of best practices, and would not develop them itself, or decide whose best practices are most appropriate. Nor should it, since it has no expertise in searching for copyright holders. In the very unlikely event that a case would go to court, the judge would look to these best practices and other evidence that the user engaged in a diligent search. Libraries, museums, independent filmmakers and Public Knowledge support this flexible standard, and are comfortable with giving the courts discretion to determine whether a search is diligent or not.
By contrast, large corporate copyright holders and orphan works users like movies studios and record companies are seeking more certainty and government involvement in the definition of a diligent effort. This is understandable. They have the money and resources to engage in every practice on a checklist, regardless of how expensive or fruitless. And as deep pocketed-users, they fear that a copyright holder will seek unreasonable compensation and bring them to court, where a judge or jury will hold them to a higher standard, resulting in the loss of orphan works protection and possibly huge damage awards.
So Congress must choose between a flexible definition of diligent effort that favors smaller users and a more rigid one that favors larger ones. We're working to find a middle ground that may include some very basic minimum practices, but keeps the Copyright Office out of the business of setting a precise definition of a diligent search.
"Notice of Use" Archive
Two other issues need to be resolved before orphan works legislation gets the full-throated support of smaller and non-profit institutional users. First, the House bill requires that users document their searches and submit them to what is called a "Notice of Use Archive" maintained by the Copyright Office. The stated purpose of this archive is to ensure that a user cannot make up a search after it has used a work. But there are costs to such an archive, including the cost of preparing the documentation, the cost of oversight and approval necessary for a government filing, and the cost of a filing fee, which the Copyright Office has estimated at $38 per page. Now imagine that you are a library or museum seeking to use hundreds, if not thousands of works. Those costs would certainly be prohibitive.
Public Knowledge takes the position that such an archive is unnecessary because its costs far outweigh the purported benefits -- deterring a one-in-a-million bad faith infringer from making up a search later. Even if they are aware of the orphan works defense, bad actors are unlikely to be familiar enough with best practices to be able to craft an after-the-fact diligent search that will fool a judge or jury and cannot be disproved by a copyright holder.
Should Congress nevertheless require an archive, it should make sure that it is not so burdensome and costly as to prevent users from taking advantage of the legislation. Any notice of use archive should require only that a user submit the work along with her name, address and phone number. The cost to file should be nominal. Copyright holders fearing that their works might be orphaned could check the archive occasionally to see if their works match those in the archive. Thus, the archive becomes a sort of lost and found. To avoid copyright trolls seeking a big payday, parties claiming ownership of a particular work would have to prove ownership before receiving information about the user.
Non-profit Institutional Safe Harbor
The final contentious issue concerns a special provision in the legislation that protects nonprofit institutional users like libraries, museums, public television stations and educational institutions. Both bills give those users protection from paying even reasonable compensation if they stop using the work. For example, the safe harbor would apply if a museum removed an orphan work from its website after a copyright holder reappears. This "safe harbor" is particularly important to institutions that may use hundreds or thousands of orphan works.
But there are two provisions in the safe harbor section that give nonprofit institutions pause. The first says that the safe harbor applies only if an orphan work is used "without any purpose of direct or indirect commercial advantage." But just because a museum may sell an exhibit catalogue that uses an orphan work in its gift shop doesn't necessarily mean that it is using the work for "commercial advantage." While indeed such sales are in commerce, they are used to fund the nonprofit educational mission of the institution, not for profit. A second provision requires that a nonprofit institutional user turn over any "proceeds directly attributable" to the use of the orphan work. This broad standard could make for all sorts of mischief, even if the institution immediately ceases using the work. For example, could a museum be forced to give up admission fees that might result from an exhibit that has an orphan work that it later removes?
Opponents of the Bill and their Fear, Uncertainty and Doubt
So there are still a couple of issues that need to be worked out before the orphan works legislation is ready for prime time. But an even greater challenge is the fear, uncertainty and doubt being raised by the book illustrators and photographers who are the principle opponents of the bill. As an organization that has spent the past six plus years stopping bad copyright bills, Public Knowledge knows that it is far easier to stop a bill than to pass one. But it is even more frustrating when that opposition is based on half-truths and unreasonable fears.
