[House Hearing, 109 Congress]
[From the U.S. Government Printing Office]


 
                       REPORT ON ORPHAN WORKS BY 
                          THE COPYRIGHT OFFICE

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON COURTS, THE INTERNET,
                       AND INTELLECTUAL PROPERTY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 8, 2006

                               __________

                           Serial No. 109-94

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov



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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California        ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee        SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah                   MAXINE WATERS, California
SPENCER BACHUS, Alabama              MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina           WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana          ROBERT WEXLER, Florida
MARK GREEN, Wisconsin                ANTHONY D. WEINER, New York
RIC KELLER, Florida                  ADAM B. SCHIFF, California
DARRELL ISSA, California             LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona                  CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana                  DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas

             Philip G. Kiko, General Counsel-Chief of Staff
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

    Subcommittee on Courts, the Internet, and Intellectual Property

                      LAMAR SMITH, Texas, Chairman

HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
ELTON GALLEGLY, California           JOHN CONYERS, Jr., Michigan
BOB GOODLATTE, Virginia              RICK BOUCHER, Virginia
WILLIAM L. JENKINS, Tennessee        ZOE LOFGREN, California
SPENCER BACHUS, Alabama              MAXINE WATERS, California
BOB INGLIS, South Carolina           MARTIN T. MEEHAN, Massachusetts
RIC KELLER, Florida                  ROBERT WEXLER, Florida
DARRELL ISSA, California             ANTHONY D. WEINER, New York
CHRIS CANNON, Utah                   ADAM B. SCHIFF, California
MIKE PENCE, Indiana                  LINDA T. SANCHEZ, California
J. RANDY FORBES, Virginia

                     Blaine Merritt, Chief Counsel

                         David Whitney, Counsel

                          Joe Keeley, Counsel

                          Ryan Visco, Counsel

                    Shanna Winters, Minority Counsel


                            C O N T E N T S

                              ----------                              

                             MARCH 8, 2006

                           OPENING STATEMENT

                                                                   Page
The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, and Chairman, Subcommittee on Courts, the 
  Internet, and Intellectual Property............................     1
The Honorable Howard L. Berman, a Representative in Congress from 
  the State of California, and Ranking Member, Subcommittee on 
  Courts, the Internet, and Intellectual Property................     2
The Honorable Zoe Lofgren, a Representative in Congress from the 
  State of California, and Member, Subcommittee on Courts, the 
  Internet, and Intellectual Property............................     4
The Honorable Darrell Issa, a Representative in Congress from the 
  State of California, and Member, Subcommittee on Courts, the 
  Internet, and Intellectual Property............................     4

                               WITNESSES

Mr. Jule L. Sigall, Associate Register for Policy and 
  International Affairs, Copyright Office of the United States, 
  The Library of Congress
  Oral Testimony.................................................     5
  Prepared Statement.............................................     8
Mr. Allan Adler, Vice President for Legal and Government Affairs, 
  Association of American Publishers, Inc.
  Oral Testimony.................................................    18
  Prepared Statement.............................................    20
Mr. David P. Trust, Chief Executive Officer, Professional 
  Photographers of America, Inc.
  Oral Testimony.................................................    25
  Prepared Statement.............................................    27
Ms. Maria A. Pallante, Associate General Counsel and Director of 
  Licensing, The Solomon R. Guggenheim Foundation
  Oral Testimony.................................................    33
  Prepared Statement.............................................    35

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Howard Berman, a 
  Representative in Congress From the State of California, and 
  Ranking Member, Subcommittee on Courts, the Internet, and 
  Intellectual Property..........................................    53
Prepred Statement of the Honorable Zoe Lofgren, a Representative 
  in Congress from the State of California, and Member, 
  Subcommittee on Courts, the Internet, and Intellectual Property    54
Prepared Statement of the Honorable Maxine Waters, a 
  Representative in Congress from the State of California, and 
  Member, Subcommittee on Courts, the Internet, and Intellectual 
  Property.......................................................    55
Amended ``Appendix'' to the Prepared Statement of Maria A. 
  Pallante, Associate General Counsel and Director of Licensing, 
  The Solomon R. Guggenheim Foundation...........................    56
Letter and accompanying paper from the Advertising Photographers 
  of America (APA)...............................................    59
Prepared Statement of the American Society of Composers, Authors 
  and Publishers (ASCAP).........................................    83
Letter and proposed legislative revision from the Artists Rights 
  Alliance (ARS).................................................    89
Prepared Statement of Broadcast Music, Inc. (BMI)................    94
Prepared Statement of Reed Stager, Executive Vice President, 
  Digimarc Corporation...........................................    95
Prepared Statement of the Directors Guild of America (DGA).......   100
Letter from the Graphic Artists Guild............................   105
Letter from the Illustrators' Partnership........................   107
Prepared Statement of Association of Independent Video and 
  Filmmakers (AIVF), Doculink, Film Arts Foundation, FIND (Film 
  Independent), International Documentary Association (IDA), IFP 
  (Independent Feature Project), National Alliance for Media Arts 
  and Culture (NAMAC), National Video Resources (NVR), and Public 
  Knowledge0.....................................................   112
Letter to the Honorable Zoe Lofgren, a Representative in Congress 
  from the State of California, and Member, Subcommittee on 
  Courts, the Internet, and Intellectual Property from Lawrence 
  Lessig.........................................................   123
Prepared Statement of Jerry Brito, Legal Fellow, Mercatus Center 
  at George Mason University, and Bridget Dooling, Editor-in-
  Chief, Federal Circuit Bar Journal.............................   132
Prepared Statement of Gerard Colby, President, National Writers 
  Union..........................................................   133
Letter from David Sanger, President, the Stock Artists Alliance 
  (SAA)..........................................................   136


                       REPORT ON ORPHAN WORKS BY 
                          THE COPYRIGHT OFFICE

                              ----------                              


                        WEDNESDAY, MARCH 8, 2006

                  House of Representatives,
              Subcommittee on Courts, the Internet,
                         and Intellectual Property,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:08 p.m., in 
Room 2141, Rayburn House Office Building, the Honorable Lamar 
Smith (Chairman of the Subcommittee) presiding.
    Mr. Smith. The Subcommittee on Courts, the Internet, and 
Intellectual Property will come to order.
    Thank you all for your interest and for your in presence in 
being here. We will open with opening statements and then 
proceed directly to hear from our witnesses today as well.
    I recognize myself.
    Today's hearing is an oversight hearing on the Copyright 
Office Report on Orphan Work. The orphan works issue arises 
when someone who wants to use a copyrighted work cannot find 
the owner no matter how diligently they search. The owner may 
have moved several times, died, or in the case of corporate 
owners may have changed names or been bought out. This leaves 
the potential user with no options even though they want to do 
the right thing by paying a reasonable royalty to the copyright 
owner of a photograph, book, or other work.
    Responding to this issue, the Copyright Office has released 
the adjusted statutory language that they believe will address 
the orphan works issue in a balanced manner. I have heard from 
a number of interested parties on the orphan works issue and 
the language suggested by the Copyright Office from potential 
owners and users of orphan works to others who are merely 
concerned about the impact of any new orphan works legislation 
on existing statutes.
    I have long been a proponent of strong copyright 
protections. So I look forward to hearing from the witnesses 
today who are seeking to address the orphan works issue by 
limiting the remedies for specific uses of orphan works. It is 
important that copyright owners still receive a fair royalty 
under an effective system if the owner does reappear to claim 
ownership of his work.
    Some copyright owners, such as photographers, illustrators, 
and artists have unique business issues that are different from 
those of other copyright owners. I look forward to hearing of 
their specific concerns and whether or not this adjusted 
language has adequately addressed them or can be modified to do 
so in either statutory or report language. Numerous interested 
parties have been meeting in numerous areas to develop 
modifications to the copyright office language in order to 
better protect their interests. The successful completion of 
such negotiations will enable us to move an orphan works bill 
in the coming weeks.
    Moving a bill in Congress does not require unanimity. 
Parties who feel that they can simply stop the legislative 
process by failing to negotiate in good faith or at all tend to 
be ignored. Maybe I should say left behind.
    I look forward to working with other Members of the 
Committee and interested parties to advance a near consensus 
bill on the issue at hand.
    That concludes my testimony. The gentleman from California, 
Mr. Berman is recognized for his.
    Mr. Berman. Thank you very much, Mr. Chairman, for 
scheduling the hearing on the Copyright Office's report on 
orphan works. Unfortunately for me, perhaps fortunately for you 
and the other Members, I am going to have to leave a little 
early because of another hearing in a different Committee. So I 
would like to use the opening statement to raise some 
questions.
    I want to start out by commending the Copyright Office on 
their legislative proposal. It's united a number of owner and 
user groups in search of a solution to the orphan works 
problem. The recommendation goes a long way to meeting users' 
concerns of making beneficial uses of works when copyright 
owners can't be found. This allows our society to be enriched 
by access to works that otherwise and most likely would be 
lost. All of this must coexist against the backdrop of 
continuing to maintain the incentive for creators to pursue 
their art.
    So when it comes specifically to the category of owners of 
visual arts work such as photographers and illustrators, which 
seems to be a group that is most concerned about this proposal, 
I want to raise some questions about the affect of the 
Copyright Office proposal on an orphan works provision.
    Currently, a user can begin a search by typing in search 
terms in a registry, be it in the Copyright Office or from 
musical works by contacting BMI or ASGAP. There is no 
collective registry, however, for photographic or illustration 
information which makes owner information in many instances 
almost impossible to find. According to this proposal, if a 
reasonable search and attribution allows one to qualify for a 
limitation of on remedies, will most owners of photographs be 
required to forego their normal remedies when the information 
can't be found? That issue shy is to me the large elephant 
remaining in the room.
    Is the current copyright system layered by the orphan works 
provision adequate to protect visual arts owners. The most 
basic question seems unanswerable. Where does one even begin 
the process of finding the owner information for most 
illustrations or photographs? No doubt this question may be 
addressed in part by some non-legislative solutions or possibly 
legislative in that an appropriation is required.
    For example, when I wrote to the Copyright Office about the 
orphan works issue, I requested that they explore the viability 
of creating an accurate, updated, and electronically searchable 
data base of copyright ownership, how much would such a data 
base cost. Currently on the Copyright Office's search file, 
unless one has a registration number, the title, or the 
author's name, one can't search for the work. Even with that 
all that information, the search feature is extremely 
rudimentary. With photographs, however, where often times there 
is no title of the work, there is currently no mechanism to 
search a description of the work and the possibility of 
matching the work is limited since there is no thumbnail of the 
photograph.
    Granted, part of the problem has been exacerbated by 
attempts to accommodate the needs of the photographers by 
allowing group registration; however, if the orphan works 
provision limits an owner's right to reasonable compensation 
without access to statutory damages or attorneys fees, what's 
the motivation for photographers to register their works in the 
first place which gives them the opportunity to get those 
remedies?
    While some have stated that this issue should be resolved 
outside the scope of this orphan works solution, I think we 
have to be somewhat wary of going down a road that small 
copyright owners claim will isolate them from the benefits of 
the copyright system and potentially harm them. Currently, 
copyright owners can use the threat of litigation with the 
possibility of statutory damages and attorneys fees to hinder 
unauthorized uses of their works. Under this orphan works 
provision, while the use is still considered infringement, the 
remedies are so limited that the likelihood of recovery of even 
reasonable compensation becomes questionable. The cost of 
litigation to determine reasonable compensation would often 
times far exceed the actual reasonable compensation.
    To discuss the orphan works recommendation without 
addressing a core problem for major stakeholders in the process 
alters the balance in maintaining the exclusive rights for 
locatable copyright owners. Where but for the fact that there 
is no adequate data base, some of these children could be 
matched with their parents.
    So the issues, I just wanted to raise. I know I'm taking a 
little longer, but I'll make up for it on the other end. I 
would hope the witnesses could address a few of these 
questions.
    For cases in which the Copyright Office has a registration 
for a work with locatable information on its face, should there 
be an exception or carve-out to the orphan works provision? 
Should an owner, if able to show a registration, be able to 
reclaim his right to statutory damage or attorneys fees? What 
if the work was not only registered, but the owner took steps 
to make his work locatable by providing a description of the 
work? Would this make a difference? If the Copyright Office is 
proposing that this data base be a voluntary data base 
established by the photographers, should it we look at a later 
enactment date to allow time for the photographers to acclimate 
to this new scheme or perhaps provide a transition period? 
Finally, would the witness be amenable to having the option of 
a resolution of the orphan works issue in a small claims court 
to reduce the cost to small copyright owners?
    There are some other issues to consider, but it is in this 
particular area that I thought that I would hope the witnesses 
might address this discrete problem that I see in the proposal, 
which I generally commend and appreciate the Copyright Office 
submitting to us in response to our request.
    Thank you Mr. Chairman.
    Mr. Smith. Thank you, Mr. Berman.
    The gentlewoman from California, Ms. Lofgren, is recognized 
for an opening statement.
    Ms. Lofgren. Thank you, Mr. Chairman. I would ask unanimous 
consent to put my full statement in the record.
    Mr. Smith. Without objection, so ordered.
    Ms. Lofgren. To save time, I would just like to mention how 
interested I am in the Copyright Office proposal. I think that, 
as you know, I introduced a bill, H.R. 2408, that took a 
somewhat different approach than the one proposed by the 
Copyright Office. In my bill, I set forward a concept of a 
national registry system to avoid their works becoming 
orphaned. Under my bill, copyright holders would register their 
works in a national registry after 50 years.
    I recently received a letter from Professor Lawrence Lessig 
of Stanford Law School in support of a registry system. I would 
like to make that a part of the record. It is not my proposal, 
but I am interested in what the witnesses might think. I think 
it's been on the web.
    Mr. Smith. Without objection, that proposal will be made a 
part of the record as well as any other items that the 
gentlewoman wants to submit as a part of her opening statement.
    Ms. Lofgren. Thank you.
    I would just like to note that one of the values that I had 
hoped for in a registration approach is certainty on the of all 
parties. On the other hand, the Copyright Office's proposal has 
some benefits because it doesn't have the arbitrary 50-year 
date, and I think there's value in that. On the other hand, I'm 
not sure the certainty principle is there. So I'm interested in 
all of the witnesses talking about what further efforts could 
be made to provide certainty, and then certainly if you expend 
money, time, and effort on an orphan work, you want to have 
some level of certainty that you are doing so on firm ground. 
I'm not sure that the proposal before us really gives that 
level of certainty, and perhaps there is some way to do absent 
a registry system or maybe that is the better system.
    So thank you, Mr. Chairman, for allowing me. I don't 
generally do opening statements, but I appreciate the 
opportunity to do so today.
    Mr. Smith. Thank you, Ms. Lofgren.
    The gentleman from California, Mr. Issa, is recognized for 
an opening statement.
    Mr. Issa. Thank you, Mr. Chairman. I'll put my written 
statement into the record to save time.
    I just want to compliment and echo Mr. Berman's comments by 
saying that if I can find what is unfindable on the Government 
site by going to Google, then, in fact, we're not living up to 
the expectations of the public, and I would hope that as we go 
through this legislation or proposal and in the future that we 
recognize that in a digital age, there should be nothing 
unsearchable including, to be honest, a digital image from a 
picture being matched with the entire data base of pictures. 
That technology exists today, and I would hope during the 
statements, we could discuss if not today, then when would we 
have those capabilities so that there would not be a true 
orphan of intellectual property, copyright property, 
particularly in the Government's hands.
    Thank you. I yield back.
    Mr. Smith. Thank you, Mr. Issa.
    Would our panelists stand so that you all can be sworn in?
    [Witnesses sworn.]
    Mr. Smith. Our first witness is Jule Sigall, the Associate 
Register for Policy and International Affairs at the U.S. 
Copyright Office. Mr. Sigall is the head of the Office of 
Policy and International Affairs which assists the Register of 
Copyrights in advising Congress and Executive Branch agencies 
on domestic and international copyright policy matters. Mr. 
Sigall is also an adjunct professor of law at the George 
Washington University Law School where he teaches copyright. 
Mr. Sigall is a graduate of Duke University and a suma cum 
laude graduate of the Catholic university School of Law.
    Our next witness is Allan Adler, Vice President for Legal 
and Governmental Affairs for the Association of American 
Publishers which represents book and journal publishing 
industries. He deals with intellectual property, freedom of 
speech, new technology, and other industry-related issues. Mr. 
Adler holds a B.A. in history from the State University of New 
York at Binghamton and a J.D. from the George Washington 
University Law School.
    Our next witness is David Trust, the Chief Executive 
Officer of the Professor Photographers of America. Founded in 
1880, the PPA is the world's largest nonprofit trade 
association for professional photographers with 15,000 members. 
Mr. Trust is also the CEO of the Alliance of Visual Artists. 
The AVA is an umbrella group representing the interests of 
photographer organizations which also represents the 
International Association of Professional Event Photographers, 
Commercial Photographers International, and the Student 
Photographic Society as well. Mr. Trust graduated with a B.S. 
in journalism from the University of Georgia.
    Our final witness is Maria Pallante, the Associate General 
Counsel and Director of Licensing at the Solomon R. Guggenheim 
Foundation where she has managed intellectual property and 
related business affairs since 1999. Ms. Pallante received her 
J.D. from the George Washington University Law School, and her 
B.A. from College Misericordia.
    In closing, we should note, Mr. Trust, that you are at a 
slight disadvantage today since you are the only one with no 
connection to George Washington University School of Law. I 
don't remember coming this close, I think, before to a clean 
sweep by one law school with three having graduated from one. 
You may be outnumbered, but not out testimonied, but we'll find 
out.
    Okay. Mr. Sigall we'll begin with you.

TESTIMONY OF JULE L. SIGALL, ASSOCIATE REGISTER FOR POLICY AND 
 INTERNATIONAL AFFAIRS, COPYRIGHT OFFICE OF THE UNITED STATES, 
                    THE LIBRARY OF CONGRESS

    Mr. Sigall. Thank you, Mr. Chairman.
    Chairman Smith, Mr. Berman, and Members of the 
Subcommittee, I am pleased to appear today on behalf of the 
Copyright Office to testify about our report on orphan works. 
We would like to thank Chairman Smith and Mr. Berman for 
supporting our study in the report which we published at the 
end of January.
    As you summarized, Mr. Chairman, the term ``orphan works'' 
describes the situation where someone would like to use a 
copyrighted work, but cannot identify and locate the copyright 
owner. Even where the user makes a diligent effort to find the 
owner, if the owner is not found, the user faces a dilemma. She 
cannot determine whether the owner would permit the use. Where 
the proposed use is infringing, the user cannot reduce the risk 
of copyright liability because there is the possibility that a 
copyright owner could bring an infringement action after that 
use has begun.
    In each situation, the productive and beneficial use may be 
forestalled, not because the owner has asserted exclusive 
rights or because the user and owner cannot agree on the terms 
of a license, but merely because the user cannot locate the 
owner. For many users, the risk of infringement liability even 
though remote is enough to prompt them not to make use of the 
work. This outcome is not in the public interest, especially 
where the owner no longer exists or otherwise does not care to 
restrain the use of the work.
    Based on our study of this issue, we concluded the 
following: The orphan works problem is real, but it is illusive 
to quantify and describe comprehensively. Some orphan work 
situations may be addressed by existing law, but many are not, 
and legislation is necessary to provide a meaningful solution 
to the orphan works problem as we know it today. The report 
recommends with specific legislative language an amendment to 
the Copyright Act's remedy section.
    Our proposal is motivated by two primary goals. First, any 
system to deal with orphan works should seek to make it more 
likely a user finds the relevant owner in the first instance 
and negotiates a voluntary agreement over the use of the work. 
Second, where the user cannot identify and locate the owner 
after a reasonably diligent search, then the system should 
permit that user to make use of the work subject to provisions 
that resolve issues that arise if the owner surfaces after the 
use has commenced.
    Our proposed amendment follows the core concept that many 
participants favor as an orphan works solution. If the user has 
performed a reasonably diligent search but does not locate that 
copyright owner, then the remedies for infringement by that 
user should be limited. Both our written testimony and the 
report go into the specifics of a recommendation. So I won't 
spend much time on those details now. I would like to focus my 
remarks today on the reactions that interested parties have 
given to our report.
    By and large, that reaction has been quite positive. A 
diverse array of copyright owners and users, book publishers, 
authors, libraries, archives, museums, motion picture studios, 
record companies, educational institutions, documentary film-
makers and others all agree with our conclusion that the orphan 
works issue is real and needs to be addressed and they agree 
with the basic concept and structure of our proposed 
legislation. Some of these groups have made constructive 
suggestions for changes to the specific provisions, and we are 
confident that further discussion among the interested parties 
can resolve any remaining issues.
    Certain groups representing individual copyright owners, 
however, such as photographers, illustrators, and graphic 
artists oppose our proposal. They argue that many of their 
works will be inaccurately labeled orphan works because it is 
often difficult to find the owner of a visual image, usually 
because the name of the creator is not on copies of the work. 
As Mr. Berman pointed out, the Copyright Office records are 
text based and in many cases do not contain much, if any, 
description of the subject matter of the image in part because 
we have eased the registration requirements for photographers 
at that request. So even if a photographer has registered his 
works, a user may not be able to locate that owner.
    In other words, these groups concede the very problem at 
the heart of the report. A user seeking to locate a 
photographer of an image that has no identifying information on 
it faces a daunting challenge. Our proposal provides safeguards 
for this problem in a number of ways. First, in most cases, 
including all commercial uses, the user of an orphan work must 
pay the copyright owner reasonable compensation if the owner 
resurfaces. Also, the user will not be able to continue making 
the use after the owner asserts his copyright except in defined 
circumstances and even in that case must pay reasonable 
compensation for that future use. So when critics say that our 
proposal would strip thousands of photographers and other 
visual artists of their rights, that is simply not true.
    Photographers claim that bringing a lawsuit to collect 
reasonable compensation will be prohibitively expensive. We 
agree that legal actions to enforce copyrights are expensive 
just as any access to our court system is costly. However, this 
problem exists for visual images today regardless of whether 
orphan works legislation is passed or not. More over, there are 
nonlegal actions that photographers and others can take to 
protect their copyrights. These steps include consistent 
marking copies of their works, development of collective 
licensing mechanisms, and employing technology to allow 
effective searches where the user only has the image and no 
contextual information for the work. Steps like these will also 
ensure that visual images are locatable and that their works do 
not become orphan works.
    Regarding the expense of litigation, we noted in the report 
that a new small claims procedure might also help individual 
owners protect their copyright generally and also allow them to 
obtain reasonable compensation if their work falls into the 
orphan category. We will be pleased to work with the 
Subcommittee and interested parties in exploring possible new 
procedures; however, the key to enhancing copyright protection 
in visual images is not increased litigation, but making it 
easier for owners and users to find each other, which our 
orphan work proposal encourages.
    In conclusion, many users, especially cultural institutions 
like libraries, museums, and archives, made clear that any 
orphan work solution must include photograph and other visual 
images given the persistent orphan works problems that exist 
with these works. In fact, orphan works legislation may be the 
catalyst needed to prompt the nonlegal marketplace reforms that 
will most efficiently address the problems identified by these 
creators. For this reason and others, Congress should not delay 
its consideration and enactment of orphan works legislation.
    Thank you for the opportunity to testify today and I look 
forward to answering any questions that you might have.
    [The prepared statement of Mr. Sigall follows:]

