Considering the ease with which EXIF and IPTC information can be removed from digital images lifted off the Internet, it’s easy to understand how a problem may genu-inely exist. If you’ve never performed a Google search on the copyright statement that ordinarily appears in your IPTC caption information, you may be in for a surprise. And, of course, the results of that search won’t reflect the number of images where the IPTC information—including your copyright statement—has been removed and the photograph has been posted on Facebook or some other social network site. When you also factor in the reality that advertisers and publishers are increasingly obtaining images from nontraditional sources like Flickr, it’s easy to see how an advertiser and/or publisher might have difficulty locating the copyright owner.
Getting To The Root Of The Problem
While Congress seeks a legislative resolution for orphan works, very little attention has been paid to the question of how the problem was created in the first place. Ironically, the problem was created by the same group that now seeks to fix the problem.
When Congress created and passed the last major enactment of the copyright laws, the Copyright Act of 1976, it brought about a fundamental change in the law. Prior to the 1976 enactment, or more precisely, for works created before January 1, 1978, copyright was an opt-in system. Artists and authors who wanted copyright protection had to register and mark their works with a copyright notice. With the 1976 enactment, Congress radically and fundamentally changed the system from an opt-in system into an opt-out system. Under the current enactment, all works are afforded copyright protection unless expressly dedicated to the public domain (a recent court decision involving the ability of the owner of the copyright in open-source software to enforce its copyright suggests that even voluntarily placing the work in the public domain without an express dedication is insufficient to eliminate copyright).
To further complicate matters, a subsequent, minor modification to the Copyright Act to conform to international copyright laws eliminated the requirement that works be marked with a copyright notice or copyright symbol (©). For all works published after March 1, 1989, the use of a copyright notice is optional. Together, these changes create an atmosphere where a person desiring to use a copyrightable work must assume that all works, marked or otherwise, are protected by Copyright Law.
The situation is even more ironic considering that congressional concern regarding the orphan works problem seems to have arisen from the Copyright Term Extension Act—which extended Copyright Protection for numerous works that were otherwise soon to enter the public domain—and a related Supreme Court case determining the constitutionality of that Act. Had Congress not sought to extend the term of exclusive rights afforded to copyright owners, many works would have entered the public domain, and their status as orphans would have been irrelevant.
Proposed Legislative Changes
Perhaps the greatest single change that the orphan works legislation would make to the current Copyright Act is to curtail the damages that may be awarded for infringement. Under the current Copyright Act, a court is permitted to award statutory damages provided the owner of the copyright timely registered the copyright. The proposed legislation would effectively preclude an award of statutory damages provided the infringer performed a “qualifying search” in an effort to locate the copyright owner, and the copyright owner would instead be entitled to receive “reasonable compensation.” The proposed legislation also defines “reasonable compensation” to be the amount that the owner and infringer
would have agreed upon, assuming they were both willing to negotiate a price and further assuming that no infringement had taken place.
In all fairness, the definition of “reasonable compensation” isn’t terribly different from the concept of a reasonable royalty, currently the judicially accepted measure of damages for instances of indirect infringement (e.g., where a photograph is used without authorization to advertise a product or promote a business, but the revenues that the infringer generates aren’t derived directly from the sale of the copyrighted work) of works that weren’t timely registered (e.g., where the infringement started prior to registration). The problem, however, rests with the cost of proving “reasonable compensation”; invariably, resolution of the issue will involve a battle of experts, creating a situation where the cost of proving reasonable compensation may exceed the amount ultimately awarded.
The proposed legislation also provides what amounts to a grant of immunity to nonprofit educational institutions, museums, libraries, archives and public broadcasting companies. In the case of orphan works, such institutions won’t be required to pay “reasonable compensation,” depending upon how the copyrighted work was used and provided that the institution ceases infringing after receiving notice from the copyright owner. When viewed in the abstract, it’s easy to understand why this provision has drawn the ire of some photographers, who believe that Congress is giving certain institutions carte blanche to commit infringement. However, the reality is that under the current Copyright Act, these institutions already have what amounts to immunity, provided the institution had reasonable grounds for believing that its use constituted a “fair use.”
Beyond limiting damages, the proposed legislation includes concepts that will undoubtedly keep the current generation of lawyers busy, and perhaps even the next generation. For example, the concept of a “qualifying search”—a search that the infringer would perform in an effort to locate the copyright owner as a predicate to limiting the infringer’s liability to “reasonable compensation”—requires that one perform a diligent search “based upon best practices” and may also include use of subscription-based services. Unfortunately, there are currently no established “best practices” for locating the unidentified copyright owners of copyrightable works.
Even the basic procedure outlined in the proposed legislation is problematic. To claim the benefit of the limitation on damages, an infringer must perform a qualifying search, provide reasonable attribution, assert the limitation as a defense in a court proceeding and provide evidence when required shortly after the commencement of litigation. However, the limitation on damages doesn’t apply if the infringer fails to engage in good-faith negotiation “regarding reasonable compensation” with the copyright owner and “fails to render payment of reasonable compensation in a reasonably timely manner after reaching an agreement” with the copyright owner. While reasonable minds may differ, it’s difficult to conceive of a scenario, short of a copyright owner maintaining entirely unrealistic expectations and demands, where an infringer could satisfy the requirements necessary to claim the benefit of the limitation on damages and not resolve the matter prior to litigation.