I am not unsympathetic to the special plight of visual artists. Their works are particularly susceptible to being orphaned even if they are registered, because the Copyright Office's registry is text based. So if you take a picture of the Capitol, it gets registered as "a picture of the Capitol." Not very helpful if you want to find the owner. It is for this reason that Public Knowledge has proposed, and the legislation includes, the development of marketplace based visual registries that would allow a user to scan a photo or illustration and find a match if the copyright holder uploads their work to a database. These registries could be a revolutionary advance for visual artists in terms of being compensated and protecting their works.
Photographers in particular, are susceptible to infringement, and in most cases, it doesn't pay for them or other visual artists to bring an infringer to court, as the cost of doing so exceeds the possible return. But to the extent visual artists have legitimate issues with the copyright registration system and access to justice, these have nothing to do with orphan works relief.
I want to address some of the FUD and argue that these small copyright holders have far more to gain than to lose from this legislation. There isn't enough time for me to address all of the myths surrounding this bill, so I've chosen the most common and outrageous ones. I've passed out a flyer that addresses these and other myths and in greater detail than I have time for today.
FUD Myth #1: The legislation would eliminate automatic copyright protection.
Nothing in the orphan works bills eliminates automatic copyright protection or requires registration. Indeed, if it did so, that would violate the Berne Convention, which is an international agreement that eliminates "formalities" such as registration. Whether their works are registered or not, copyright holders would still be compensated if they found that somebody who conducted a diligent search used their works.
FUD Myth #2: The legislation would give bad actors free license to rip off copyright holders.
This one really drives me nuts. The orphan works legislation does not make a copyright holder more vulnerable to bad actors, nor would it make infringement any easier for bad actors. A thief is a thief, and he would be highly unlikely to be able to craft a successful but phony diligent search. If a court finds the thief to be acting in bad faith, then the copyright holder would be entitled to the full panoply of damages under copyright law.
In addition, the legislation requires a user relying on the orphan works defense to plead the defense "with particularity" upfront in court and in the discovery process. This prevents him from hiding information or prolonging discovery. This "pleading with particularity" requirement means that a bad faith actor's lawyer would have to be willing to sign his name to a fraudulent document. So to envision this "license to steal" scenario, one would have to believe first that a bad actor would rely on an orphan works defense; that she would have the wherewithal to make up a diligent search; and that she could find a crooked lawyer to attest to that phony search. Seems to me that this one-in-a-billion scenario is not a good reason to keep millions of culturally significant works out of circulation.
FUD Myth #3: Since statutory damages are not available under the legislation, copyright holders will not get compensated.
First, a quick primer on copyright damages. Under the law, a copyright holder has a choice when she has been infringed. The copyright holder can sue the infringer either for actual damages or for so-called statutory damages. Since it is often difficult to quantify actual damages from copyright infringement, and because statutory damages can run from $750 to $150,000 per infringement, copyright holders almost always choose to sue for statutory damages.
The orphan works legislation does remove the specter of statutory damages in the event that a user engages in a diligent effort to find the copyright holder. But this does not mean that the copyright holder will not be compensated. If the copyright holder finds the user, then the copyright holder is entitled to a licensing fee equal to what she would have asked for in the marketplace, or what a willing buyer and a willing seller would have agreed to. And under the bill, if the user refuses to negotiate in good faith with the copyright holder, then the user risks being subject to statutory damages all over again.
FUD Myth #4: The bills would mandate registration of all visual art in expensive, private registries, and not registering a work would automatically orphan it.
As I discussed before, the bill provides for the creation of marketplace-based visual registries that would make it easier for users to find the owners of visual art. And let me emphasize that having users find owners is the real goal of this legislation. But while it might be wise for a visual artist to make use of the registry, nothing requires her to do so. Nor does failure to place a work in a visual registry automatically orphan a work. A user would still have to do a diligent search to find an owner, and might be able to do so without the help of the visual registry.
FUD Myth #5: The legislation will force copyright holders to constantly look for people using their works without their permission.