                  Prepared Statement of Jule L. Sigall

    Chairman Smith, Ranking Member Berman, and Members of the 
Subcommittee, I am pleased to appear before you on behalf of the 
Copyright Office to testify about our Report on Orphan Works, published 
in January of this year. In this testimony, we provide a description of 
the orphan works issue and the contents of the Report, as well as a 
discussion of some of the reactions to the Report we have received from 
interested parties since its publication.
    By and large the reaction has been quite positive. A broad and 
diverse array of interests from both copyright owner and user 
communities including book publishers, authors, libraries, archives, 
museums, motion picture studios, record companies, educational 
institutions, documentary filmmakers and others agree with the 
Copyright Office's conclusion that the orphan works issue is real and 
needs to be addressed, and they also agree in basic concept and 
structure with the legislative solution proposed by the Report. Some of 
these groups have made constructive suggestions for changes to specific 
provisions of our proposal, and we are confident that issues raised by 
these comments can be resolved with further discussion among the 
interested parties.
    Some individual authors and creators, however, primarily in the 
photography and visual image industries, are opposed to our effort to 
solve the orphan works problem, despite the fact that the proposal does 
not remove copyright for orphan works, and requires, in most cases, 
that the user pay the copyright owner reasonable compensation for the 
use of the work. Their concerns stem mostly from the fact that legal 
action to enforce their copyrights is expensive, often prohibitively 
so. As described below and in the Report, the enforcement problems 
faced by these creators are real and should be addressed, but they 
exist whether or not orphan works legislation is passed. As a result, 
these concerns do not justify any delay in addressing the orphan works 
problem. In fact, enactment of orphan works legislation may be the 
catalyst necessary to prompt the non-legal, marketplace reforms that 
will most efficiently address the problems identified by photographers 
and creators of visual images.

                      I. DESCRIPTION OF THE REPORT

A. Introduction and Background
    The Report addresses the important issue of ``orphan works,'' a 
term used to describe the situation where the owner of a copyrighted 
work cannot be identified and located by someone who wishes to make use 
of the work in a manner that requires permission of the copyright 
owner. Even where the user has made a reasonably diligent effort to 
find the owner, if the owner is not found, the user faces uncertainty--
she cannot determine whether or under what conditions the owner would 
permit use. Where the proposed use goes beyond an exemption or 
limitation to copyright, the user cannot reduce the risk of copyright 
liability for such use, because there is always a possibility, however 
remote, that a copyright owner could bring an infringement action after 
that use has begun.
    Concerns have been raised that in such a situation, a productive 
and beneficial use of the work is forestalled--not because the 
copyright owner has asserted his exclusive rights in the work, or 
because the user and owner cannot agree on the terms of a license--but 
merely because the user cannot locate the owner. Many users of 
copyrighted works have indicated that the risk of liability for 
copyright infringement, however remote, is enough to prompt them not to 
make use of the work. Such an outcome is not in the public interest, 
particularly where the copyright owner is not locatable because he no 
longer exists or otherwise does not care to restrain the use of his 
work.
    The Copyright Office has long shared these concerns, and considered 
the issue of orphan works to be worthy of further study. The Office was 
pleased that in January 2005, Chairman Smith and Mr. Berman expressed 
interest in the issue and supported the request from Senators Orrin 
Hatch and Patrick Leahy to study the orphan works issue in detail, and 
to provide a report with the Office's recommendations.
    After that request, in January 2005, the Office issued a Notice of 
Inquiry initiating this study. We received over 850 written initial and 
reply comments from the public, and held three days of roundtable 
discussions in late July in Washington, D.C. and Berkeley, California. 
The Office subsequently met informally with various organizations 
separately, in a effort to explore more specific issues raised in the 
comments and roundtables; they were also invited to further express 
their individual concerns. Our Report is the culmination of those 
efforts.

               II. DESCRIPTION OF ORPHAN WORKS SITUATIONS

    Section III of the Report catalogs and organizes the various 
situations described in the comments as ``orphan work'' situations. The 
written initial and reply comments, most of which were authored by 
individuals, described an enormous variety of problems and proposed 
uses. It is difficult, however, to quantify the extent and scope of the 
orphan works problems from these comments, for several reasons. First, 
about 40% of the comments do not identify an instance in which someone 
could not locate a copyright owner, and another significant portion 
identified situations that were clearly not orphan work situations. 
Still, about 50% of the comments identified a situation that could 
fairly be categorized as an orphan works situation, and even more 
instances were collected in comments filed by trade associations and 
other groups. Thus, there is good evidence that the orphan works 
problem is real and warrants attention, and none of the commenters made 
any serious argument questioning that conclusion.
    The Report describes the most common obstacles to successfully 
identifying and locating the copyright owner, such as (1) inadequate 
identifying information on a copy of the work itself; (2) inadequate 
information about copyright ownership because of a change of ownership 
or a change in the circumstances of the owner; (3) limitations of 
existing copyright ownership information sources; and (4) difficulties 
researching copyright information.\1\ It then describes other 
situations raised by commenters that were alleged to be ``orphan work'' 
situations but upon closer inspection were outside the scope of the 
inquiry. These included situations where the user contacted the owner, 
but did not receive permission to use the work, either because the 
owner did not respond to the request, refused the request, or required 
a license fee that the user felt was too high. Other such problems 
included general difficulties determining the status of copyright 
protection for a given work, and problems related to the legal 
protection accorded pre-1972 sound recordings.\2\
---------------------------------------------------------------------------
    \1\ See United States Copyright Office, Report on Orphan Works 23-
34 (Jan. 2006) [hereinafter ``Report''].
    \2\ See Report at 34-46.
---------------------------------------------------------------------------
    Finally, the Report catalogs the proposed uses that the commenters 
indicated were most affected by the orphan works situations. In our 
view these uses fall into one of four general categories: (1) uses by 
subsequent creators who add some degree of their own expression to 
existing works to create a derivative work; (2) large-scale ``access'' 
uses where users primarily wish to bring large quantities of works to 
the public, usually via the Internet; (3) ``enthusiast'' or hobbyist 
uses, which usually involve specialized or niche works, and also appear 
frequently to involve posting works on the Internet; and (4) private 
uses among a limited number of people.\3\
---------------------------------------------------------------------------
    \3\ See Report at 36-40.
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                         III. LEGAL BACKGROUND

    Section IV of the Report provides the legal backdrop for 
consideration of the orphan works issue.\4\ First, it sets out the 
historical factors that affect the orphan works problem by describing 
how the issue is, in some respects, a result of the omnibus revision to 
the Copyright Act in 1976. Specifically, the 1976 Act made obtaining 
and maintaining copyright protection substantially easier than the 1909 
Act. Copyrighted works are protected the moment they are fixed in a 
tangible medium of expression, and do not need to be registered with 
the Copyright Office. Also, the 1976 Act changed the basic term of 
copyright from a term of fixed years from publication to a term of life 
of the author plus 50 (now 70) years. In so doing, the requirement that 
a copyright owner file a renewal registration in the 28th year of the 
term of copyright was essentially eliminated.
---------------------------------------------------------------------------
    \4\ See Report at 41-68.
---------------------------------------------------------------------------
    These changes were important steps toward the United States' 
assumption of a more prominent role in the international copyright 
community, specifically through accession to the Berne Convention, 
which prohibits formalities like registration and renewal as a 
condition on the enjoyment and exercise of copyright. Moreover, there 
was substantial evidence presented during consideration of the 1976 Act 
that the formalities such as renewal and notice, when combined with 
drastic penalties like forfeiture of copyright, served as a ``trap for 
the unwary'' and caused the loss of many valuable copyrights. These 
changes, however, exacerbate the orphan works issue, in that a user 
generally must assume that a work he wishes to use is subject to 
copyright protection, and often cannot confirm whether a work has 
fallen into the public domain by consulting the registration records of 
the Copyright Office.
    Section IV of the Report then goes on to describe existing 
provisions of copyright law that might address the orphan works 
situation in certain circumstances. While U.S. copyright law does not 
contain an omnibus provision addressing all orphan works as such, it 
does contain a few provisions that permit certain users to make certain 
uses of certain classes of orphan works, and other provisions that 
reduce the risk in using an orphan work. These provisions include 
section 108(h), section 115(b), section 504(c)(2), and the termination 
provisions (sections 203, 304(c), and 304(d)). These existing sections 
provide models that may be useful in the development of an omnibus 
orphan works provision.
    This discussion demonstrates that the current Copyright Act does 
not contain provision designed to address the orphan works situation 
that is the subject of the Report. While some provisions, like section 
108(h), might address the question for some users in certain 
situations, in general a user faced with an orphan works situation will 
not find a specific section or other provision of the Act on which he 
might rely to make use of the work.
    Nevertheless, we believe that the focus on developing legislative 
text to address orphan works should not obscure the fact that the 
Copyright Act and the marketplace for copyrighted works provide several 
alternatives to a user who is frustrated by the orphan works situation. 
Indeed, assessing whether the situations described to use in the 
comments were true ``orphan works'' situations was difficult, in part 
because there is often more than meets the eye in a circumstance 
presented as an ``orphan works'' problem.
    For purposes of developing a legislative solution we have defined 
the ``orphan works'' situation to be one where the use goes beyond any 
limitation or exemption to copyright, such as fair use. However, in 
practice, most cases will not be so neatly defined, and a user may have 
a real choice among several alternatives that allow her to go forward 
with her project: making noninfringing use of the work, such as by 
copying only elements not covered by copyright; making fair use; 
seeking a substitute work for which she has permission to use; or a 
combination of these alternatives. Indeed, evidence presented to us 
indicates that users in the orphan works situation make exactly these 
types of choices. Section IV of the Report describes some of those 
alternatives and how they might be applicable to different scenarios 
described in the comments.
    Finally, Section IV of the Report sets out the international law 
context for consideration of an orphan works solution. Specifically, it 
describes the obligations that the various international copyright 
treaties impose on the United States with respect to imposition of 
formalities to copyright, limitations and exceptions to copyright and 
copyright remedies.

                 IV. DESCRIPTION OF PROPOSED SOLUTIONS

    Numerous comments received in the orphan works proceeding proposed 
solutions to the orphan works problem, and Section V of the Report 
catalogs and describes them. These solutions can be grouped into four 
categories:

          Solutions that already exist under current law and 
        practice. These were usually noted only in passing; commenters 
        (even commenters opposed to any orphan works provision) did not 
        take the position that the existing law is sufficient to solve 
        the orphan works problem.\5\
---------------------------------------------------------------------------
    \5\ See Report at 69.

          Non-legislative solutions. An example of a solution 
        in this category is a proposal for improved databases for 
        locating owners of works. These solutions were also usually 
        noted only in passing, and were not advanced as sufficient to 
        fix the problem.\6\
---------------------------------------------------------------------------
    \6\ See Report at 70.

          Legislative solutions that involve a limitation on 
        remedies when a user uses an orphan work. The most substantive 
        comments fell into this category, and most of the comments by 
        professional organizations or academics fell into this 
        category.\7\
---------------------------------------------------------------------------
    \7\ See Report at 71-89.

          Other legislative solutions. Examples of proposed 
        solutions in this category are deeming all orphaned works to be 
        in the public domain, or changing the tax or bankruptcy codes 
        to reduce the factors that cause orphan works to come into 
        existence in the first place.\8\
---------------------------------------------------------------------------
    \8\ See Report at 89.

    As explained in Section V, most of the comments focused on various 
aspects of the third category, legislative proposals involving a 
limitation on remedies. Almost every commenter who advocated a 
limitation-on-remedies system agreed that a fundamental requirement for 
designation of a work as orphaned is that the prospective user have 
conducted a search for the owner of the work, and that the search 
results in the owner not being located. The commenters differed in the 
types of searches they would consider adequate.
    Many commenters were in favor of determining whether a search was 
reasonable on an ``ad hoc'' or case-by-case basis, whereby each search 
is evaluated according to its circumstances. This approach was offered 
as having the advantage of flexibility to cover the wide variety of 
situations that depend on the type of work and type of use involved. 
Several others were in favor of a ``formal'' approach, whereby the 
copyright owner is required to maintain his contact information in a 
centralized location, and a user need only search those centralized 
locations to perform a reasonable search. That approach was offered as 
being more certain than the ``ad hoc'' approach.
    The commenters also discussed the role that registries would play 
in an orphan works system. Some proposed a mandatory registry for owner 
information, which was opposed by several commenters as reinstating the 
problematic features of the pre-1976 copyright law, and might violate 
international obligations related to formalities. Many commenters 
expressed support for voluntary registries of owner information that 
could be consulted by users in performing their reasonable searches. 
Some copyright owners expressed concern about even voluntary registries 
as not offering much efficiency in certain cases, such as photographs. 
Some commenters proposed that user registries be established in which a 
user would file a notice that he intends to use a work for which he 
cannot locate an owner. Both voluntary and mandatory user registries 
were proposed. Concerns were raised as to whether user registries were 
unnecessarily burdensome on owners, who might have to consult the 
registry frequently to monitor use of their copyrights.
    Other issues discussed by the commenters and described in Section V 
include whether the orphan works system should be limited based on the 
age of the work, on whether the work is unpublished, and on whether the 
work is of foreign origin. Many commenters expressed the view that none 
of these characteristics should disqualify any particular work; rather, 
these aspects of a work should be considered in the determination of 
whether the search for the owner was reasonable. Some commenters also 
proposed that the use of orphan works be limited to non-profit 
educational or cultural institutions.
    Once a work has been designated as an orphan work, several comments 
addressed whether the user would have to pay any fees for the use of 
the work. A common suggestion was that the user be obligated to pay a 
reasonable license fee if the copyright owner surfaced after use began. 
Others proposed a low fixed statutory fee, such as $100 per work used, 
and another suggestion was the actual damages caused by the use be 
limited by a low statutory cap. Some participants favored the use of an 
escrow that users would pay into upon use of the orphan work, with that 
money distributed to owners if they surfaced.
    If an owner does appear and claim infringement, most commenters 
agreed that some limitation on the remedies for infringement is 
essential to enabling the use of the work. Most agreed that statutory 
damages and attorneys fees should not be available, because those 
remedies create the most uncertainty in the minds of users. With 
respect to injunctive relief, many commenters proposed that the orphan 
work user be permitted to continue the use he had been making before 
the owner surfaced, but that new uses of the work remain subject to 
injunction and full copyright remedies.

                   V. CONCLUSIONS AND RECOMMENDATIONS

    Section VI of the Report contains the Copyright Office's 
conclusions and recommendations.\9\ Our conclusions are:
---------------------------------------------------------------------------
    \9\ See Report at 92.

---------------------------------------------------------------------------
          The orphan works problem is real.

          The orphan works problem is elusive to quantify and 
        describe comprehensively.

          Some orphan works situations may be addressed by 
        existing copyright law, but many are not.

          Legislation is necessary to provide a meaningful 
        solution to the orphan works problem as we know it today.

    The Report recommends that the orphan works issue be addressed by 
an amendment to the Copyright Act's remedies section. The specific 
language we recommend is provided at the end of the Report.\10\
---------------------------------------------------------------------------
    \10\ See Report at 127.
---------------------------------------------------------------------------
    In considering the orphan works issue and potential solutions, the 
Office has kept in mind three overarching and related goals. First, any 
system to deal with orphan works should seek primarily to make it more 
likely that a user can find the relevant owner in the first instance, 
and negotiate a voluntary agreement over permission and payment, if 
appropriate, for the intended use of the work. Second, where the user 
cannot identify and locate the copyright owner after a reasonably 
diligent search, then the system should permit that specific user to 
make use of the work, subject to provisions that would resolve issues 
that might arise if the owner surfaces after the use has commenced. In 
the roundtable discussions, there seemed to be a clear consensus that 
these two goals were appropriate objectives in addressing the orphan 
works issues. Finally, efficiency is another overarching consideration 
we have attempted to reflect, in that we believe our proposed orphan 
works solution is the least burdensome on all the relevant 
stakeholders, such as copyright owners, users and the federal 
government.
    The proposed amendment follows the core concept that many 
commenters favored as a solution to the orphan works problem: if the 
user has performed a reasonably diligent search for the copyright owner 
but is unable to locate that owner, then that user should enjoy the 
benefit of limitations on the remedies that a copyright owner could 
obtain against him if the owner showed up at a later date and sued for 
infringement. The recommendation has two main components:

          the threshold requirements of a reasonably diligent 
        search for the copyright owner and attribution to the author 
        and copyright owner; and

          the limitation of remedies that would be available if 
        the user proves that he conducted a reasonably diligent search.
    The details of the recommendation are set out in Section VI, 
followed by a discussion of some other proposals that we considered 
carefully, but ultimately decided not to recommend.\11\
---------------------------------------------------------------------------
    \11\ See Report at 93-122.
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A. The Reasonably Diligent Search Requirement
    Subsection (a) sets out the basic qualification the user of the 
orphan work must meet--he must perform a ``reasonably diligent search'' 
and have been unable to locate the owner of the copyright in the work. 
Such a search must be completed before the use of the work that 
constitutes infringement begins. The user has the burden of proving the 
search that was performed and that it was reasonable, and each user 
must perform a search, although it may be reasonable under the 
circumstances for one user to rely in part on the search efforts of 
another user.
    Several commenters complained of the situation where a user 
identifies and locates the owner and tries to contact the owner for 
permission, but receives no response from the owner. They suggested 
that works in these situations should be considered orphan works. We 
have concluded that such a solution is not warranted, as it touches 
upon some fundamental principles of copyright, namely, the right of an 
author or owner to say no to a particular permission request, including 
the right to ignore permission requests. For this reason, once an owner 
is located, the orphan works provision becomes inapplicable.
    The proposal adopts a very general standard for reasonably diligent 
search that will have to be applied on a case-by-case basis, accounting 
for all of the circumstances of the particular use. Such a standard is 
needed because of the wide variety of works and uses identified as 
being potentially subject to the orphan works issues, from an untitled 
photograph to an old magazine advertisement to an out-of-print novel to 
an antique postcard to an obsolete computer program. It was not 
possible for our Report to craft a standard that could be specific to 
all or even many of these circumstances. Moreover, the resources, 
techniques and technologies used to investigate the status of a work 
also differ among industry sectors and change over time, making it hard 
to specify the steps a user must take with any particularity.
    Section VI contains a discussion of several factors that commenters 
identified as being relevant to the reasonableness of a search, 
including:

          The amount of identifying information on the copy of 
        the work itself, such as an author's name, copyright notice, or 
        title;

          Whether the work had been made available to the 
        public;

          The age of the work, or the dates on which it was 
        created and made available to the public;

          Whether information about the work can be found in 
        publicly available records, such as the Copyright Office 
        records or other resources;

          Whether the author is still alive, or the corporate 
        copyright owner still exists, and whether a record of any 
        transfer of the copyright exists and is available to the user; 
        and

          The nature and extent of the use, such as whether the 
        use is commercial or noncommercial, and how prominently the 
        work figures into the activity of the user.

    Importantly, our recommendation does not exclude any particular 
type of work from its scope, such as unpublished works or foreign 
works. Section VI explains why we believe that unpublished works should 
not be excluded from this recommendation, and how the unpublished 
nature of a work might figure into a reasonable search determination.
    Our recommendation permits, and we encourage, interested parties to 
develop guidelines for searches in different industry sectors and for 
different types of works. Most commentators were supportive of 
voluntary development of such guidelines. When asked whether the 
Copyright Office should have authority to embody guidelines in more 
formal, binding regulations to provide certainty, we were surprised to 
hear that most user groups--whom we thought would desire more certain 
rules for searches--opposed the Copyright Office issuing rules related 
to search criteria. Based on our desire to maintain flexibility in the 
reasonable search standard and this expressed opposition to formal 
rulemaking, we have not proposed that the orphan works legislation 
provide the Office with any rulemaking authority.

B. The Attribution Requirement
    We also recommend one other threshold requirement for a user to 
qualify for the orphan works limitations on remedies: throughout the 
use of the work, the user must provide attribution to the author and 
copyright owner of the work if such attribution is possible and as is 
reasonably appropriate under the circumstances. The idea is that the 
user, in the course of using a work for which he has not received 
explicit permission, should make it clear to the public that the work 
is the product of another author, and that the copyright in the work is 
owned by another. While only a handful of commenters proposed a 
requirement along these lines, we found several good reasons to support 
this requirement, described in Section VI, including the notion that 
attribution is critically important to authors, even those who consent 
to free use of their works. The requirement of attribution should be a 
flexible rule, and should not be interpreted in a strict way to create 
unnecessarily another obstacle to the use of orphan works.

C. Other Alternatives Considered
    There were two other mechanisms proposed to help address the orphan 
works issue that we considered but ultimately concluded would not be 
appropriate to recommend at this time. First, as noted above, some 
commenters suggested that users should be required to file with the 
Copyright Office some public notice that they have conducted a 
reasonable search and intend to use an orphan work. While a centralized 
registry of user certifications or notice of intent to use sounds 
promising on the surface, upon closer examination there are potential 
pitfalls that outweigh the benefits at this time, for reasons that we 
describe in Section VI.
    The other mechanism proposed by some commenters is a requirement 
that orphan works users pay into an escrow before commencing use. In 
our view, an escrow requirement in an ``ad hoc'' reasonable search 
system like we recommend would be highly inefficient. Every user would 
be required to make payment, but in the vast majority of cases, no 
copyright owner would resurface to claim the funds, which means the 
system would not in most cases actually facilitate payments between 
owners and users of orphan works. We are sympathetic to the concerns of 
individual authors about the high cost of litigation and how, in many 
cases, the individual creator may have little practical recourse in 
obtaining relief through the court system. We believe that 
consideration of new procedures to address this situation, such as 
establishment of a ``small claims'' or other inexpensive dispute 
resolution procedure, would be an important issue for further study by 
Congress.

D. Limitation on Remedies
    If a user meets his burden of demonstrating that he performed a 
reasonably diligent search and provided reasonable attribution to the 
author and copyright owner, then the recommended amendment would limit 
the remedies available in that infringement action in two primary ways: 
First, it would limit monetary relief to only reasonable compensation 
for the use, with an elimination of any monetary relief where the use 
was noncommercial and the user ceases the infringement expeditiously 
upon notice. Second, the proposal would limit the ability of the 
copyright owner to obtain full injunctive relief in cases where the 
user has transformed the orphan work into a derivative work like a 
motion picture or book, preserving the user's ability to continue to 
exploit that derivative work. In all other cases, the court would be 
instructed to minimize the harm to the user that an injunction might 
impose, to protect the user's interests in relying on the orphan works 
provision in making use of the work.

  1. Monetary Relief
    A vast majority of the commenters in our study agreed that the 
prospect of a large monetary award from an infringement claim, such as 
an award of statutory damages and attorneys' fees, was a substantial 
deterrent to users who wanted to make use of an orphan work, even where 
the likelihood of a claim being brought was extremely low. Most of the 
proposals for addressing the orphan works problem called for clear 
limitations on the statutory damages and attorneys' fees remedies in 
cases involving orphan works. Our recommendation follows this 
suggestion by limiting the possible monetary relief in these cases to 
only ``reasonable compensation,'' which is intended to represent the 
amount the user would have paid to the owner had they engaged in 
negotiations before the infringing use commenced. In most cases it 
would equal a reasonable license fee, as that concept is discussed in 
recent copyright case law.
    While many commenters supported a general remedy like ``reasonable 
compensation,'' some expressed concern about the impact that any 
monetary remedy at all might have on their ability to go forward and 
use orphan works. For example, museum representatives explained that 
they would like to use hundreds or even thousands of orphan works in 
their collections, so the potential of even a minimal monetary award 
for each work, would, in their view, be prohibitive. Libraries and 
archives made similar observations, noting their desire to make large 
collections of orphan works accessible.
    In our view, a general standard of reasonable compensation is the 
right solution to this problem, for several reasons. First, with 
respect to the concern about a chilling effect of any monetary remedy, 
it must be noted that in nearly all cases where a diligent search has 
been performed, the likelihood of a copyright owner resurfacing should 
be very low, so that no claim for compensation is ever made. Second, it 
should be clear that ``reasonable compensation'' may, in appropriate 
circumstances, be found to be zero, or a royalty-free license, if the 
comparable transactions in the marketplace support such a finding. Our 
discussions with museums, universities and libraries indicated that in 
many orphan works situations a low or zero royalty is likely to be the 
reasonable compensation.
    In addition, to make absolutely sure that the concerns of nonprofit 
institutions like libraries, museums and universities about monetary 
relief are assuaged, we recommend an additional limitation on monetary 
relief where the user is making a non-commercial use of the work and 
expeditiously ceases the infringement after receiving notice of the 
infringement claim. In that case, there should be no monetary relief at 
all. Libraries, archives and museums indicated that posting material on 
the Internet was a primary use they would like to make of orphan works, 
and that they would take down any material if a copyright owner 
resurfaced. This additional provision provides certainty about their 
exposure in that circumstance. If the organization wishes to continue 
making use of the work, it would have to pay reasonable compensation 
for its past use, and, as described below, for future use of the work.

  2. Injunctive Relief
    In addition to the limits on monetary relief, several commenters in 
this proceeding suggested that limitations on injunctive relief were 
needed as well. Most specifically, users who would like to create 
derivative works based on orphan works, most notably filmmakers and 
book publishers, stressed that the fear of an untimely injunction--
brought just as the book was heading to stores, or just before release 
of the film--provides enough uncertainty that many choose not use the 
work, even though the likelihood of such injunction is small.
    In light of these comments, we recommend that injunctive relief for 
infringement of an orphan work be limited in two ways. First, where the 
orphan work has been incorporated into a derivative work that also 
includes significant expression of the user, then injunctive relief 
will not be available to stop the use of the derivative work, provided 
the user pays reasonable compensation to the copyright owner. Second, 
in all other cases, full injunctive relief is available, but the court 
must account for and accommodate any reliance interest of the user that 
might be harmed by an injunction. For example a full injunction will 
still be available where a user simply republishes an orphan work, or 
posts it on the Internet without transformation of the content.

E. Administrative Provisions
    We also recommend two other administrative provisions. First, a 
savings clause that makes clear that nothing in the new section on 
orphan works affects rights and limitations to copyright elsewhere in 
the Copyright Act, which is consistent with the structural approach of 
placing the provision in the remedies chapter. Second, we recommend 
that the provision sunset after ten years, which will allow Congress to 
examine whether and how the orphan works provision is working in 
practice, and whether any changes are needed.

F. International Context
    The Notice of Inquiry asked questions about how any proposed 
solution to the orphan works issue would comport with the United 
States' international obligations in the various copyright treaties. 
Our recommendation does not exclude foreign works from its scope, so it 
must comport with the United States' international copyright 
obligations. We believe that one of the primary advantages of the ad 
hoc, reasonably diligent search approach is that it is fully compliant 
with international obligations.

G. Application to Types of Uses
    To further explain how our recommendation would work in practice, 
Section VI takes the four general categories of users described in 
Section III and describes how the recommended limitation on remedies 
would apply in each scenario.\12\ The Section describes how the 
Subsequent Creator, Large-Scale Access User, Enthusiast User and 
Personal User would proceed under the recommendation. We believe that 
nearly all orphan work situations are encompassed by one of those four 
categories, so that if our recommendation resolves these users' 
concerns in a satisfactory way, it will likely be a comprehensive 
solution to the orphan works situation.
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    \12\ See Report at 122-126.
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                      VI. REACTIONS TO THE REPORT

    The reactions we have heard to our Report, for the most part, have 
been overwhelmingly positive. A broad array of copyright owners and 
copyright users: book publishers, libraries, archives, museums, 
educational institutions, record companies, motion picture studios, 
independent filmmakers, software publishers and others, have praised 
the Report and support the basic concept and structure of the proposed 
legislation. Several of these groups have pointed out specific features 
of our recommendation that might create unintended consequences, or 
suggested modifications to the language to address specific concerns.
    In this section of the testimony, we comment on some of these 
reactions and suggestions. As noted in the Report, we proposed specific 
legislative language to help clarify our conclusions and 
recommendations by giving interested parties a more concrete 
understanding of what our conclusions entail. We also recognized that 
interested parties might have suggested revisions that would improve 
the clarity of the text or avoid unintended consequences of the 
language that we proposed.\13\ In other words, we recognize that our 
proposal is likely a starting point for legislation to address orphan 
works, and would be pleased to work with the Committee, its staff and 
interested parties on modifying that language. In general, however, 
these groups are supportive of the overall approach, and the proposed 
changes are issues that very likely can be resolved with further 
discussion, and which will result in compromise draft legislation 
supported by the vast majority of copyright owner and user interests.
---------------------------------------------------------------------------
    \13\ See Report at 93.
---------------------------------------------------------------------------
A. The Problem of Photographs and Other Visual Images
    The one exception to the broad support for our proposed legislation 
involves certain groups representing individual copyright owners of 
visual works, such as photographers, illustrators, and graphic artists. 
They oppose our proposal, which was not unexpected, as many of them 
filed comments in our proceeding recommending that no change be made to 
the law to address the orphan works problem. They argue that many, if 
not most, of their works will be inaccurately labeled orphan works, 
because it is difficult and often impossible to find the copyright 
owner of a visual image, usually because the name of the creator is not 
on the copies of the works distributed to the public. Moreover, 
existing sources of ownership information are text-based and often not 
useful if the user only has the work, and not any other information 
about the work, before him.
    In other words, these groups concede the very problem that is at 
the heart of the Report--a user seeking to locate a photographer or 
illustrator of an image that has no identifying information on the work 
itself faces a daunting challenge. The Copyright Office registration 
records are text-based, and in most cases registration records do not 
contain much, if any, description of the subject matter of the image. 
Indeed, efforts by the Office to accommodate photographers by making it 
easier to register photographs (e.g., the recent regulations permitting 
group registration of published photographs), while responding to 
complaints from photographers about the difficulties they have had in 
registering their works, have probably made the registration system 
less useful for determining copyright ownership of particular 
photographs. So even if a photographer has registered his works with 
the Copyright Office, it may be the case that a user will not be able 
locate that owner.
    Our proposal anticipates and provides safeguards for this situation 
in a number of ways, primarily by preserving meaningful remedies for 
owners of works that might be subject to the orphan works legislation. 
First, in most cases, including all commercial uses, the user of an 
orphan work is obligated to pay the copyright owner ``reasonable 
compensation'' for the use prior to the time the owner resurfaces. 
Also, the user will not generally not be able to continue making the 
use after the owner asserts his copyright, unless the user meets the 
requirements of Section 514(b)(2)(A), and even in that case will be 
required to pay reasonable compensation to the owner going forward. And 
in order for noncommercial users to avoid the requirement of reasonable 
compensation, they must cease the infringement expeditiously after the 
owner assert his rights, thus preserving future exploitation to the 
owner's exclusive rights.
    Despite being entitled to ``reasonable compensation'' and these 
remedies in most orphan work cases, photographers oppose the proposal 
because they claim that bringing a lawsuit to collect this compensation 
will be prohibitively expensive. We agree that legal actions to enforce 
copyrights in visual images are expensive for individual creators, just 
as any access to our court system is costly. However, this problem 
exists for copyrighted visual images regardless of whether orphan works 
legislation is passed or not. Moreover, there are non-legal actions 
that the photographers, illustrators and similar creators can take to 
enforce and exploit their copyrights, and at the same time, help 
eliminate the possibility that their works would fall into the orphan 
works system.
    As a practical matter, a marketplace of licenses and permissions 
for use of photographs simply cannot exist where potential buyers 
cannot find the sellers of rights in visual images. Creators of visual 
images need to address the problem first and foremost, and primarily 
through non-legal actions--through more consistent marking of copies of 
their works, through development of mechanisms like collective 
licensing organizations that can provide ownership and licensing 
information to users, and by deploying technology to allow searches for 
owners where the user only has the image and no contextual information. 
Steps like these will help individual owners enforce and receive 
payment for their copyrighted images, and, at the same time, ensure 
that they are locatable and that their works do not become orphan 
works. It is important that any legislative solution to address orphan 
works include photographs and other visual images within its scope to 
resolve the numerous orphan works problems that exist with these types 
of works. Moreover, failing to include such works in the scope of the 
legislation would likely allow visual image copyright owners to avoid 
resolving these more fundamental problems with non-legal, marketplace 
reforms.
    As to the legal actions that individual creators can take to 
enforce their rights, our Report acknowledges the real obstacle faced 
by photographers and other individual copyright owners from the expense 
of infringement lawsuits. We agree that a more efficient dispute 
resolution procedure, such as a ``small claims'' procedure for 
copyright infringement claims involving relatively small damage 
amounts, would offer individual owners better access to legal 
protection of their rights. Such a procedure would also allow these 
owners to obtain the ``reasonable compensation'' they would be due 
under our orphan works proposal even if their works fall into the 
orphan category. We would be pleased to work with the Subcommittee and 
interested parties in exploring possible new procedures. It should be 
noted, however, that the key to creating a more efficient marketplace 
for copyrighted visual images is not increased litigation, but making 
it easier for owners and users to find each other, which our orphan 
works proposal encourages.
    In sum, we understand the concerns of photographers and other 
visual image creators. They face difficulties exploiting their 
copyright, particularly in light of new technology like the Internet, 
and solutions to those problems, both legal and non-legal, should be 
explored and developed. That fact, however, does not deny that there is 
a very real problem of orphan works that needs to be addressed, and 
those issues should not delay Congress in its consideration and 
enactment of orphan works legislation.

B. Other Comments and Suggestions
    The other comments and suggestions we have received concern 
specific provisions in the Report's proposed language. First, some 
groups remain concerned that a general standard of ``reasonable 
compensation'' might result in high damage awards that would discourage 
use of orphan works. For reasons set out in the Report, we think this 
concern is unfounded, particularly in light of the exception that 
limits monetary relief to no compensation where the use is 
noncommercial and the user ceases the infringement when the owner 
resurfaces.
    One suggestion made to address this issue is for the statute to 
define ``reasonable compensation'' with language from the Report that 
specifies that it ``would equal what a reasonable willing buyer and 
reasonable willing seller in the positions of the owner and user would 
have agreed to at the time the use commenced, based predominantly by 
reference to evidence of comparable marketplace transactions.'' \14\ We 
agree that including language like this in the legislation would be a 
helpful clarification. We also believe that legislative history 
providing examples of how reasonable compensation would be determined 
in different circumstances would also be helpful.
---------------------------------------------------------------------------
    \14\ See Report at 116.
---------------------------------------------------------------------------
    On the related question of whether the orphan work user's activity 
is done ``without direct or indirect commercial advantage,'' which 
would make that user potentially eligible for no monetary relief, our 
Report attempts to recognize that some non-profit organizations engage 
in different types of activity, some of which is commercial and some 
non-commercial. Museums and other nonprofit organizations have asserted 
that their activities involving the sale of books or other items using 
copyrighted materials are simply a matter of ``cost recovery'' and 
should not be considered commercial for the purposes of our proposal. 
We cannot accept that proposition categorically, especially where the 
institution has paid other located copyright owners for the use of 
their works in the same book or product that contains the orphan work. 
Nevertheless, we agree the drawing lines between situations is 
difficult, and look forward to working with museums and others on 
illustrative examples that can be used in the legislative history to 
help draw those lines.
    Second, some groups have expressed concern with our requirement 
that the orphan work user attribute the author and copyright owner 
during their use of the work. Specifically, museums and others have 
said that determining the copyright owner, as opposed to the author, is 
often difficult and confusing, and therefore it should not be required. 
In our view, however, as the Report explains, attributing the copyright 
owner, if possible, is an important piece of information that other 
users and the public should be able to learn from the orphan work user. 
It also will increase the likelihood that the owner will surface after 
use begins and voluntary agreement over the use can be reached. If the 
user is unsure of who owns the copyright, then it may not be possible 
for him to attribute the copyright owner. Also, the manner of 
attribution should be determined as is reasonable under the 
circumstances. These two considerations, embodied in our proposal, 
account for the concerns expressed about attributing the copyright 
owner, and thus it should remain a requirement.
    Third, with respect to injunctive relief provision of proposed 
Section 514(b)(2)(A), some have expressed concern about what types of 
works would be included in that provision. Specifically, some are 
concerned that the use of the term ``derivative work'' might not be 
broad enough to encompass works that our Report explains should be 
included--the historical book which includes photographs or the 
inclusion of a sculpture in a scene of a motion picture--because these 
works do not necessarily ``transform'' or alter the underlying orphan 
work. As we note in the Report, the concept behind this provision--with 
which we have not heard disagreement--was to capture the situation 
where the user creates a new work that relies to a significant extent 
on the underlying orphan work, as contrasted with the situation where 
the user merely republishes the orphan work, either alone or as part of 
a compilation. We agree that the language in this section could be more 
clear, and would be pleased to work with interested parties on ways it 
could be amended to better reflect the concept that underlies it.
    Fourth, several groups have expressed concerned about the sunset 
provision, and have questioned how it applies where a use begins before 
the 10-year period is over but continues afterward. It was our intent 
to allow any user who begins use in reliance on the proposed Section 
514 before the 10-year period is over to be able to benefit from the 
provision, even after the 10-year period ends. Changing the word 
``occurring'' to ``commencing'' would help make that clear, and we 
would be pleased to discuss further changes to clarify this point. As 
to whether a sunset provision is appropriate, it is likely that at 
least some minor--and perhaps some major--adjustments to the orphan 
works legislation will be advisable after we have had a few years' 
worth of experience with it.\15\ We certainly do not believe that the 
provisions of the orphan works legislation should actually expire. But 
without a sunset provision, it may be difficult to persuade a future 
Congress to modify the existing legislation if it is deemed to be 
``good enough.'' Requiring reauthorization after a reasonable number of 
years will ensure that Congress will, as a practical matter, have 
little choice but to ask itself at that point whether and how the 
existing regime can be improved.
---------------------------------------------------------------------------
    \15\ To that end, we would also welcome a study at some point 
before the end of the 10-year period to assess how the orphan works 
legislation is working, even if no sunset provision is enacted.
---------------------------------------------------------------------------
    As noted above, we would be pleased to work with the Committee, its 
staff and the interested parties on these or any other issues related 
to our proposal. We have been greatly encouraged by the generally 
positive reaction so far, and hope that balanced, comprehensive and 
effective legislation to address this important issue can be introduced 
and enacted in the near future.

    Mr. Smith. Thank you, Mr. Sigall.
    Mr. Adler.

    TESTIMONY OF ALLAN ADLER, VICE PRESIDENT FOR LEGAL AND 
  GOVERNMENT AFFAIRS, ASSOCIATION OF AMERICAN PUBLISHERS, INC.