The problem with this argument is that this situation is no different than what copyright holders face today. But here are the key differences under the legislation: 1) the user is doing everything he can to find the copyright holder; and 2) if the user and the copyright holder find each other somehow, the user will pay the copyright holder a reasonable license fee. The most frequent complaint from visual artists is that they do not have the resources to bring everybody who steals their work to court. The legislation makes going to court a means of last resort, requiring good faith negotiation once the copyright holder finds the user. In addition, the legislation requires the Copyright Office to do a study on the feasibility of a copyright small claims court, which would ease the burden on small copyright holders seeking damages against bad actors.
A related point is warranted here. With all due respect to the visual artists who are seeking to stop this legislation, their work is highly unlikely to be the object of any diligent search or orphan works defense. The biggest users of orphan works are libraries, museums, historians and documentary filmmakers, and they aren't interested in using wedding photographs from 2003 or an illustration from a children's book that sold 3,000 copies. Instead, they are seeking to use historically and culturally significant material, much of which is older and which has fallen through the cracks of a law that once required registration and renewal.
FUD Myth #6: Huge corporations are driving this legislation, so it must be bad.
It's hard to convince people who think that corporations are inherently evil that legislation they support might be good. Regardless, large companies are mostly bit players in the orphan works drama. The original Copyright Office proceeding was encouraged by libraries, museums, small independent filmmakers and copyright reform advocacy groups, and the vast majority of comments filed at the Copyright Office in support of orphan works relief were from these groups and individuals. It is true that the American Association of Publishers supports orphan works legislation, but that is mostly in aid of their educational publishers, who want to use historical and other culturally significant works in their books. Google is also supportive of the bill, partly because it sees a business opportunity in the visual registries, but it has largely been inactive. Google had hoped that it and other companies like it might be included in the safe harbor. That did not happen, so it can hardly be said that Google is "driving" the legislation.
That's the FUD. Now let me tell you what the main opponents of orphan works legislation really don't like about it. I learned this in a meeting last week involving members of Congress and stakeholders. Opponents of the legislation don't like the fact that good faith users -- those who are willing to pay but can't figure out who to pay -- might be able to use their works without permission and without the maximum financial punishment. They want to control every use of their works, and whether or not they receive fair payment is beside the point. But what they forget is that copyright law does not give them control over each and every use of their works. Fair use and the first sale doctrine are just two examples of where copyright holders have no say over the use of their works by others, and in those cases, they don't get any compensation. By preferring to lock down culture, even if it means getting paid, these small copyright holders are no less copyright maximalists than the large corporate copyright holders that Public Knowledge has been battling for the past 6 years.
Call me crazy (and let me tell you, a number of these folks have called me much worse), but I think there are many reasons why visual artists should embrace this legislation. Its main purpose is to make sure that people who want to license their works try very hard to find them, and when they find them to pay them. Those works that are orphaned and unexploited will regain value once they are put back into circulation, which again benefits the copyright holder should they reappear. The legislation provides for the creation of optional visual registries that will make finding copyright holders easier (and by the way, the effective date of the legislation is delayed for visual works until two of these registries actually work). And it launches an inquiry into the problem that small copyright holders most often complain about -- access to justice when somebody does steal their work. Unfortunately, it appears that some of the organizations representing visual artists are looking past these benefits and using the orphan works legislation as a platform to air unrelated gripes about the current copyright system.
Among Public Knowledge's six copyright reforms, orphan works reform is perhaps the most modest -- it addresses a narrow but growing problem in a way that ensures that good actors and our culture benefit. To those who say that shortening copyright terms or somehow requiring registration are better reforms, I say -- you're absolutely right! Good luck with getting a law passed anytime in the next decade. There are plenty of members and staffers on Capitol Hill who believe strongly that even this one small exception to statutory damages turns copyright law on its head.
When looking at the merits of the orphan works legislation, a little perspective is in order: after 40 years of uninterrupted strengthening and lengthening of copyright laws, we have before us an opportunity for significant reform. The Senate bill awaits floor action, and the House bill will be passed out of the Judiciary Committee in the next several weeks. So while there a still some issues to be worked out, chances are very good that we could have a solid copyright reform bill passed in this Congress.
When it comes to the uphill battle of copyright reform, even baby steps should be encouraged. They build the foundation for bigger changes in the future. So I hope that I can count on you and your colleagues around the country to help make orphan works legislation a reality this year.
Thank you. I look forward to your questions.