    Mr. Adler. Thank you, Mr. Chairman, Mr. Berman, Ms. 
Lofgren.
    As both users and producers of copyrighted works, book 
publishers have considerable experience with the frustration 
caused by the orphan works problem in seeing necessary 
permissions to incorporate photos, illustrations, and other 
discrete third-party copyrighted works into the histories, 
biographies, and other kinds of literary works they publish. 
AAP was gratified to learn that the Copyright Office report 
recommended the same basic framework that the book publishing 
community has proposed, and we have been hopeful of reaching a 
consensus since learning that representatives of the library, 
higher education, museums, and scholarly society communities 
have endorsed an initiative that was strikingly similar to the 
AAP proposal in almost all key respects.
    In general, we think the Copyright Office did an excellent 
job in its report, wisely rejecting a variety of orphan work 
proposals that seemed excessively complex, discriminatory, 
costly, or bureaucratic in favor of advocating a relatively 
straightforward flexible and self-executing scheme. By its 
terms, the Copyright Office proposal may be viewed as a fine-
tuning of statutory law because it would not impose any new 
prerequisites for registration or enforcement of copyright or 
in any way affect the duration of copyright, the scope of 
copyright liability, or the applicability of fair use or other 
defenses against infringement.
    However, AAP, like other orphan works stakeholders, does 
have some concerns about the Copyright Office's draft statutory 
language to implement its recommendations. With respect to the 
important issue of the conduct of a reasonably diligent search, 
AAP generally agrees with the Copyright Office approach and we 
think that the Copyright Office has provided helpful 
explanations and examples in its report which should be 
included in legislative history to inform how the analysis and 
factors will be employed in determining whether a particular 
search satisfies the statutory standard, but we have some 
questions regarding when it should be appropriate for an orphan 
work user to qualify for the statutory limitation on remedies 
in reliance on the results of a previous third-party search 
rather than a user's own reasonably diligent search, and we 
think that we need further detail in the statutory language and 
explanations and legislative history on three sets of issues:
    First, clarifying that a reasonably diligent search 
conducted by the user's employees acting within the scope of 
their employment or by a third-party acting in an agency 
capacity on behalf of the user should qualify the user for 
statutory limitation on remedies in the same way as would a 
search conducted by a user.
    Secondly, we want to clarify that any person who engages in 
a related infringing use of the same work as the user who 
conducted a reasonably diligent search should qualify for the 
statutory limitations on remedies based on the user's search 
without conducting their own reasonably diligent search at 
least where the related infringing use occurs pursuant to a 
license from the user or the user's licensee. The example in 
our industry would be if an author has conducted the reasonably 
diligent search, we would hope that the publisher, the printer, 
the licensee who is authorized to do paperback versions of the 
book would not all have to do their own separate reasonably 
diligent searches in order to rely on the limitation of 
remedies.
    Third, there is the important other situation of so-called 
piggybacking on a previously conducted search, but in those 
instances, there would be a second user of the work who is not 
tied in any way to the original user by a license or other 
basis for asserting the claim of legal privity and the use of 
the work by the second user would be different from and 
unrelated to the use of the work by the original user. Our 
concern there is that if the standard is simply one of 
reasonableness under the circumstances, that may lead second 
users to do nothing other than determine whether a previous 
reasonably diligent search has been conducted by another user 
in which case they would perpetuate a mistaken notion that 
orphan works is a designation which adheres to the work in 
question and creates a status for the work that governs all of 
its future uses by any users. This would be contrary to the 
more accurate and appropriate view that orphan works 
designation actually applies to the work only in connection 
with a particular use by particular user or users.
    The attribution requirement that the Copyright Office would 
also require in order for the user to be able to rely upon the 
statutory limitation of remedies is somewhat troubling. The 
attribution requirement, predictably in these kinds of cases if 
we are trying to identify the author and the copyright owner, 
will be not terribly reliable, and in those circumstances, we 
are concerned that requiring attribution as a condition for 
obtaining the limitation on remedies is likely to mean that an 
emerging copyright owner will sue and basically attack the 
attribution to make the individual user not subject to the 
limitation on remedies. So we would hope that this could be 
clarified.
    There are other respects in which we would hope to be able 
to clarify the plan proposed by the Copyright Office. We would 
hope most of that could be done through examples and 
illustrations contained in legislative history while retaining 
a fairly simple statutory framework for orphan works treatment.
    [The prepared statement of Mr. Adler follows:]

                   Prepared Statement of Allan Adler

    Thank you for inviting me to appear here today on behalf of the 
Association of American Publishers (``AAP'') to discuss the U.S. 
Copyright Office ``Report on Orphan Works.''
    As you may know, AAP is the principal national trade association of 
the U.S. book publishing industry, representing some 300 member 
companies and organizations that include most of the major commercial 
book and journal publishers in the United States, as well as many small 
and non-profit publishers, university presses and scholarly societies. 
AAP members publish hardcover and paperback books and journals in every 
field of human interest. In addition to publishing print materials, 
many AAP members are active in the emerging market for ebooks, and also 
produce computer programs, databases, Web sites and a variety of 
multimedia works for use in online and other digital formats.

                               BACKGROUND

    AAP has been on the public record urging the need to resolve the 
problem of ``orphan works'' at least since the proceedings that 
resulted in the issuance of the Copyright Office ``Report on Copyright 
and Digital Distance Education'' in May 1999. Book publishers 
understand the central issue to concern how U.S. copyright law might 
permit uses of a copyrighted work that implicate the exclusive rights 
of the copyright owner, when the uses are not authorized by any of the 
statutory limitations or exceptions applicable to such rights and the 
would-be users cannot locate the copyright owner in order to obtain 
required permission.
    As both users and producers of copyrighted works, book publishers 
have a fundamental interest in advocating the widespread availability 
and use of copyrighted works consistent with established principles of 
copyright law. They also have considerable experience in seeking 
necessary permissions to incorporate photographs, illustrations and 
other discrete, third-party copyrighted works into the histories, 
biographies and other kinds of copyrighted literary works they publish.
    For these reasons, book publishers fully understand the frustration 
that can arise when the desire to incorporate a third-party work as 
part of a new work being prepared for publication is thwarted by a 
concern over potential infringement liability based not on the 
copyright owner's refusal to authorize such use of the third-party work 
but on the inability of the publisher--or author--of the new work to 
locate that copyright owner in order to request the permission that is 
necessary to legally make the intended use.
    When the Copyright Office invited public comment on ``orphan 
works'' in a ``Notice of Inquiry'' published early last year, AAP 
(working jointly with the Association of American University Presses 
and the Software and Information Industry Association) submitted 
Comments and Reply Comments that urged modest revisions in copyright 
law to mitigate the risk of infringement liability, and thereby 
encourage otherwise infringing uses of copyrighted works, in the 
typical ``orphan works'' situation where permission for use is required 
by law but cannot be obtained due to the user's inability to locate the 
copyright owner. AAP and several member publishers subsequently 
participated in the public roundtable discussions of ``orphan works'' 
that were conducted by the Copyright Office.

              THE COPYRIGHT OFFICE REPORT ON ORPHAN WORKS

    When the Copyright Office published its ``Report on Orphan Works'' 
in January of this year, AAP was gratified to learn that the Report 
recommended the same basic framework that the book publishing community 
had proposed for dealing with the ``orphan works'' problem. AAP had 
been hopeful that a consensus would grow around that basic framework 
after its review of submitted Comments and Reply Comments made clear 
that numerous representatives of the library, higher education, museum 
and scholarly society communities had endorsed a proposal from the 
Glushko-Samuelson Intellectual Property Clinic at American University 
that was strikingly similar to the AAP proposal in almost all key 
aspects.
    In general, AAP believes that the Copyright Office did an excellent 
job of evaluating the diverse ideas that were proposed in submitted 
Comments and Reply Comments regarding how the uncertain status of 
``orphan works'' might be addressed so that users of such works will 
not be needlessly discouraged from incorporating them in new creative 
efforts or making them available to the public.
    From the perspective of the book publishing community, the 
Copyright Office wisely rejected a variety of proposed ``orphan works'' 
schemes that seemed excessively complex, discriminatory, costly or 
bureaucratic, in favor of advocating a relatively simple, uniform, 
flexible and self-executing way of addressing the problem. Its 
minimalist approach seems calculated to require the fewest possible 
changes to current U.S. copyright law, no impact on U.S. obligations 
under international copyright agreements, and the least possible 
bureaucratic impact on governmental entities, as well as on owners and 
users of copyrighted works. By its terms, it may be characterized as a 
``fine tuning'' of statutory law that would not impose any new 
prerequisites for registration or enforcement of copyright, or in any 
way affect the duration of copyright, the scope of copyright liability, 
or the applicability of ``fair use'' or other defenses against 
infringement.
    The core concept of the Copyright Office recommendation, which also 
constitutes the basic premise of the proposal advanced by AAP, is 
fairly straightforward:
    If the infringing user of a copyrighted work has first performed a 
reasonably diligent but, ultimately, unsuccessful search to locate the 
copyright owner to obtain permission before engaging in an infringing 
use of the work, then that infringing user generally would be entitled 
to have the benefit of limitations on the compensation and injunctive 
remedies that the copyright owner could obtain if the owner turns up 
subsequent to the commencement of such infringing use and sues on the 
grounds of infringement.
    Clearly, however, the Copyright Office draft legislative language, 
despite or, perhaps, because of its relative brevity, is already 
generating concerns regarding the potential implications of an enacted 
statutory scheme for different ``orphan works'' stakeholders, including 
book publishers.
    For example:
    Reasonably Diligent Search: AAP generally agrees with the Copyright 
Office that its requirement for the user to conduct a ``good faith, 
reasonably diligent search'' to locate the copyright owner, as one of 
two threshold eligibility requirements to qualify for the limitations 
on remedies, should be deermined on a case-by-case basis measured 
against a flexible standard of reasonableness in the totality of the 
circumstances. Moreover, in our view, the Copyright Office Report 
contains a number of helpful explanations and examples that clarify the 
kind of analysis and factors to be employed in determining whether a 
particular ``search'' satisfies the statutory standard. The inclusion 
of this guidance in the legislative history of the related statutory 
language, combined with the prospect that private stakeholders will 
develop and highlight the availability of voluntary guidelines and 
ownership information resources on a sector-by-sector basis within the 
communities that use and produce copyrighted works, should make it 
unnecessary for Congress to provide a more detailed treatment of the 
standard in statutory language, especially if the legislative history 
is further developed to address other issues related to the meaning of 
the standard issue.
    However, with respect to the question of when it should be 
appropriate for a would-be user to be eligible for the limitations on 
remedies in reliance upon the results of a previous third-party search, 
rather than the user's own search efforts, AAP believes further detail 
in the statutory language, as well as explanations in the legislative 
history, may be warranted to address three sets of issues.
    First, it should be made clear that a reasonably diligent search 
conducted by a would-be user's employees acting within the scope of 
their employment, or by a third-party acting in an agency capacity on 
behalf of the user, will qualify the user for the statutory limitations 
on remedies in the same way as would such a search conducted by the 
user. Enactment of the proposed ``orphan works'' scheme will create new 
business opportunities in the marketplace for third parties offering 
professional search services, and AAP believes the statutory language 
itself should anticipate such a development.
    Second, it should be made clear that any person who engages in a 
related infringing use of the same work as the user who conducted a 
reasonably diligent search, should be able to qualify for the 
limitations on remedies based on the user's search where the related 
infringing use occurs pursuant to a license from the user or the user's 
licensee. For example, if the original user of the ``orphan work'' is 
an author who incorporates the work into a new work pursuant to 
conducting a search that meets the statutory standard, then the 
publisher of the new work, as well as the publisher's distributors and 
licensees, would also qualify for the limitations on remedies without 
having to each conduct their own search for the copyright owner of the 
original work. AAP urges that this form of ``piggybacking'' on a 
previously-conducted search should be addressed in the statutory 
language, with legislative history providing additional explanation and 
examples to clarify the kind of ``related'' infringing uses and users 
that would qualify for such reliance.
    Third, if possible, the statutory language should address other 
instances of potential ``piggybacking'' on previously-conducted 
searches that will arise in situations where the second user of the 
work is not tied to the original user by any license or other basis for 
asserting a claim of legal privity, and the use of the work by the 
second user is different from and unrelated to the use of the work by 
the original user.
    In its consideration of permissible reliance in the context of 
unrelated uses, the Copyright Office has taken the view that ``the test 
is whether it was reasonable under the circumstances for that second 
user to do so--there should not be any per se rule preventing or 
permitting one user's `piggybacking' on another's search.'' See Report, 
p. 96-97. While AAP is sympathetic to the idea of applying an objective 
``reasonableness'' standard in these determinations, there is a real 
danger that this view of the second user's ability to use the work 
under the protection of the limitations on remedies may lead such 
users, as a matter of practice, to not make any independent effort to 
locate the copyright owner other than to determine whether a previous 
search was conducted by another user. This could have the unfortunate 
effect of perpetuating the mistaken notion that ``orphan work'' is a 
designation which, once applied, adheres to the work in question and 
creates a status for that work that governs all of its future uses by 
all users, instead of reflecting the more accurate and appropriate 
notion that the designation applies to the work only in connection with 
a particular use by a particular user or users.
    AAP does not suggest that a subsequent unrelated user should never 
be permitted to reasonably rely on the results of a previous search 
conducted by another user. However, we urge that any treatment of this 
issue should avoid conveying the idea that a subsequent user would 
qualify for the limitations on remedies simply by reference to the 
previous search efforts of another user. The statutory language and 
supporting legislative history should make clear that, as a general 
rule, the responsibility to conduct a reasonably diligent search for 
the copyright owner prior to using an ``orphan work'' attaches to each 
use of the work, rather than to each user. This will help to ensure 
that a reasonable legal process established to provide for the use of 
``orphan works'' without undue risks of infringement liability will not 
degenerate into a means by which such works are treated, in common 
practice, as though they were no longer subject to copyright 
protection.
    Attribution: In addition to conducting a ``good faith, reasonably 
diligent search'' for the copyright owner, the Copyright Office 
recommendation requires that an infringing user of an ``orphan work'' 
must, ``throughout the course of the infringement, provide attribution 
to the author and copyright owner of the work, if possible and as 
appropriate under the circumstances,'' in order to qualify for the 
limitations on remedies. Insofar as U.S. copyright law contains no 
general requirement for attribution when third-party works are used, it 
is unclear why attribution should be required for a use under ``orphan 
work'' treatment, especially since the ``orphan work'' situation will 
predictably be one in which the accuracy of any attribution to the 
copyright owner frequently will be inherently suspect.
    In justifying its attribution requirement as a condition for 
obtaining the limitations on remedies, the Copyright Office claims that 
such notice will facilitate market transactions by alerting the author 
and copyright owner to the use of their work; preserve the author's 
ability to pursue ``moral rights''-type interests in the work; curb 
abusive use of such works under the ``orphan works'' scheme; and not 
impose undue burdens on the user. But, given the circumstances in which 
such notice will be provided, it is likely that the provided 
attribution in many instances may be more misleading than informative.
    The Copyright Office explains in its Report that the purpose of the 
attribution is not so much to identify the actual author or copyright 
owner, but to ``make it as clear as possible to the public that the 
work is the product of another author, and that the copyright is owned 
by another.'' See Report, p. 110. It also urges that the attribution 
requirement ``should be a flexible rule, and should not be interpreted 
in a strict way to unnecessarily create another obstacle'' to an 
``orphan works'' use. See Report, p. 112. But, while the inclusion of 
such comments in the legislative history will be helpful to ensure 
that, as the Copyright Office states, ``formalistic errors or similar 
omissions in the attribution should not be cause to disqualify the user 
from the orphan works category,'' AAP remains concerned that requiring 
attribution as a condition for obtaining the limitations on remedies 
could make a questionable attribution a litigation target for an 
emergent copyright owner who may want to challenge the infringing 
user's entitlement to such protection, notwithstanding the user's 
satisfaction of the ``reasonably diligent search'' requirement. 
Congress should consider whether, in light of these concerns, if 
attribution is to be required at all pursuant to the ``reasonable under 
the circumstances'' standard urged by the Copyright Office, it should 
not be made a condition for obtaining the limitations on remedies.
    Limitations on Remedies: Overall, AAP believes the Copyright Office 
has done a good job in developing and articulating proposed 
``limitations on remedies'' policies. Its handling of the availability 
of ``reasonable compensation'' for the copyright owner who comes 
forward subsequent to the commencement of a qualifying ``orphan work'' 
use seems fair and reasonable in most respects, as does its approach to 
the availability of injunctive relief. However, AAP does have a few 
concerns about the Copyright Office recommendations.
    Limitation on Remedies--Monetary Relief: Inherent in the very 
concept of ``orphan work'' treatment, as urged by AAP and recommended 
by the Copyright Office, is the expectation that the issue of 
``reasonable compensation'' is unlikely to arise in the vast majority 
of cases. If the ``reasonably diligent search'' requirements for 
obtaining limitations of remedies are implemented in good faith by 
would-be users of ``orphan works,'' such users will seldom, if ever, 
subsequently encounter a claim for monetary relief by the copyright 
owner. Nevertheless, in those cases where a copyright owner does 
subsequently surface, the point of the ``reasonable compensation'' 
provision is to put the owner and user, to the greatest extent 
possible, in the respective positions they would have occupied in an 
ordinary marketplace negotiation occurring prior to the infringing use, 
where the amount paid to the owner by the user would represent what a 
reasonable willing user would have paid a reasonable willing owner 
based on knowledge and evidence of comparable marketplace transactions.
    However, the copyright owners of certain types of works are 
apparently concerned that the proposed implementation of the 
limitations-on-remedies principle, which would eliminate the 
availability of an award of attorney fees and costs to the emergent 
copyright owner, as well as the availability of actual or statutory 
damages, may not provide sufficient economic incentive for them to 
pursue a claim of infringement in circumstances where the infringing 
user unreasonably refuses to pay reasonable compensation to the owner. 
For this reason, in the interest of fairness, AAP would support a 
revision of the Copyright Office's proposed statutory language that 
would give the federal courts discretion to award reasonable attorney 
fees and costs to a prevailing plaintiff-owner if the court finds that 
such fees and costs were incurred as the result of bad faith or other 
unreasonable behavior on the part of the infringing user in dealing 
with an owner's request for reasonable compensation.
    In addition, even if they are not defined in statutory language, 
AAP would urge Congress to make sure that the practical meaning and 
application of ``reasonable compensation,'' ``direct or indirect 
commercial advantage,'' and other key terms that establish the 
limitations on monetary relief in the statutory scheme are fully 
explained in legislative history. Among other things, the legislative 
history should make clear that actions by the infringing user other 
than selling copies of the infringed work may constitute ``commercial 
advantage,'' and that the provision's purpose in providing a safe 
harbor for infringing uses ``performed without any purpose of direct or 
indirect commercial advantage'' is not to lay a foundation for the 
assertion of a general ``personal use'' or ``private use'' exemption 
from infringement liability but only to effectuate the limitations on 
remedies for non-profit infringing uses that qualify for ``orphan 
work'' treatment, regardless of whether the user is an individual or an 
entity.
    Limitation on Remedies--Injunctive Relief: AAP generally supports 
the distinctions that are drawn in the Copyright Office proposed 
statutory language regarding the availability of injunctive relief. 
However, AAP believes that the attempt by the Copyright Office to use 
the concept of ``derivative works'' in describing the circumstances 
where injunctive relief may not be awarded to ``restrain the 
infringer's continued preparation and use'' of a new work that 
``recasts, transforms or adapts'' the infringed work is awkward, 
confusing and inconsistent with the kind of results that the Copyright 
Office seeks to effectuate as described in its Report. For example, 
although the discussion in the body of the Report clearly contemplates 
that this limitation shall apply where the infringed work is a photo or 
manuscript that the infringing user incorporates into a new literary 
work, such a use of the infringed work does not constitute the creation 
of a ``derivative work'' based on that infringed work. Moreover, it is 
questionable as to whether the concept of ``incorporation'' of the 
infringed work into a new work is in any meaningful way captured by the 
terms in the draft statutory language that characterize how the use of 
the infringed work in connection with the new work affects the 
infringed work (i.e., it is not clear that such use ``recasts, 
transforms or adapts'' the infringed work).
    AAP believes that these issues are more drafting problems than 
disagreements over the concept of limiting injunctive relief, and 
believes they can be addressed in a manner that is consistent with the 
Copyright Office recommendation in this area. However, there is another 
issue regarding the limitation on injunctive relief that was not 
addressed in the Copyright Office report but warrants your 
consideration.
    AAP believes that a serious problem of unfairness to copyright 
owners and, potentially, for U.S. adherence to its international treaty 
obligations will arise if State entities are permitted to claim the 
proposed ``limitation of remedies'' protection for their attempts to 
engage in ``orphan works'' use.
    As the result of a series of federal court decisions on the 
sovereign immunity of States under the Eleventh Amendment, State 
entities cannot be liable for monetary damages resulting from their 
acts of copyright infringement. They may, however, be subject to 
injunctions prohibiting further infringing use of copyrighted works. 
Since the proposed ``orphan work'' scheme would, in some circumstances, 
allow the copyright owner of the infringed work to obtain monetary 
damages (in terms of court-determined ``reasonable compensation'') but 
not injunctions, letting State entities avail themselves of the 
``orphan work'' scheme would mean that a copyright owner who comes 
forward to confront a State entity that is an infringing user would be 
unable to get either an injunction (under the ``orphan works'' scheme) 
or, if the State entity balks at providing ``reasonable compensation,'' 
a monetary award (under the existing case law) and, thus, would be left 
with no recourse. This would be a patently unfair result, which almost 
certainly would violate U.S. obligations under the TRIPs Agreement, 
among others. Accordingly, in order to avoid this situation, the 
``orphan work'' scheme should not be available to limit injunctive 
relief against a State entity unless the State is willing to waive its 
sovereign immunity in connection with its entities' ``orphan works'' 
uses.
    Sunset: The Copyright Office recommendation would ``sunset'' the 
``orphan works'' scheme 10 years after the date of enactment. This 
makes no sense to AAP because the impact of such a ``sunset'' 
requirement is likely to be extremely disruptive to infringing users 
who have relied on the protection of the statutory ``orphan works'' 
scheme for ongoing infringing uses of infringed works. If the goal of 
the ``sunset'' requirement is to permit Congress to evaluate the way in 
which the ``orphan works'' scheme has operated, it makes more sense to 
impose a ``Report to Congress'' requirement whereby the Copyright 
Office can conduct its evaluation and report its findings to Congress 
without creating problems for infringing users in their reliance on 
``orphan works'' treatment of their infringements.
    Effective Date: Although the issue of an effective date for 
implementation of the statutory ``orphan works'' scheme was not 
addressed by the Copyright Office, AAP believes the effective date 
should be the date of enactment. However, we understand that some 
stakeholders may want to delay the effective date for implementation in 
order to provide time for their communities to become familiar with the 
intended operation of the enacted scheme, and to develop the voluntary 
guidelines and owner information resources that will help facilitate a 
fair and efficient implementation of ``orphan works'' treatment. 
Accordingly, AAP would not be opposed to a delayed effective date of 
one year after the date of enactment.

    Conclusion
    AAP is aware of problems that photographers, museums and certain 
other users and producers of copyrighted works claim the Copyright 
Office proposal will cause for their constituencies. Some of these 
stakeholder concerns may require only a tweaking of the Copyright 
Office draft legislative language so that it more accurately reflects 
and properly implements certain policy and operational objectives that 
are specifically discussed in the body of the Report; others, however, 
may require dealing with more organic complaints regarding the overall 
Copyright Office proposal and its alleged inadequacies from the 
perspective of these and other communities of users or producers of 
copyrighted works.
    Book publishers are ready, willing and able to work with Congress, 
the Copyright Office and all interested stakeholders to refine the 
Copyright Office draft legislative language and implement its 
underlying core concept for addressing the ``orphan works'' problem. In 
the interest of avoiding the pitfalls of attempting to craft 
unnecessarily lengthy and detailed statutory language, AAP urges that 
efforts to resolve outstanding issues should focus, wherever 
appropriate and to the greatest extent possible, on the creation of a 
negotiated consensus legislative history that incorporates specific 
examples and illustrations to clarify the purpose and intended 
operation of the ``orphan works'' statutory scheme.
    Once again, thank you for this opportunity to present AAP's views 
on the Copyright Office ``Report on Orphan Works.''

    Mr. Smith. Thank you, Mr. Adler.
    Mr. Trust.

TESTIMONY OF DAVID TRUST, CHIEF EXECUTIVE OFFICER, PROFESSIONAL 
                 PHOTOGRAPHERS OF AMERICA, INC.

    Mr. Trust. Thank you, Mr. Chairman.
    Mr. Chairman and Ranking Member Berman and Members of the 
Committee, we thank you for the opportunity to testify 
concerning the Copyright's report on orphan works. As you 
mentioned, I'm here representing Professional Photographers of 
America. We have also received endorsement or support from the 
American Society of Media Photographers, our good friends 
there. The Picture Archives Council of America, and the 
American Society of Picture Professionals have each contacted 
us separately to endorse the statement that we are about to 
make.
    The 130,000 professional photographers in the United States 
are quite literally the copyright owner next door, earning on 
average less than $35,000 a year. They are middle class 
American entrepreneurs found in every congressional district. 
While they are among the smallest copyright-owning businesses, 
photographers can easily create more than 20,000 works a year, 
each one having a relatively modest dollar value. They are the 
group most likely to have their works fall into the orphan 
category.
    Now, some would have you believe that all orphan works are 
willfully abandoned, that photographers don't value those 
works. It indicates a lack of understanding about the 
photographic industry. The truth is that an artist who marks 
his work and takes every reasonable step to make herself known 
can still have her images labeled as orphan. In the commercial 
context, this occurs at alarming frequency when editorial or 
advertising images are not properly credited or have metatags 
removed before publication to the internet.
    For the retail photographer, the threat comes from both 
unauthorized copies that do not contain attribution as well as 
from clients who make the photographer's contact information 
inaccessible by doing perfectly innocent things like gluing 
images into albums. Quite contrary to the Copyright Office's 
statement, 90 percent of our members mark their work. They are 
available.
    Now, because of their position in the marketplace and the 
ease with which their work falls into orphan status, a change 
in the law that might only cause a ripple for a large 
corporation is enough to capsize the person earning power of 
photographers and other visual artists. Unfortunately, it is 
our feeling that the Copyright Office proposal on orphan works 
while well-intended effectively tosses independent visual 
artists over the side of the copyright boat. It attempts to 
correct a bad situation by creating another bad situation.
    Of particular concern with the proposal is the limitation 
on and in some cases the elimination of monetary damages, the 
denial of any monetary relief if the infringer's use of the 
orphan work is not for commercial advantage and if the 
infringer stops the use when notified by the rightful owner. 
The proposal fails to recognize that for the vast majority of 
professional photographers, noncommercial personal use copying 
undermines the entire market for their work. In addition, most 
photography infringements have long been completed by the time 
they are discovered. So requiring that an infringer cease the 
infringement is at best meaningless.
    If enacted, this provision would create the perverse result 
of a copyright owner proving infringement but receiving no 
monetary award at all, no compensation, no legal fees, no 
costs, no reasonable royalty, just a congratulatory handshake 
and a bill from her attorney. We find this to be patently 
unfair.
    Now, we do understand that this elimination of damages for 
certain orphan infringements was included to address the 
concerns of nonprofit museums, libraries, and archives. We want 
to be part of finding a solution. However, we implore the 
Committee to use a scalpel rather than a chain saw when carving 
out an exemption for such uses. The standard in the proposal is 
simply too broad. Even in cases where reasonable royalty is 
called for, the Copyright Office proposal will not work in the 
real world. For almost all visual artists, and orphan works 
infringement will never generate enough in damages to make a 
suit economically viable or even to make a threat of such a 
lawsuit credible. There is no incentive for individuals of ill 
will not to claim every work is an orphan work.
    Some creators have suggested making attorney fees available 
in order to solve this problem. While we believe this to be a 
reasonable solution, our friends in the user community don't. 
This apparent impasse points to a larger problem. The fact is 
individual copyright owners, whether of regular or orphan 
works, find it economically impossible to gain any sort of 
meaningful relief through the courts. Without access to 
statutory damages and attorney fees, enforcing rights in 
Federal District Court simply is not a real option.
    In order to solve the damages issue for orphan works and to 
provide relief for individual copyright owners, we propose the 
creation of an optional administrative proceeding to decide low 
value copyright cases, a small claims-type procedure. Elements 
of our proposal were included in our response to the Copyright 
Office's Notice of Enquiry, and we've included proposed 
statutory language in our written testimony as well. We believe 
that orphan works and the accessibility of damages are 
inseparably linked. How could they not be? Without a mechanism 
for encouraging payment by infringers, the orphan works 
proposal is simply a way to skirt a creator's rights.
    Concluding, we are eager to see the problem of orphan works 
solved. We recognize that it is a problem. However, we must 
ensure that our legislative cure for the problem is free of 
side effects that will do irreparable harm to an entire class 
of copyright owners. We urge you to consider the devastating 
affect this legislation would have in its present form. Again, 
let us not try to solve a bad situation by creating another bad 
situation.
    Mr. Chairman and Members of the Committee, again, we thank 
you for the opportunity to bring the problems of independent 
copyright owners to your attention.
    [The prepared statement of Mr. Trust follows:]
                  Prepared Statement of David P. Trust
    Mr. Chairman, Ranking Member Berman and members of the committee, 
thank you for the opportunity to testify regarding the Copyright 
Office's proposal on orphan works.
    As the CEO of Professional Photographers of America, I am here 
today representing 33,000 professional photographers. This includes PPA 
and it affiliates, as well as three other organizations that have 
endorsed our testimony: the International Association of Professional 
Event Photographers, Commercial Photographers International and the 
Student Photographic Society.
    According to the latest available data, professional photography is 
a nearly $18 billion a year industry. While the industry as a whole is 
a robust contributor to the economy, the individual businesses that 
make up the industry are fragile. The 129,000 individual professional 
photographers in the United States are quite literally the copyright 
owner next door. They work an average of 45 hours a week and earn less 
than $35,000 a year. As middle-class Americans and entrepreneurs, 
photographers typically work in studios having less than three full-
time employees and they can be found in every Congressional district.
    While they are among the smallest copyright-owning businesses, 
photographers also produce a higher volume of works than other artists. 
While almost all other copyright industries are based on the mass 
distribution of a limited number of relatively lucrative copyrights, a 
photographer will create more than 20,000 works a year with each 
copyrighted image having a relatively modest dollar value.
    Because of these business conditions, we believe photographers are 
also the group most likely to have their works fall into the orphan 
category. While some groups would have you believe that all orphan 
works are willfully abandoned, the truth is that a photographer or 
other visual artist who marks his work and takes every reasonable step 
to make himself known to the world can still have his images labeled as 
orphans. In the commercial context, this occurs with alarming frequency 
when images published in editorial or advertising spreads are not 
properly credited. For the retail photographer, the threat comes from 
both unauthorized copies that do not contain attribution, as well as 
clients who make the photographer's contact information inaccessible by 
doing perfectly innocent things like gluing images into albums.
    This susceptibility to having their works labeled as orphans and 
the business model dictated by the marketplace, means that a change in 
the law that might only cause a ripple for a large corporate copyright 
owner is enough to capsize the earning power of photographers and other 
independent visual artists.
    Unfortunately, we believe the Copyright Office proposal on orphan 
works, while certainly well intentioned, effectively tosses independent 
visual artists over the side of the copyright boat.
    The fact remains, and the Copyright Office acknowledges in its 
report, that individual copyright owners often find it impossible to 
gain any sort of meaningful relief under the current copyright statute. 
The orphan works proposal makes a bad situation worse by exponentially 
increasing the risks for individual copyright owners who are forced to 
pursue an infringer in court.
    That being said, PPA does not oppose the creation of a properly 
constructed orphan works regime. Such a system would still limit 
damages against infringers who have made a reasonable, good-faith 
search for the current owner of a work and have failed to locate them. 
However, it would also recognize the value of an artist's work and 
provide a mechanism that makes it economically feasible for artists to 
enforce their rights against infringers who refuse to pay a reasonable 
royalty.
    Before providing PPA's proposal for such a system, we offer our 
comments and suggestions on the original proposal by the Copyright 
Office.

          SECTION 514(A): SEARCH AND ATTRIBUTION REQUIREMENTS

    We believe the Copyright Office's requirement of a good faith, 
reasonably diligent search combined and attribution when possible, 
provides a solid framework for determining if a use qualifies as an 
orphan work.
    However, we do have two reservations regarding this section of the 
proposal. The first comes not from the statute itself, but from the 
Copyright Office's unwillingness to lead groups of creators and users 
to develop guidelines to assist courts in determining what constitutes 
a ``good faith, reasonably diligent search'' and when attribution is 
appropriate.
    We agree wholeheartedly with the assessment that a statutory 
definition of a good faith, diligent search would be too rigid; 
however, the Copyright Office's notion of allowing various user and 
artists' groups to develop their own criteria independent of another 
provides too much opportunity for confusion and chaos. By having 
multiple ``reasonable'' search standards within the same industry, the 
Copyright Office proposal increases the probability of conflicting 
judicial decisions. This lack of guidance will make it more difficult 
for people of good faith to know when their search is sufficient, and 
allows those with less than noble intentions an opportunity to skirt 
the law.
    While the development of search guidelines under the oversight of 
the Copyright Office is our preference, PPA is also willing to consider 
the inclusion of very concrete examples of what does and does not 
constitute a reasonable search in the legislative history of any orphan 
works bill that is passed. While such legislative history would not be 
all-inclusive, it would provide at least provide some minimal guidance 
to judges and yield greater predictability in their decisions.
    Our second concern deals with the language of the subsection on 
attribution. We believe the requirement of attribution when ``possible 
and as appropriate'' serves the goal of making it easier for the 
rightful owner of an orphan work to discover its use. However, there 
have been some concerns regarding the possibility that a user would 
accidentally mislabel a work. The concern is that subsequent viewers of 
the work might be misled as to the true identity of the work's author. 
In order to mitigate this problem, PPA proposes that in addition to 
requiring attribution when appropriate, the statutory language should 
also require that user indicate that the work is being used as an 
orphan work. This will provide a clear signal that any attribution of 
ownership is provisional and should not necessarily be relied upon by 
subsequent users.

      SECTION 514(B)(1): LIMITATIONS ON REMEDIES: MONETARY RELIEF

    The limitation on remedies section is where we feel the Copyright 
Office proposal falls apart. While we firmly believe that some 
reduction in available damages is both necessary and desirable in an 
orphan works setting, those damages must also be accessible.
    The language of the proposed statute puts the burden on the 
copyright owner to prove their work had fair-market value and creates a 
rapid race to the bottom when it comes to compensation for artists. 
Under this proposal, the less an infringer pays for other photography, 
the more advantageous their position when defending against an 
infringement claim.
    The entire approach to this issue turns the traditional assessment 
of copyright damages on its head. Rather than look at the harm done to 
the copyright owner, this proposal attempts to impose the terms of a 
fictional transaction that looks primarily at what a reasonable buyer 
would have been willing to pay. In addition to giving a ``buyer's 
veto'' to an infringer, this approach completely ignores the fact that 
different artists use radically different business models. For 
instance, large corporate owners that license millions of royalty-free 
images a year, semi-professionals who are just happy to be published 
somewhere and independent professionals who normally sell only limited 
usage rights all suffer differing degrees of harm when their work is 
infringed. Unfortunately, the proposal at hand forces all of these 
copyright owners into a single mold, without regard for their 
individual circumstances.
    In addition to ignoring the damage to the copyright owner, limiting 
compensation to a ``reasonable royalty'' creates a system in which it 
is impossible for independent artists to enforce their rights. While a 
``reasonable royalty'' seems perfectly rational in theory, the reality 
is that when you are paying hundreds of dollars an hour in legal fees, 
the damages in this proposal become worthless. For almost all visual 
artists, an orphan works infringement will never generate enough in 
damages to make a suit economically viable or even to make the threat 
of such a lawsuit credible. As such, the Copyright Office proposal 
provides no incentive for an infringer to voluntarily pay for their use 
of an orphan work. We believe that any orphan works legislation must 
provide for compensation that is accessible in the event that an 
infringer refuses a reasonable request for payment.
    If the ``reasonable royalty'' standard is ultimately adopted, PPA 
recommends that in addition to providing some cost-effective mechanism 
for collecting damages, that the burden of proving damages be shifted 
so that the only evidence the artist needs to come forward with is the 
amount the artist, or an artist who is similarly situated, would 
normally charge for such a use. The burden would then be on the 
infringer to show that the claimed royalty is not a reasonable one.
    While the reasonable royalty approach to damages is problematic, it 
pales in comparison to the damage that the elimination of all monetary 
relief for uses without any purpose of direct or indirect commercial 
advantage.
    This provision ignores the fact that for many photographers 
eliminating monetary relief for non-commercial uses destroys the 
economic value of their works. That is to say, for the vast majority of 
professional photographers, allowing non-commercial personal use 
copying of purported orphan works would ravage the entire market for 
their work. In addition, most photography infringements have long been 
completed by the time they are discovered, so requiring that an 
infringer cease the infringement is, at best, meaningless.
    This provision is particularly harmful in that it traps artists who 
make every reasonable effort to make themselves known to the world, but 
who fall victim to a third party who fails to properly identify the 
artist when distributing the work.
    Two brief examples:

          Scenario A: A wedding photographer provides images to 
        a client and properly marks the work. Later, the wedding client 
        places the images in an album using adhesives that make viewing 
        the copyright information impossible. A few years pass, and the 
        memory of the client becomes clouded as to the exact identity 
        of their photographer. At that point, the child of the client 
        decides to distribute copies of the wedding album to the bride 
        and grooms' descendants--finding it impossible to identify the 
        photographer from the prints themselves or from his parents--he 
        proceeds with his plan under the orphan works exception. The 
        photographer discovers the distribution of the albums and 
        attempts to seek redress for the infringement.

          Scenario B: A photographer's work is used in an 
        advertising campaign. While the photographer leaves identifying 
        metadata in the digital file and marks any prints that leave 
        her studio, the standard in the advertising world is to not 
        provide a credit line when an agency publishes the work. A 
        subsequent user sees the image and wants to use it. Finding no 
        credit line identifying the photographer, this subsequent user 
        contacts the company whose product was advertised and perhaps 
        even the ad agency, but no one who currently works there can 
        recall who created the image or they simply refuse to take the 
        time to talk to him. The subsequent user then posts the image 
        his personal web page on an online community where the image is 
        copied thousands of times over.

    Under the proposed statute, neither of these photographers has a 
financial remedy for these infringements, even though they took 
reasonable steps to make themselves known or knowable to all subsequent 
users. In short, this provision of the statute creates not just a 
``trap for the unwary,'' but for the savvy rights holder as well.
    In its report, the Copyright Office alludes to the fact that this 
particular provision is designed to reduce the uncertainty non-profit 
libraries, museums and archives face when they display and reproduce 
massive collections of photographs legitimately believed to be 
orphaned. We are sympathetic to these concerns, but suggest that the 
legislative equivalent of a scalpel, rather than a chainsaw, be used to 
carve out a damages exception to address their concerns.

     SECTION 514(B)(2): LIMITATIONS ON REMEDIES, INJUNCTIVE RELIEF

    In contrast to the section on monetary relief, we believe that the 
limitation on injunctive relief is a reasonable one. We commend the 
Copyright Office for taking economic considerations into account and 
striking a fair balance between the rights of artists and the 
investment a subsequent user may make in creating derivatives from an 
orphaned work.

       SECTION 512(C) AFFECT ON RIGHTS, LIMITATIONS AND DEFENSES

    While we believe that this verbiage may simply be excess, we 
understand the desire of certain parties to make this point as clear as 
possible and we see no compelling reason to eliminate it.

                  SECTION 514(D)--THE SUNSET PROVISION

    Based on the public comments of organizations on both sides of the 
orphan works issue, it appears that there is broad agreement that 
whatever legislation is passed should not have a 10-year sunset 
provision attached to it.
    Rather than having all of the involved parties repeat their efforts 
in 2016, PPA supports language that would require the Copyright Office 
to report to the Congress on the effect of this legislation five years 
after passage. While it is our sincere hope that we will take the 
necessary time to develop legislative language that gets it right the 
first time, such a provision would afford a good opportunity to make 
any necessary adjustments to the legislation.

        ADDITIONAL RECOMMENDATIONS FOR ORPHAN WORKS LEGISLATION

    There are two items not contained in the Copyright Office proposal 
that we believe must be included in any legislation designed to address 
the issue of orphan works.
    The first item is a window of time between any passage of the Act 
and its effective date. Such an interval would allow time for owner and 
user groups to work together and develop reasonable search guidelines. 
It would also provide an opportunity to for organizations to set-up, 
promote and populate voluntary artist registries. As such, we recommend 
that no orphan works legislation become effective until two years after 
the date of passage.
    Our other recommendation is mentioned in the Copyright Office 
report on orphan works. It is our sincere belief that any orphan works 
legislation must contain provisions that make it possible for an 
independent artist to obtain the relief promised by the statute. 
Anything less would do significant harm to photographers, illustrators 
and other visual artists. Simply put, filing a federal copyright suit 
is simply not an option in any area where attorney fees and statutory 
damages are unavailable. Indeed, many photographers have discovered 
that under the current law the actual damages from almost all 
photographic infringements are too low to make a suit economically 
viable or even to make the threat of a suit credible. While this 
problem is currently limited to high-volume creators who find it 
practically impossible to register their work with the U.S. Copyright 
Office, the creation of an orphan works regime has the potential to put 
any copyright owner in this unenviable position.
    Some creators have suggested making attorney fees available in 
order to solve this problem. While we believe this to be a reasonable 
solution, our friends in the user community are quick to point out that 
the possibility of paying a large award of attorney fees has the net 
effect of making orphan works unusable.
    In order to solve this impasse, Professional Photographers of 
America proposes the creation of an administrative or other proceeding 
to decide low-value copyright cases; or, as some have called it a 
``small claims copyright court.''

                  THE COURT OF SMALL COPYRIGHT CLAIMS

    Elements of our proposal for the administrative adjudication of 
small copyright claims were included in our initial response to the 
Copyright Office's notice of inquiry. While the Copyright Office 
mentioned that this area was deserving of additional study in the 
orphan works report, it deemed the idea to be outside the scope of its 
assigned task. While that view may be technically correct, we believe 
that without some mechanism for making ``reasonable royalty'' damages 
accessible to artists, any proposed legislation on orphan works is 
simply unworkable.
    Regardless of the actual mechanism employed, we envision a ``court 
of small copyright claims'' that would offer the following features:

          If the actual damages claimed by a copyright 
        plaintiff are below a certain dollar limit, he or she may elect 
        to submit the claim to the court of copyright claims, rather 
        than federal district court.

          By submitting the dispute to this type of copyright 
        proceeding, the plaintiff will not be eligible for statutory 
        damages.

          Damage awards in this proceeding would be tied 
        directly to the value of the infringement. In order to produce 
        a sufficient deterrent to infringement, and to avoid the 
        creation of a de facto compulsory licensing scheme, damages 
        should be set at a small multiple of the actual damages, with a 
        higher damages multiplier applied when infringement is found to 
        be willful.

          A defendant in this administrative proceeding who 
        successfully proves an orphan works or innocent infringement 
        defense would only be liable for a reasonable royalty as 
        determined by the tribunal.

          All other defenses available under Title 17 would 
        apply.

          If the tribunal determines that an infringement claim 
        was brought frivolously, or if the defendant offered no non-
        frivolous defense, the tribunal may award costs and fees to the 
        opposing party.

          Copyright registration shall have no effect on the 
        availability of damages available in this proceeding. However, 
        in order to preserve and further the mission of the Copyright 
        Office and Library of Congress a work must be registered prior 
        to submitting a claim to this proceeding.

    We should also point out that such a copyright small claims court 
could also be useful in deciding disputes related to counter-
notifications issued under 17 U.S.C. Sec. 512(g). This will allow both 
sides to get an official determination as to whether online access to a 
particular work must be disabled in a timely fashion.

                               CONCLUSION

    Professional Photographers of America is eager to see a solution to 
the problem of orphan works. However, any legislative prescription 
aimed at curing this particular ill should be free of damaging side 
effects that will do irreparable harm to an entire class of copyright 
owners. As such, we ask the committee to take great care and 
deliberation before moving forward.
    We once again emphasize the fact that without an alternative to 
federal district court, the damages orphan works proposal will be 
impossible to obtain. As such, they provide no incentive to an 
infringer to honor a reasonable request for payment. This factor alone 
makes the Copyright Office's original orphan works proposal a vehicle 
for widespread harm to, and in some cases outright abuse of, the 
copyright interests of individual owners. We have attached sample 
legislative language detailing a mechanism that would make it possible 
to both limit damages against infringers of orphan works, while still 
making those damages accessible to a legitimate copyright owner.
    As we move forward, it is our hope that we can work with all 
parties to develop a solution that encourages the use of truly orphaned 
works and provides adequate relief to copyright owners when they 
surface.
    Mr. Chairman, Ranking Member Berman and members of the committee, 
we again thank you for the opportunity to bring the problems of 
independent copyright owners to your attention.

                               ATTACHMENT



    Mr. Smith. Thank you, Mr. Trust.
    Ms. Pallante.

  TESTIMONY OF MARIA PALLANTE, ASSOCIATE GENERAL COUNSEL AND 
  DIRECTOR OF LICENSING, THE SOLOMON R. GUGGENHEIM FOUNDATION

    Ms. Pallante. Thank you, Chairman Smith, Members of the 
Subcommittee. I appreciate the invitation to be here today.
    I would like to state for the record that my testimony has 
been endorsed by 18 cultural and educational organizations 
representing a combined 144,000 museums, libraries, 
universities, and archives and more than 135,000 independent 
historians, educators, artists, and scholars who want to make 
productive use of orphan works. It is our view that the orphan 
works amendment has one ultimate goal. It should help to make 
cultural heritage more broadly available to the public; 
therefore, it must give users the confidence necessary to take 
works outs of obscurity.
    Scholars, museums, libraries, and universities struggle 
every day to balance the rights of lost copyright holders on 
the one hand with the mission of making letters, manuscripts, 
and photographs available for educational purposes on the other 
hand. At times, we are all also custodians, that is we have 
millions of working works in our institutional collections and 
we care for these at our own expense to the ultimate benefit of 
the public. For us, the importance of an orphan works solution 
cannot be stressed enough.
    We would like to recognize the Copyright Office for its 
leadership on this topic over the past year. Their report on 
orphan works is a tremendous contribution. On balance, we found 
it to be accurate, insightful, and comprehensive. In fact, we 
and a majority of parties who commented during the office 
proceedings completely agree with many of its findings. Such 
consensus is remarkable in an undertaking as innovative as an 
orphan works amendment.
    For example, we agree with others that actual and statutory 
damages should be unavailable to a copyright claimant in an 
orphan works context. We agree that with respect to searching 
for a copyright owner, the standards of due diligence must be 
general and flexible. We agree that in order to be meaningful, 
orphan works must include unpublished works and works of 
foreign origin. And we agree that there should be some 
additional protection available to those of us who use orphan 
works for non-commercial purposes. These are complex points, 
but in our view, the Copyright Office got them right.
    This said, we do have a few concerns with the proposed 
statutory language. I should note, however, that we have spoken 
with Jule in the Copyright Office as well as others in the 
copyright industry, including Allan and the publishers, and we 
are confidence that these concerns can be addressed.
    First, we believe the statutory language should define 
reasonable compensation. We like and suggest the definition 
that is quoted in the report itself. We also believe there must 
be clear and thoughtful legislative history with detailed 
examples of compensation, including illustrations where the 
user is a nonprofit library, museum, archive, university, small 
publisher, or independent scholar and the use is typically 
free.
    Second, to qualify for this safe harbor provision, the 
copyright office suggests that a use must be made, quote, 
without any purpose of direct or direct commercial advantage, 
unquote. This phrase requires clarification. For example, as 
nonprofit institutions, we produce books in accordance with our 
educational missions, but we do sell them for the same reason 
we charge admissions to exhibitions, to cover the cost of 
production.
    We need confirmation that the creation and sale of mission-
related publications are uses undertaken without any purpose of 
direct or indirect commercial advantage. Likewise, though 
independent scholars may sometimes earn royalties, this does 
not make their activities commercial. On a related point with 
respect to the safe harbor, we agree that users should cease 
activity expeditiously if an owner emerges, but we hope the 
term can be clarified to allow users some time to actually 
verify the claims.
    Third, because orphan works will often, perhaps most often, 
be incorporated into other works of authorship, we would like 
to see language that more clearly defines the circumstances 
under which a user may avoid an injunction in cases of books, 
films, art works, and web sites.
    Fourth, we agree that users should credit authors when 
known but disagree that users should credit copyright owners. 
Crediting authors is a question of scholarship. The latter, 
crediting copyright owners, is pointing to err in the orphan 
context. We would hate to see additional confusion in the 
marketplace.
    Fifth and last, we oppose a sunset provision, but would 
like to see a follow-up study by the Copyright Office within 7 
years from the passage of legislation.
    In closing, we recognize that orphan works legislation is a 
complicated undertaking which requires consideration of diverse 
constituencies. We appreciate the concerns of photographers in 
particular. Photography is important to the cultural sector. In 
past days, we have had conversations with several 
representatives of this important community, including David, 
in an effort to better understand their issues. We are quite 
confident that Congress can achieve a solution that is fair to 
all.
    Thank you.
    [The prepared statement of Ms. Pallante follows:]

                  Prepared Statement of Maria Pallante




    Mr. Smith. Thank you, Ms. Pallante.
    Let me say at the outset before I direct my questions to a 
particular witness that it is my impression there is, with the 
possible exception of the photographers, general agreement on 
say, 80 to 90 percent of the statutory language that has been 
offered by the Copyright Office. And we'll come back to the 
photographers in a minute, but I saw you nod your head, Ms. 
Pallante, and assume that's true, Mr. Adler, based upon your 
testimony as well.
    Mr. Sigall, I just want to thank you for the work that the 
Copyright Office has done. Believe me, to achieve agreement on 
80 to 90 percent is a high level of accomplishment, indeed. So 
we appreciate all the effort that you put into it. In just a 
minute, I'm going to give you Mr. Adler a chance to respond to 
some of the concerns that have been mentioned, but on the way 
there, Ms. Pallante, I had a first question for you.
    Ms. Pallante. Yes.
    Mr. Smith. There were a number of examples that you gave 
where you felt that the statutory language could be improved if 
language was more clearly defined. One example you gave was 
reasonable compensation. I'm not sure you can define reasonable 
compensation. We'll see if they can come up with it. I think 
there's too many possible objects involved. I think usually we 
use the standard that's reasonable at that particular time 
involving that particular, as I say, object, and I don't know 
that you're going to be able to more clearly define that.
    However, just the fact that you think that that's 
achievable and the language can be defined in such a way that 
it would be helpful to your membership, I think is good. Also, 
as you know, there's already a fairly large carve-out for a 
memberships such as yours, and they've gone a long ways, I 
think, to try to accommodate some of your concerns. But I'm 
pleased to hear how optimistic you are about taking those last 
final steps.
    Mr. Trust, initially I was going to ask you to repeat all 
your concerns, but you did such a good job in your testimony, I 
think I'm going to skip directly to the response and give you a 
chance to respond to the suggestions that Mr. Sigall and Mr. 
Adler might make.
    Gentlemen, I wanted to ask you if you would respond 
directly to the concern by the photographers. I do think we're 
going to get there in the end, and I know that there's good 
faith negotiations that are ongoing and I hope you all will be 
able to conclude those negotiations in the next week or two, 
and I'm sure you will be able to; but how do you propose 
addressing the concerns of the photographers, if you intend to 
address them at all, and as I understand it, there are some 
areas for compromise, and would you fairly quickly go into 
those areas too?
    Mr. Sigall, we'll start with you and then go to Mr. Adler.
    Mr. Sigall. Thank you, Mr. Chairman, and thank you for the 
kind words. We are very pleased to have participated in this 
effort.
    I think with respect, a part of our testimony was designed 
to make sure we understand the different areas where the 
photographers claims are relevant. Some of it is relevant to 
the orphan works proposal and some of it is relevant to larger 
questions about enforcement of copyright generally. With 
respect to our proposal and the proposal to solve the orphan 
works problem, I think we've heard of two suggestions that 
might alleviate the problem.
    The first would be some exception to the limitation on 
remedies for the situation where the user refuses to negotiate 
with the resurfacing owner in good faith. There is a question 
of how you define that and how you get that language right, but 
in that situation, where the owner resurfaces and asks for 
reasonable compensation and there is no good faith negotiation, 
then perhaps at that point statutory damages and attorneys fees 
might become available for photographers who have timely 
registered their copyrights before the infringement occurred. 
So the current status quo rules would still apply.
    The caveat on that kind of solution is that you don't want 
to recreate the orphan works problem again by creating 
uncertainty in the mind of the user that they might be hit with 
that liability, but I think we can come to some language that 
avoids that.
    The second suggestion, I think which was mentioned in Mr. 
Trust's testimony, was the one about delaying the effective 
date of any legislation for a short period of time, maybe a 
year, which I think would help both in terms of helping 
individual creators start developing systems so that they can 
be found and located and also help develop some of the criteria 
for reasonably diligent search for both users and creators to 
understand what the scope of the orphan works designation would 
be.
    I think those are two suggestions to our proposal that 
would help address the problems.
    Mr. Smith. Thank you, Mr. Sigall.
    Mr. Adler, do you have anything to add to that?
    Mr. Adler. I would only say that I think the book 
publishing industry would support the recommendations made by 
Jule just now with respect to both attorneys fees and perhaps a 
delayed implementation date, effective date for legislation. We 
are somewhat in conflict over this issue because, of course, 
photographs are precisely the kind of third-party copyrighted 
work that book publishers exhaust a great deal of effort and 
resources in having to license. I think that probably Mr. Trust 
would agree that book publishers generally are not a source of 
situations where these works are being published generally 
without attribution. For the most part, the works are licensed 
and they are attributed.
    So I think we would have to think through what additional 
types of specific remedies we might be able to afford to them 
that would not have an adverse impact on the problem that 
already exists for book publishers with respect to photos that 
are orphan works.
    Mr. Smith. Okay. Mr. Trust, the two remedies that you heard 
Mr. Sigall just mention, how do they sound to you?
    Mr. Trust. Well, I think the exception to the remedies is 
certainly a step in the right direction, and we're grateful for 
that. We would like to pursue that, obviously, but please 
understand it still requires the filing of a lawsuit in Federal 
Court.
    Mr. Smith. Which, as you pointed out, not everybody can 
afford and especially if the royalty is so small it's hard to 
justify the cost?
    Mr. Trust. Yes, sir. If you're a $30,000 a year 
photographer, $35,000 a year photographer, $300 is a lot of 
money.
    Mr. Smith. Right.
    Mr. Trust. $300 determines whether or not your daughter 
gets to play soccer, your son gets to play baseball.
    Mr. Smith. What about a small claims court?
    Mr. Trust. Well, we're very much in favor of the idea of a 
small claims option for copyright issues. We think that that 
solves an awful lot of the problem. As far as the waiting 
period, that is wait a year, that is in our testimony. We're in 
favor of that.
    Mr. Smith. Okay. Thank you, Mr. Trust.
    I just want to say that we have been joined by the 
gentleman from South Carolina, Mr. Inglis, but I turned around 
and that individual has been replaced by the gentleman from 
California who has already been recognized today. I appreciate 
his attendance, but I look forward to others returning as well.
    The gentle woman from California, Ms. Lofgren, is 
recognized for her questions.
    Ms. Lofgren. Thank you, Mr. Chairman.
    I think we've actually made some progress here and I think 
that's very--it is not exactly what I thought it would be, but 
I think it is important and probably workable, although I think 
we have a few more things yet to do.
    One of the questions I had, it's easier conceptually to 
think about this in the context of nonprofit uses, frankly, 
than for profit uses, and yet the issue of orphan works isn't 
just about nonprofit use. It's about the culture being able to 
take advantage of material that's essentially been abandoned, 
and that is important for all of us, and sometimes that use 
will be a commercial use.
    I'm wondering, Mr. Adler, about your comment about 
reliance, if I could just explore that. I was trying to think 
of a circumstance where you did a diligent search, couldn't 
find the copyright owner, and so the publisher and the printer 
and the like rely on this, and then later the screen writer 
relies on it and is not in the chain that you've described. Why 
shouldn't the screen writer be able to rely on that?
    Mr. Adler. Well, Ms. Lofgren, I wouldn't disagree with you. 
I think that what we've asked for is that, in particular 
legislative history more so than in the statutory language, 
that we try to provide examples of these kinds of successive 
chains of interest. You can't call them chains of title because 
there's really no ownership interest that passes from hand to 
hand, but there clearly are certain types of business models 
where one party with full expectation of the other is going to 
be relying on, for example, the fact that when an author 
transfers copyrights to a publisher, they will provide in the 
contract a warranty with respect to the fact that they're not 
infringing somebody else's copyright, and the publisher will 
rely on that.
    Now, in contracts, there will be indemnification agreements 
that deal with the situations where those warranties fail. We 
don't have the ability to, I think, impose that on this kind of 
a process, but therefore I think it would be helpful if we 
could define the kinds of chains of relationships that should 
qualify for reliance upon a previously done reasonably diligent 
search in order to qualify for a subsequent limitation on 
remedies.
    Ms. Lofgren. I'm also thinking that when you get to 
reasonable damages, wouldn't it be important also in that to 
identify the risks taken by the individual who exploited what 
they thought was an orphan work? For example, I think Justice 
Breyer--I don't know if he was right or not--identified that 95 
percent of what is protected is not being exploited and a lot 
has just been abandoned. Some of that is film, and to restore 
film is very expensive, and you want to be sure before you sink 
that kind of money into it that you're not going to end up 
holding the bag for it financially.
    So I think we need to make clear that reliance, good faith 
reliance, after following the rules of trying to determine 
ownership is going to be protected in the financial area. Does 
anybody disagree with that?
    The other question I have is really whether the--I 
understand the language is purposely general, and I value that. 
On the other hand, having watched the patent courts go crazy 
with conjunctive relief, I'm a little bit nervous about things 
that aren't actually in statute and whether we can rely safely 
on examples and legislative history, because the one thing we 
do want to have is some certainty in the system. That's one of 
the values of a registration proposal that this would replace 
in my bill, and I don't have a problem with that because there 
are other values with this; but if we don't have certainty in 
the system so that people know if they do one, two, three, and 
four, that they're safe, then we really won't have achieved our 
goal.
    Is there a thought about how we could have that certainty 
here?
    Mr. Sigall. That was an issue that came up a lot in the 
discussions at the roundtables and during our study, most on 
the question of what exactly does a reasonable search entail; 
and the conclusions, especially from the user-based community, 
was that it's better to take what--uncertainly is also 
sometimes called inflexibility of having--because the 
situations of use and the types of works being used is so 
varied and can happen in different situations, you need that.
    What most people also agreed to do, though, was to start 
building voluntary criteria as to what a reasonable due 
diligent search is on a sector-by-sector basis for the film 
industry or for the photography industry.
    Ms. Lofgren. That makes sense.
    Mr. Sigall. And you can develop those. At some point, you 
can formalize those in some way to make clear. The question of 
exactly how to do that is one that's still open, but I think 
the best place to start is with the development of those kinds 
of criteria and then we can decide how to best----
    Ms. Lofgren. And that would be something the Copyright 
Office could take the lead on.
    Mr. Sigall. We could take the lead on it. Most user groups 
when we proposed having some sort of rule-making authority to 
codify these things were opposed to that, at least for now. So 
there's different mechanisms and vehicles by way that these 
criteria can be formalized, but at least we should start 
getting that out.
    Ms. Lofgren. You can could do it in a collaborative manner.
    Mr. Sigall. I think that's right, and we can get that 
information out to both users and owners so they know a little 
bit more about what the scope of the statute is.
    Ms. Lofgren. I realize my time is over. I wonder if I could 
just say--I know Mr. Trust wants to say something, but I just 
want to thank Ms. Pallante for her comment about creators 
versus copyright owners. I hadn't really thought about that, 
but you're right. Michael Jackson isn't The Beatles and we 
ought to make a distinction between the creator and the 
copyright holder.
    And I wonder if Mr. Trust had a final comment.
    Mr. Smith. Without objection, the gentlewoman is recognized 
for an additional minute, and that minute will be used by Mr. 
Trust, I think, to respond to the question.
    Mr. Trust. Congresswoman Lofgren , we certainly share some 
of your concern in that. We feel like there is some sort of, if 
not definition, some sort of samples or examples of what a 
reasonably diligent search would entail, if those don't exist, 
people of goodwill, good people who want to find the owners, 
won't know where to look in some cases people, and people who, 
frankly, just want to get around the issue, their feet won't be 
held to the fire, so to speak.
    So we share your concern. We certainly think if not in the 
legislation where it could be loosely defined, there needs to 
be quite a bit in the legislative history. We're in favor of 
having something even loose in the legislation just to help the 
process.
    Ms. Lofgren. Finally, and I don't expect an answer now, 
Professor Lessig did raise the issue of the Berne Convention 
and that there might be problems relative to this proposal. I'm 
wondering if anybody has thought about that, and if you have 
thoughts after the hearing, if you could share them.
    Mr. Smith. Thank you, Ms. Lofgren.
    The gentleman from California, Mr. Issa, is recognized for 
his questions.
    Mr. Issa. Thank you, Mr. Chairman.
    You know, I always wrestle with copyright law because 
trademark is kind of easy to understand. You have affirmative 
responsibility if you're to keep your trademark and you can own 
it in perpetuity. Patents are easy to understand because 
they're for a finite period subject to renewal fees and they're 
published and they're very clear and they're available in a 
single searchable data bank, and then you have this infinite 
amount of things, some of them great creative works, some of 
them a snapshot technically. And I'm not trying to put all your 
photographers with snapshots, but I'm a snapshot. So I have to 
look and say are all my pieces anything other than whatever 
happened when the shutter opened, some of which look okay.
    In the series of reforms that are being proposed, I have 
one particular question of why something isn't there, and that 
is in trademarks, we have constructive abandonment law. It's 
very clear that if you don't take reasonable steps, your 
trademark becomes abandoned. Now, that's obviously something 
you can end up in Federal Court debating because nobody ever 
thinks they abandon it. Even when they wrote ``we're never 
going to make that product again and we hate that name'', if 
somebody else starts using it, sometimes they change their 
mind.
    Is it possible that, in fact, we can put more material--of 
course, we're not exactly talking about orphans. We're talking 
about things that were intended to be orphans. Can we, in fact, 
find language that puts more into the public domain, more 
expediously by making it clear that, as Judge Breyer is 
paraphrased to have said, 95 percent of what is protected is, 
in fact, not in use?
    Mr. Sigall.
    Mr. Sigall. I think the main impediment to a system like 
constructive abandonment and trademark law is the international 
copyright system which prohibits the imposition of formalities 
on the enjoyment and exercise of the copyright. So to the 
extent like in trademark law or in patent law there's a 
requirement that you have file something with a centralized 
office or do some other formal requirement to maintain or enjoy 
the protection, that would run afoul of the international 
system which is incorporated in the TRIPS agreement with the 
WTO system.
    So there are external constraints on the kinds of 
mechanisms that you might apply to solve this problem, and a 
large part of our report is devoted to analyzing the various 
solutions that people have brought up and how they fit within 
that framework. Part of the reason we chose the recommendation 
that we did and I think for the reasons that the parties 
support it is because it avoids any of those problems, because 
it's an ad hoc case-by-case basis. It is somewhat more 
uncertain, but also more flexible, but it as avoids any 
problems or suggestion that we're imposing a formality or other 
requirement that is prohibit by the international system.
    So that's, I think, the benefit of the proposal that we put 
out, is that it's perfectly consistent with that system.
    Mr. Issa. I appreciate that, but isn't that creative 
ambiguity erased when the court rules and precedent becomes 
there and it does the same thing as what legislation would have 
done? You say it's case by case, but as we all know, case makes 
case law which makes law.
    Mr. Sigall. If the courts were to impost a hard and fast 
requirement that someone would have to--has to put notice in 
order to avoid being an orphan work or something like that, 
those situations might arise, but the question, that really 
remains to be seen, and we'll have to see how the courts go 
with that. I would hope that the courts are mindful of 
international obligations that we do live under in the 
copyright system.
    Mr. Issa. Okay. Mr. Trust, I have a question for you. 
Particularly as to photographers, the fact that you're not 
going to get the normal statutory presumption, which is a value 
tool and does put people on the defensive when they simply take 
something and say, Well, I didn't know who owned it, would you 
feel more comfortable--and I know you've covered some of this 
in your testimony, but wouldn't you feel more comfortable if, 
in fact, we said set some--and we talked about examples, but we 
created something that made it clear that there are standards 
and if those standards of search are not reasonably conducted, 
then, in fact, statutory damages would apply? Is that something 
you would feel is worth our effort to continue looking for?
    Mr. Trust. Well, I think of course. I think all of 
photographers would be feel better knowing that before someone 
declared something that they created an orphan, that there was 
some standard that other people could look at and determine 
based on that standard whether they had actually conducted a 
search. Now, for some, they may say, Well, I looked in the 
yellow pages; that was a search. You know what? It might be a 
search. In a specific case, that could actually be the search, 
but for the majority of works, yeah. I think photographers are 
nervous about that very fact, people saying I looked in the 
phone book, I didn't see the name that I thought might be 
there, therefore we used it because it was an orphan work. And 
if that's the case, the exact example that you're talking about 
will encourage people to participate more fully in the search 
process and conducting reasonably diligent searches.
    Mr. Issa. Can I suggest, and Mr. Chairman's indulgence, if, 
in fact, during a period of time somebody found you and paid 
you a royalty, would that be sufficient in your opinion for us 
to say that that should be codified as if somebody else could 
find you and somebody else negotiated and somebody else paid, 
then, in fact, there should be some peril that these eight 
people are finding you and paying and this one says he couldn't 
find you and thus says sorry?
    Mr. Trust. Clearly, yes. We think that there should be some 
peril if the others managed to find a photographer and then one 
claimed to have conducted a diligent search and couldn't find 
him. Now, the reason we say this is because photographers, 
active photographers, are not that hard to find. In this 
discussion, we're talking about works that have been created 
some time ago. Existing photographers, photographers who are in 
business, it will require little more than a Google search to 
find.
    Mr. Issa. Thank you for using my example.
    Mr. Trust. To find them. And so it won't take much to find 
active photographers. They're not hiding. These are active 
businesses. They want people to find them. They're not trying 
to keep themselves concealed.
    The issue really is completely around works that were 
created some time back, and those photographers may or may not 
still be in business.
    Mr. Issa. Thank you, Mr. Chairman. Thanks for letting me 
make my point.
    Mr. Smith. Sure. Thank you, Mr. Issa.
    Let me observe that I think there have been good questions 
today and reasonably enlightened answers, and this has been 
very helpful to me and I'm sure to others as well. Also, let me 
emphasize that I do hope that you all will come to an agreement 
on specific language that will help refine some of the terms 
that Mr. Adler mentioned and Ms. Pallante mentioned and Mr. 
Trust is worried about.
    Is it reasonable to feel that by the last week of this 
month you could some kind of a general agreement on the 
statutory language and have reached accommodations? Mr. Sigall, 
does that sound like a possibility to you?
    Mr. Sigall. That certainly sounds like a possibility to us. 
Most of the discussions have been taking place between the 
private sector representatives, and we've been informed of them 
and we've started to participate in them. I think that sounds 
reasonable from the Copyright Office's perspective.
    Mr. Smith. Mr. Adler, does that sound reasonable to you?
    Mr. Adler. There are other stakeholders who are, of course, 
not necessarily represented.
    Mr. Smith. Right, not present.
    Mr. Adler. But we have begun conversations with them and we 
would hope to be able to continue the dialogue toward that end.
    Mr. Smith. And toward the end of the month.
    And Ms. Pallante.
    Ms. Pallante. Yes. Absolutely. The cultural sector is 
nothing if not reasonable.
    Mr. Smith. Okay. So you think by the end of the month is a 
reasonable amount of time?
    Ms. Pallante. Absolutely.
    Mr. Smith. Okay. Mr. Trust, I obviously tried to box you in 
here.
    Mr. Trust. I hadn't noticed.
    Mr. Smith. What do you think?
    Mr. Trust. I would echo the comments of Mr. Adler. There 
are other stakeholders here that we don't represent.
    Mr. Smith. We know that. There's lots of them, but still--
--
    Mr. Trust. But we certainly feel like we can work with 
everyone to help pull them together.
    Mr. Smith. By the end of the month?
    Mr. Trust. And make substantial progress, yeah, and do it 
by the end of the month.
    Mr. Smith. Great. Thank you all. We look forward to your 
work product.
    We stand adjourned.
    [Whereupon, at 3:08 p.m., the Subcommittee was adjourned.]

                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Howard L. Berman, a Representative 
     in Congress from the State of California, and Ranking Member, 
    Subcommittee on Courts, the Internet, and Intellectual Property
    Mr. Chairman,

    Thank you for scheduling this oversight hearing on the Copyright 
Office's report on orphan works. Unfortunately, I have to leave the 
hearing a little early, so my opening statement will be a little 
unconventional--in that it will consist of the questions I would like 
to ask, but may not get a chance to. Before I begin though, I must 
commend the Copyright Office on their legislative proposal, which seems 
to have united many owner and user groups in search of a solution to 
the orphan works problem.
    Clearly, the recommendation goes a long way to meeting users 
concerns of making beneficial uses of works when copyright owners 
cannot be found. This allows our society to be enriched by access to 
works that otherwise, and most likely, would be lost. However, this 
must all co-exist against the backdrop of maintaining the incentive for 
creators to pursue their art. When it comes specifically to the 
category of owners of visual art works such as photographers and 
illustrators, I have some concerns about the effect of the orphan works 
provision.
    Currently, a user can begin a search by typing in search terms in a 
registry, be it the copyright office, or for musical works by 
contacting BMI or ASCAP--however, there is no collective registry for 
photographic or illustration information making owner information, in 
many instances, almost impossible to find. Therefore, according to this 
proposal, if a reasonable search and attribution allows one to qualify 
for a limitation on remedies, will most owners of photographs be 
required to forgo their normal remedies when the information cannot be 
found?
    This issue is the elephant in the room. Is the current copyright 
system layered by the orphan works provision adequate to protect visual 
arts owners? After all, the most basic question seems unanswerable: 
Where does one even begin the process of finding the owner information 
for most illustrations/photographs?
    No doubt this question may be addressed in part by some non-
legislative solutions--or possibly legislative in that an appropriation 
is required. For example, when I wrote to the Copyright Office about 
the orphan works issue I requested that they ``explore the viability of 
creating an accurate, updated and electronically searchable database of 
copyright ownership.'' How much would such a database cost?
    Currently on the Copyright Office search site, unless one has a 
registration number, the title, or the author name, one cannot search 
for the work. Even with all that information, the search feature is 
extremely rudimentary. With photographs however, where often times 
there is no title to the work, there is currently no mechanism to 
search a description of the work and the possibility of matching the 
work is limited, since there is no thumbnail of the photograph. 
Granted, part of the problem has been exacerbated by attempts to 
accommodate the needs of the photographers by allowing group 
registration. However, if the orphan works provision limits an owner's 
right to reasonable compensation, without access to statutory damages 
or attorneys fees, what is the motivation for photographers to register 
their works in the first place?
    While some have stated that this issue should be resolved outside 
the scope of this orphan works solution, I think we must be wary of 
going down a road that small copyright owners claim will isolate them 
from the benefits of the copyright system and potentially harm them. 
Currently, copyright owners can use the threat of litigation with the 
possibility of statutory damages and attorneys fees to hinder 
unauthorized uses of their works. Under this orphan works provision, 
while the use is still considered infringement, the remedies are so 
limited that likelihood of recovery, of even reasonable compensation, 
becomes questionable. The cost of litigation to determine reasonable 
compensation would often-times far exceed the actual reasonable 
compensation.
    To discuss the orphan works recommendation without addressing a 
core problem for major stakeholders in the process alters the balance 
in maintaining the exclusive rights for locatable copyright owners--
where but for the fact that there is no adequate database--some of 
these children could be matched with their parents.
    Some of the issues I would hope the witnesses could address are the 
following:
    For cases in which the Copyright Office has a registration for a 
work with locatable information on its face, should there be an 
exception/carve-out to the orphan works provision? Should an owner, if 
able to show a registration, be able to reclaim his right to statutory 
damages or attorneys fees?
    What if a work was not only registered, but the owner took the 
steps to make his work locatable by providing a description of the 
work--would this make a difference?
    If the Copyright Office is proposing that this database be a 
voluntary database established by the photographers, should we look at 
a later effective date to allow time for the photographers to acclimate 
to this new scheme or perhaps provide a transition period?
    Finally, would the witnesses be amendable to having the option of 
resolution of the orphan works issue in a small claims court to reduce 
the costs to small copyright owners?
    Of course, there are additional issues to consider such as the 
definition of derivative work, sovereign immunity, the right of an 
``interested party'' to reacquire or exploit the work, all I'm sure 
which be addressed during the on-going negotiations. This is a great 
first step and I look forward to working with the Chairman and the 
parties in moving ahead with orphan works legislation.

                               __________

 Prepared Statement of the Honorable Zoe Lofgren, a Representative in 
                 Congress from the State of California

    I want to thank the Copyright Office for initiating its proceeding 
seeking comment on orphan works, and for issuing this report. I am glad 
to see that the Copyright Office recognizes a problem with orphan 
works, and glad to see such a comprehensive analysis based on the 
comments in its proceedings. There is nearly universal recognition that 
reforms in our copyright system are needed so that orphan works can 
reenter circulation to the public.
    As you know, I have for quite some time believed that the problem 
of orphan works is a great one. In too many instances, libraries, 
museums, publishers, authors, filmmakers and others seek to reuse 
existing works, sometimes in derivative works, sometimes merely for 
such simple things as screening or displaying those works. But they are 
unable to find the original copyright holders, and out of fear of an 
infringement action that might arise down the road, these existing 
works and derivative works remain unused and inaccessible.
    Just to give one particularly perverse example, I have heard of 
instances where library collections have sought to actually preserve 
original nitrate film masters, but cannot resolve the copyright 
ownership. As a result, they are unable to display the films in order 
to help secure funding for their preservation. It is an ironic result 
of copyright law indeed if it functions to lose historic works forever 
for posterity, rather than preserving them for the public.
    I agree with the principles adopted in the Copyright Office's 
report. Those seeking to use orphan works should use due diligence to 
find the copyright holder, and if they can't locate the owner, they 
should be enabled to use the work without fear of infringement 
liability somewhere down the road.
    I am interested in hearing more from the Copyright Office about the 
specific solution it proposed. My view of the Copyright Office proposal 
is that it essentially would create a new legal defense for the use of 
orphan works, a legal defense to the full range of monetary and 
injunctive relief available in an infringement lawsuit.
    As you know, I introduced a bill, H.R. 2408, that took a somewhat 
different approach than the one proposed by the Copyright Office. In my 
bill, I set forward the concept of a national registry system. To avoid 
their works becoming orphaned, under my bill copyright holders would 
register their works in a national registry after 50 years.
    I recently received a letter from Professor Lawrence Lessig of 
Stanford Law School in support of a registry system. His letter 
suggests some modifications to the registry system I proposed in my 
bill. Mr. Chairman, with your permission I'd like to add Professor 
Lessig's letter to the record for this hearing, and I'd like to ask the 
witnesses for their reactions to Professor Lessig's proposal.
    One of the values I had hoped for in a registration approach is 
that it would create certainty for both copyright holders and those 
wishing to use orphan works. On the other hand, one of the values I see 
in the Copyright Office's proposal is that it would allow the use of 
orphan works immediately, rather than only after waiting 50 years. I am 
eager to understand how we can create more legal certainty under the 
Copyright Office's proposal, for both copyright holders and users of 
orphan works. I want users of orphan works to be able to know as much 
as possible about what their rights and obligations are before making 
use of those orphan works. I am also interested in hearing from the 
other witnesses their thoughts on creating a registry system as opposed 
to a new defense to infringement, and how we can create legal certainty 
for copyright holders and users under either approach.
    Thank you Mr. Chairman.

                               __________

Prepared Statement of the Honorable Maxine Waters, a Representative in 
                 Congress from the State of California

    Chairman Smith and Ranking Member Berman, I thank you for holding 
today's hearing on orphan works. From the initial request for a report 
made by the Chairman, the Ranking Member, and Senators Hatch and Leahy 
to the actual issuance of the ``Report on Orphan Works,'' due diligence 
has been undertaken in order to elicit a healthy analysis of the status 
of specific orphan works.
    It is very important to the advancement of technology that orphan 
works either be utilized with proper permission or expounded upon after 
its entrance into the public domain. However, I do sympathize with 
those who advise lawmakers to keep some of the current regulations 
intact that ensure that copyright owners receive remuneration for 
unauthorized duplication or use of this property.
    The draft statutory language crafted by the Copyright Office offers 
plenty of latitude for orphan works to be utilized. While the proposed 
10-year sunset provision in section 514(d) has been widely criticized, 
it is prudent for this body to set a deadline by which it must assess 
the effectiveness of the new language. The sunset does not pose a 
threat to any parties; if, at the end of the sunset, it is determined 
that a sufficient number of parties benefit from the section, Congress 
will leave it intact, undoubtedly.
    Today's hearing is important, not only insofar as this body reviews 
the Copyright Office's report. In addition, through the testimony of 
our distinguished witnesses and the record created by our queries to 
them, we will analyze the feasibility and need for other fixes required 
in the area of orphan works, such as the issue of digital rights to 
published works. The court dockets are replete with cases such as the 
ones against internet content giant Google where publishers argue that 
works are impermissibly featured on the site, while Google rebuts this 
contention by citing the orphan works dilemma. Our suggestion for 
improvements to the law must include proper treatment of this issue.
    I thank the panel of witnesses and the Subcommittee leadership for 
today's hearing, and I yield back.

 Amended ``Appendix'' to the Prepared Statement of Maria A. Pallante, 
  Associate General Counsel and Director of Licensing, The Solomon R. 
                         Guggenheim Foundation




                Letter and accompanying paper from the 
               Advertising Photographers of America (APA)




       Prepared Statement of the American Society of Composers, 
                     Authors and Publishers (ASCAP)




           Letter and proposed legislative revision from the 
                     Artists Rights Alliance (ARS)



           Prepared Statement of Broadcast Music, Inc. (BMI)

    Chairman Smith, Ranking Member Berman, and Members of the 
Subcommittee, Broadcast Music, Inc. (``BMI'') is pleased to submit its 
written comments for the hearing record on the Copyright Office's 
legislative proposal for how to deal with the problem of so-called 
``orphan works''. BMI commends the Subcommittee for holding a hearing 
on the complex and important goal of creating a new copyright law 
system designed to facilitate the use of copyrighted content whose 
owners/creators cannot be located. BMI thanks Marybeth Peters and the 
Copyright Office for their extensive work on this subject made at your 
behest. BMI urges the Congress to proceed deliberately and with caution 
in this area, however, because any orphan works regime that Congress 
may adopt entails the risk of unfairly compromising the rights and 
economic interests of this country's creators.

                               STATEMENT

    BMI is a music performing right licensing organization whose 
business centers on licensing of public performances of over 6.5 
million musical works by a wide spectrum of users, including digital 
and analog broadcasting entities such as radio, broadcast television, 
cable, satellite and the Internet, as well as restaurants, stores, 
concerts, background music services, aerobics and dance studios, and 
many more. BMI's fundamental and lawful role is to license to these 
users the ``public performing'' right in musical works on behalf of its 
over 300,000 affiliated songwriters, composers and music publishers. 
The majority of these songwriters are neither performers nor major 
recording artists and therefore do not receive income from making sound 
recordings of their own music, or from concert tours, television 
appearances, commercial endorsements, sales of souvenirs or any other 
activities enjoyed by recording artists. As a result, the majority of 
BMI's affiliated songwriters and publishers are the consummate ``small 
businessmen and women'' who depend on their BMI royalties for a major 
portion of their income.
    BMI also has entered into reciprocal license agreements with more 
than 70 foreign performing right societies worldwide that permit BMI to 
license in the U.S. the public performing right in many thousands of 
musical works by foreign songwriters and composers. Through these 
reciprocal agreements, BMI also collects royalties from those societies 
for performances of BMI musical works occurring overseas. BMI operates 
as a non-profit making business and does not retain earnings. Instead 
BMI returns all license fees collected, less operating expenses, as 
royalties to its affiliated songwriters, composers, and music 
publishers whose works are publicly performed.
    Last year BMI submitted comments to the Copyright Office in its 
orphan works proceeding. In those comments, BMI contended that at least 
with respect to the public performing right in musical works, the 
orphan works scenario should not be a problem because the performing 
rights organizations, BMI, the American Society of Composers, Authors 
and Publishers (``ASCAP'') and SESAC, together represent the rights to 
in excess of 99% of copyrighted music. The significance of this is that 
a user seeking to license the public performing right in music can 
obtain licenses from the performing rights organization whose 
repertoire includes that work.
    BMI and ASCAP also maintain extensive proprietary databases of 
copyright information as well as contact information for their 
respective affiliates and members. BMI pioneered an online database 
greatly facilitating the public's ability to identify the copyright 
owners of BMI musical works. The Harry Fox Agency also submitted 
comments to the Office that it is able to identify publishers for 
purposes of mechanical rights licensing. In the circumstances, it is 
not likely that a user will encounter a work for which licensing and/or 
contact information is not available.
    Although the Copyright Office's report takes notice of the 
existence and the efficacy of collective licensing organizations,\1\ 
the Office's legislative proposal does not itself reflect the role that 
collective licensing organizations can play in reducing the incidents 
of orphan works problems. Jule Sigall did candidly acknowledge in his 
written testimony on behalf of the Office that the adoption of the 
proposed legislation by Congress might galvanize the non-music 
copyright industries to create collective licensing organizations 
similar to the music performing rights organizations. Mr. Sigall stated 
that: ``In fact, enactment of orphan works legislation may be the 
catalyst necessary to prompt the non-legal marketplace reforms that 
will most efficiently address the problems identified by photographers 
and creators of visual images.'' \2\ The logic of this statement is 
apparent.
---------------------------------------------------------------------------
    \1\ See Office Report at pp. 30-31.
    \2\ Sigall Testimony at page 2.
---------------------------------------------------------------------------
    While most commentators would agree that adherence to the Berne 
Convention would preclude any orphan works legislation that called for 
mandatory registration of works, it appears that the Office's proposal 
creates a scenario in which, for all practical purposes, a copyright 
owner must keep his or her address on file somewhere that is publicly 
available in order to preserve the economic value of his or her 
copyright rights. Even if the creator is capable of meeting this 
burden, the creator must ensure that the corporate entity owning or 
controlling the copyright (e.g., a work-for-hire owner) is similarly 
locatable. In addition to public access to contact information, there 
must be adequate assurance that someone coming across a copy of the 
work can reasonably link it to that particular creator or copyright 
owner. In this regard, concern has been expressed that the Office's 
proposal for attribution to copyright owners by orphan works users 
(which should be helpful to authors) may actually lead to improper or 
incorrect information being put on works by orphan works' users, which 
in turn could lead to reliance by subsequent orphan works users on 
incorrect data when they do their searches. All of this tends to argue 
for the creation of collective licensing organizations in non-music 
fields.
    BMI is confident that the Committee will be able to address the 
many difficult issues presented by orphan works situations. BMI 
believes that any legislation adopted by Congress should, at a minimum, 
be accompanied by legislative history that addresses the case of a 
copyrighted work for which a license is available through a readily 
locatable collective licensing organization, such as the music 
performing rights organizations. The legislative history should clarify 
that: (1) a reasonably diligent good faith search to locate the owner 
should include research of databases of collective licensing 
organizations which may have the rights to license to the user; and (2) 
if a license is available from the collective (which itself is an 
``owner'' of non-exclusive rights in the work) and is not taken, the 
work would not be considered ``orphaned'' (stated otherwise, the search 
would not be considered reasonable within the meaning of the Act). Such 
a provision would serve as a further incentive to the marketplace 
``reform'' being advocated by the Copyright Office.
    BMI also believes that orphan works treatment should not be allowed 
for any uses subject to statutory compulsory licenses (e.g. sections 
111, 115, 118 and 119) where Congress has created the means of access 
to a license and the Copyright Royalty Board has established the fees, 
and there are established methods and practices for dealing with 
unidentified works.
    David Trust of the Professional Photographers of America 
association testified that in the case of uses that have relatively 
small value, it will not be cost efficient for the owner of an orphan 
work to negotiate a reasonable fee when the incentives created by 
statutory damages and attorneys fees are removed from the negotiating 
equation. Jule Sigall testified that a ``small claims'' court for 
copyright owners could be the solution to this problem but the cost of 
going to even a small claims court is going to be relatively high in 
some cases. Attorneys fees should therefore be available to copyright 
owners who have to pursue legal remedies such as reasonable license 
fees for orphan works uses, at least in cases of flagrant and willful 
disregard of the owners' economic interest.

                               CONCLUSION

    Mr. Chairman, BMI applauds your efforts and initiative--and those 
of the Copyright Office--in this challenging area of law. Collective 
licensing organizations such as BMI can serve as a cost-effective 
marketplace solution to orphan works licensing and BMI believes that at 
a minimum the legislative history to any orphan works bill should 
reflect this valuable role by specifying that reasonable searches 
include licensing through such organizations where available.

                               __________

     Prepared Statement of Reed Stager, Executive Vice President, 
                          Digimarc Corporation

                           EXECUTIVE SUMMARY

    In 2005, the U.S. Copyright Office embarked on a study of the 
issues raised by ``orphan works''--copyrighted works whose owners may 
be impossible to identify and locate. Concerns had been raised that the 
uncertainty surrounding ownership of such works might needlessly 
discourage subsequent creators and users from incorporating such works 
in new creative efforts, or from making such works available to the 
public.
    Digimarc is pleased to have the opportunity to submit written 
testimony to the Judiciary Committee Oversight Hearing on ``The Report 
on Orphan Works by the Copyright Office'' and the role digital 
watermarking technology can play in providing content identification 
and copyright communication to address the issue of orphan works.
    Balancing the needs of consumers with the rights of content owners 
is of paramount importance. Consumers deserve to have access to the 
content options available to them. Content owners and artists deserve 
to be recognized and compensated for their work. But the rapid 
proliferation of technology has made this balancing act increasingly 
difficult. The U.S. Supreme Court recently tackled this issue in Metro-
Goldwyn-Mayer Studios v. Grokster, in which the court ruled that file-
sharing networks (also known as peer-to-peer or P2P networks) can be 
held liable when their users illegally exchange copyrighted material.
    In its ruling, the Court identified digital watermarking as a 
technology that can be used by rights holders and file-sharing networks 
to communicate copyrights and deter piracy and illegal use of 
copyrighted entertainment content.
    Digital watermarking technology is currently available from many 
suppliers such as Digimarc, Philips Electronics, Dolby Laboratories, 
Thomson, Verance, Activated Content, Verimatrix, Jura, Teletrax, GCS 
Research, Signum Technologies, Nielsen Media Research and others.
    Digital watermarking can enable content identification and 
copyright communication on a broad scale and can provide a range of 
solutions for identifying, securing, managing and tracking digital 
images, audio, video, and printed materials. In fact, digital 
watermarking technology has already been adopted by many photographers, 
movie studios, record labels, television broadcasters, and corporate 
enterprises as a way to identify, protect and manage the rights to 
their content while still offering their consumers the convenience and 
portability they have become accustomed to.
    Digital watermarks can identify copyrighted content and associated 
rights, during and after distribution, to determine copyright ownership 
enable rights management policy while enabling innovative new content 
distribution and usage models. Digital watermarks are broadly deployed 
with billions of watermarked objects and hundreds of millions of 
watermark detectors in the market, supporting various applications.
    We believe that policy makers can facilitate the adoption of 
technologies such as digital watermarking to enable content owners and 
users to improve their level of collaboration to help address the 
challenge of orphan works. In particular, we urge the Committee to 
consider:

        1.  Amending Chapter 5 of the Copyright Act , expressly 
        authorizing courts to consider whether a copied digital work 
        included a publicly-readable digital watermark--by which the 
        copyright owner could have been identified and contacted--in 
        determining whether infringement of the work was ``willful;''

        2.  If provisions akin to those proposed by the Glushko/
        Samuelson Copyright Clearance Initiative are adopted, then 
        listing a search for a publicly-readable digital watermark--by 
        which the copyright owner could have been identified and 
        contacted--as one of the factors appropriate for consideration 
        in determining whether a user's inquiry was a ``reasonable 
        efforts search;'' and

        3.  Recommending that the Copyright Office host a web page with 
        information about digital watermark reader software that can be 
        freely downloaded by the public, to check audio, video and 
        image content for watermarked data by which the copyright owner 
        of such content may be identified and contacted.

                                PROBLEM

    Today, a large number of ``orphan works''--presumably copyrighted 
works whose owners cannot be identified or located--exists. Typically, 
such works are excerpts or newly digitized versions of books, movies, 
photos, and music whose ownership information has been stripped away or 
lost during distribution, re-formatting or editing.
    Unfortunately for those individuals and organizations seeking 
permission to use such works, much of this rich material ends up left 
untouched due to the fact that ownership cannot be determined.
    In its study of the problem, the U.S. Copyright Office solicited 
responses from the public. From libraries and business to legal 
institutions and individuals, the problem of orphan works is clear. A 
few examples from the responses:

          198 works from 397 were deemed to have unresolved 
        copyright issues during the digitization of The Core Historical 
        Literature of Agriculture by the A.R. Mann Library at Cornell 
        University.

          More than 100,000 photographs made by participants on 
        oceanographic voyages had no identifying photographer or 
        copyright information, causing The Scripps Archives at the 
        University of California, San Diego to only publish 4,000 of 
        these images online.

          Countless other libraries, universities, artists, 
        teachers and students have been unable to use works because of 
        the inability to identify or locate copyright owners.

  SOLUTION: IDENTIFYING COPYRIGHTED MATERIAL WITH DIGITAL WATERMARKING

    When music, movies, images, programming or books are digitized, 
their identity (the detailed information about the content, its 
copyright ownership or the purchaser's rights) is often lost, having 
been reduced to ones and zeros that only computers can read. This makes 
the content difficult to manage, protect and track, leaving the door 
wide open for both casual--and malicious--digital piracy and copyright 
infringement.
    As a result, content often circulates anonymously, without 
identification of the owner, or without an easy means to contact the 
owner/distributor to obtain rights for use.
    The U.S. Supreme Court recently tackled this issue in Metro-
Goldwyn-Mayer Studios v. Grokster, in which the court ruled that file 
sharing networks (also known as peer-to-peer or P2P networks) can be 
held liable when their users illegally exchange copyrighted material.
    In its ruling, the Court identified digital watermarking as a 
technology that can be used by rights holders and file-sharing networks 
to communicate copyrights and deter piracy and illegal use of 
copyrighted entertainment content.
    Digital watermarking is the science of hiding extra information, 
such as identification or control signals, in media content. For 
example, the digital ``pixels'' making up a movie or a photograph can 
be slightly altered in value to represent extra information, while not 
visibly impairing the appearance of the movie to human viewers.
    The extra information represented by digital watermarks travels 
with the content--persisting through changes in file format, and 
through transformation between digital and analog form.
    Digital watermarks enable copyright holders to communicate their 
ownership, usually with a public detector, enabling infringement 
detection and promoting licensing. A digital watermark embedded within 
a piece of content can carry a persistent copyright owner identifier 
that can be linked to information about the content owner and copyright 
information in an associated database or to appropriate usage rules and 
billing information. Digital watermarks are broadly deployed with 
billions of watermarked objects and hundreds of millions of detectors 
in the market, supporting various applications.
    For example, photographs can be embedded with the photographer 
owner's ID to determine copyright information and usage rights. The 
same can occur with video (e.g., TV news and commercials), DVDs, and 
music.

                   CASE STUDY EXAMPLE: DIGITAL IMAGES

    Millions of copies of Digimarc's digital watermark reader software 
are currently in distribution, and thousands of creative professionals, 
organizations and businesses use digital watermarking to embed 
copyright notification information into their content, such as images. 
Leading image-editing applications, from companies like Adobe, Cerious 
Software, Corel, Jasc software include Digimarc watermarking technology 
as a standard feature.
    These Digimarc-aware applications are capable not only of embedding 
digital watermarks, but also of reading and detecting digital 
watermarks already embedded in digital images. When an image is opened 
within one of these applications, the Digimarc auto-detection software 
quickly scans the image for the presence of a digital watermark. If a 
digital watermark is present, the application displays a copyright 
symbol (c) in the title bar of the image window, providing an instant, 
visual cue that copyright and ownership information are available by 
reading the Digimarc digital watermark. The passive detection and 
proactive notification are key features of Digimarc's copyright 
communication system.
    The digital watermark can provide a link to a publicy-accessible 
database, where complete contact details for the copyright holder or 
image distributor are stored. This makes it easy for the viewer to 
license the image, license another one like it, or commission new work.
    In addition to the embedder and reader plug-ins within many image 
editing applications, Digimarc also offers its own stand-alone reader 
product for detecting digital watermarks within images on your desktop 
or on the web. This free reader download enables users to detect 
digitally watermarked images directly from Internet Explorer or Windows 
Explorer. If a digital watermark is present, the image displays a ``D'' 
symbol in the lower right corner of the image.
    By simply clicking an ``Image Info'' button, the user viewing an 
image can link directly to the publicly accessible database, to obtain 
complete contact details for the image owner or distributor.
    Once an image contains a digital watermark, it can be searched and 
monitored as the image is distributed over the public Internet to 
determine its location and compliance with usage rights.
    The Digimarc MarcSpider image tracking service scans the web and 
reports to image owners and distributors where their digitally 
watermarked images are found. This service enables photographers, web 
content developers, stock photography libraries, corporations and other 
users and creators of digital images to discover both authorized and 
unauthorized uses of their works migrating across the web.
    The core of Digimarc MarcSpider technology is a search engine that 
crawls through publicly accessible areas of the Internet looking for 
digitally watermarked images. It scans hundreds of millions of pieces 
of information, locating Digimarc-watermarked images and reporting back 
to their owners where and when they were found.
    Through the information found in the digital watermark, anyone with 
a Digimarc ``reader'' (available in the stand-alone free software 
reader as well as in the plug-ins) can obtain complete contact details 
about an image's creator and/or its distributor, making it simple to 
license the image, license another one like it, or commission new work.
    Current digital watermarks are robust against attack. Attempts to 
impair a digital watermark require impairing the host content, e.g., 
making a movie blurry, or a song noisy. Moreover, such tampering with a 
copyright protection measure can trigger liability under the Digital 
Millennium Copyright Act.\1\
---------------------------------------------------------------------------
    \1\ E.g., Section 1202(b) provides ``No person shall, without the 
authority of the copyright owner or the law, (1) intentionally remove 
or alter any copyright management information, . . . (3) distribute, 
import for distribution, or publicly perform works, copies of works, or 
phonorecords, knowing that copyright management information has been 
removed or altered . . .''
---------------------------------------------------------------------------
                   IN SUMMARY: POLICY RECOMMENDATIONS

    Digital watermarks are available and widely deployed today, and can 
help speed and facilitate deployment of online digital content by 
enabling identification of copyrighted content, facilitating rights 
management policy, and enhancing consumer experiences.
    Content owners can digitally watermark image, audio and video now 
for forensic tracking, copyright notification and monitoring. We 
believe that policy makers can facilitate the adoption of technologies 
that can enable content owners and users to improve their level of 
collaboration to help address the challenge of orphan works. In 
particular, we urge the Committee to consider:

        1.  Amending Chapter 5 of the Copyright Act , expressly 
        authorizing courts to to consider whether a copied digital work 
        included a publicly-readable digital watermark--by which the 
        copyright owner could have been identified and contacted--in 
        determining whether infringement of the work was ``willful;''

        2.  If provisions akin to those proposed by the Glushko/
        Samuelson Copyright Clearance Initiative are adopted, then 
        listing a search for a publicly-readable digital watermark--by 
        which the copyright owner could have been identified and 
        contacted--as one of the factors appropriate for consideration 
        in determining whether a user's inquiry was a ``reasonable 
        efforts search;'' and

        3.  Recommending that the Copyright Office host a web page with 
        information about digital watermark reader software that can be 
        freely downloaded by the public, to check audio, video and 
        image content for watermarked data by which the copyright owner 
        of such content may be identified and contacted.

    In addition to addressing these ideas through direct legislation, 
the avenue of legislative report language could also be considered. 
Courts, for instance, could be invited to consider an award of enhanced 
damages if an infringement plaintiff proves that it marked the copied 
content with a digital watermark by which the copyright owner of such 
content could have been identified and contacted. Similarly, courts 
could be invited to consider a defendant's unsuccessful attempt to 
identify or contact a copyright owner by reference to such a digital 
watermark in assessing a reduced damages award. Private sector 
organizations, such as the various library associations, could be urged 
to develop best practice models leveraging advances in technology of 
the kind discussed above.
    In conclusion, we appreciate the opportunity to share our thoughts 
on ways in which technology can be used to help address the growing 
challenge of orphan works. We stand ready to assist in whatever manner 
may be helpful as the Copyright Office and the Judiciary Committee 
address the orphan works issue.

       Prepared Statement of the Directors Guild of America (DGA)




                 Letter from the Graphic Artists Guild



               Letter from the Illustrators' Partnership



 Prepared Statement of Association of Independent Video and Filmmakers 
   (AIVF), Doculink, Film Arts Foundation, FIND (Film Independent), 
 International Documentary Association (IDA), IFP (Independent Feature 
    Project), National Alliance for Media Arts and Culture (NAMAC), 
          National Video Resources (NVR), and Public Knowledge




Letter to the Honorable Zoe Lofgren, a Representative in Congress from 
   the State of California, and Member, Subcommittee on Courts, the 
        Internet, and Intellectual Property from Lawrence Lessig




  Prepared Statement of Jerry Brito, Legal Fellow, Mercatus Center at 
George Mason University, and Bridget Dooling, Editor-in-Chief, Federal 
                          Circuit Bar Journal

    Mr. Chairman and Members of the Committee:
    We appreciate the opportunity to enter written testimony into the 
record of the Committee's hearing on orphan works. Jerry Brito is a 
research fellow with the Regulatory Studies Program of the Mercatus 
Center, a 501(c)(3) research, educational, and outreach organization 
affiliated with George Mason University. Bridget Dooling is a law 
student and the editor-in-chief of the Federal Circuit Bar Journal, a 
legal journal at George Mason University.\1\
---------------------------------------------------------------------------
    \1\ This testimony reflects only the views of its authors and does 
not represent an official position of George Mason University or their 
other affiliations.
---------------------------------------------------------------------------
    We recently completed an analysis of the orphan works problem and 
evaluated several of the leading proposed solutions. Our study, which 
is published in the current issue of the Michigan Telecommunications 
and Technology Law Review, is attached as an appendix to this 
testimony.\2\
---------------------------------------------------------------------------
    \2\ The study can also be found at 12 Mich. Telecomm. Tech. L. Rev. 
75 (2005).
---------------------------------------------------------------------------
    While our proposed legislative solution differs from the one 
proposed by the Copyright Office, we concur with the analysis in its 
Report on Orphan Works. We would like to highlight a few conclusions of 
our own analysis that we think might be helpful to your deliberations.

          The orphan works problem was created in large part by 
        the elimination of formalities that resulted from the United 
        States' ascension to the Berne Convention. While the 
        reintroduction of formalities into U.S. Copyright law might 
        help fix the orphan works problem, it is not a practical 
        solution unless we are prepared to abrogate Berne and other 
        international intellectual property treaties.

          The Supreme Court has made clear in at least 74 years 
        of jurisprudence that the grant of temporary monopoly rights to 
        creators is a secondary concern of the Constitution's Copyright 
        Clause. The primary aim is the furtherance of creative 
        innovation that benefits the public at large.\3\ With that in 
        mind, it is not unthinkable for a reasonable solution to the 
        orphan works problem to impinge somewhat on the existing rights 
        of authors if doing so serves the public interest.
---------------------------------------------------------------------------
    \3\ Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932) (``[T]he 
primary object in conferring the [copyright] monopoly lie[s] in the 
general benefits derived by the public from the labors of authors.''); 
United States v. Paramount Pictures, Inc., 334 U.S. 131, 158 (1948) 
(``The copyright law . . . makes reward to the owner a secondary 
consideration.''); Twentieth Century Music Corp. v. Aiken, 422 U.S. 
151, 156 (1975) (``The immediate aim of our copyright law is to secure 
a fair return for an `author's' creative labor. But the ultimate aim 
is, by this incentive, to stimulate artistic creativity for the general 
public good.''); Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 
340, 349-50 (1991) (``The primary objective of copyright is not to 
reward the labor of authors but `to promote the Progress of Science and 
the useful Arts.' ''); Fogerty v. Fantasy Inc., 510 U.S. 517, 524 
(1994) (``The primary objective of the Copyright Act is to encourage 
the production of original literary, artistic, and musical expression 
for the good of the public.'').

          An efficient solution to the orphan works problem 
        will create an incentive for authors to take every reasonable 
        step to identify themselves so that would-be users of their 
---------------------------------------------------------------------------
        works can find them and seek their permission.

          An efficient solution to the orphan works problem 
        will create an incentive for would-be users of a work to take 
        every reasonable step, in good faith, to identify the work's 
        copyright owner in order to acquire permission to use the work. 
        Perfunctory attempts to seek permission, or sham attempts made 
        in bad faith, should not qualify a user for protection.

          To protect both copyright owners and would-be users, 
        courts should apply any orphan works protection on a case-by-
        case basis. Only through case-by-case analysis can would-be 
        users' claims that they could not locate an owner be fairly 
        judged. A categorical approach-defining a class of works as 
        orphan works and automatically limiting liability for using 
        works in that class-impinges on authors' rights more than is 
        necessary to address the orphan works problem.

          If a user of an orphan work is found by a court to 
        have conducted a reasonable search in good faith, she should 
        not be subject to any monetary liability. This will help create 
        the needed incentive for authors to take steps to make 
        themselves locatable. Additionally, it would eliminate the need 
        for courts to have to speculate on what would be reasonable 
        compensation for use of a work. Of course, users should have to 
        acquire permission before they can make future uses of the 
        work.

          If a user of an orphan work is found by a court to 
        have conducted a reasonable search in good faith, she should 
        not be subject to injunction where the orphan work is part of a 
        derivative work that includes her own expression. This will 
        help create the incentive for authors to take steps to make 
        themselves locatable. Additionally, it will foster the creation 
        of new works that would otherwise go unrealized if the 
        possibility of injunction existed.

          Orphan works are not a transitory problem. 
        Additionally, Congress may modify the Copyright Act any time it 
        becomes necessary. Therefore, there is no reason why an orphan 
        works amendment to the Copyright Act should include a sunset 
        provision.

    The orphan works problem undermines the purpose of copyright law, 
which is ``[t]o promote the Progress of Science'' \4\ to ensure ``broad 
public availability of literature, music, and the other arts.'' \5\ It 
stifles this goal by putting a large swath of the public domain in 
doubt and by making it practically impossible to locate many 
rightsholders to license their works. Some have suggested solutions 
that require an overhaul of U.S. copyright law, but these solutions are 
impractical and unnecessary. Recognizing this, Congress should enact a 
safe harbor from copyright infringement liability for those who conduct 
a reasonable search in good faith for a work's copyright holder before 
using the work. Doing so would remove the unfortunate choice between 
using an orphan work and bearing the risk of infringement litigation, 
or abstaining from the very derivative use that the copyright laws are 
intended to encourage.
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    \4\ U.S. CONST. art. I, Sec. 8.
    \5\ Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 
(1975).
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    We hope our findings are useful to the Committee as it weighs 
various options for orphan works reform.

                               __________

 Prepared Statement of Gerard Colby, President, National Writers Union

    The National Writers Union--UAW Local 1981 welcomes the U.S. 
Copyright Office study of orphan works. Freelance writers' ownership 
rights have long been ignored and abused. The lawsuit New York Times v 
Tasini and the related class action lawsuits, as well as similar 
lawsuits won by freelencers in recent years, indicate that this 
situation has led to freelancers losing considerable income. A major 
contributor to this abuse and loss of income is the difficulty of 
keeping track of rights owners when the owners are individuals and 
small businesses.
    The National Writers Union maintains that a registry and licensing 
agency (or agencies) are essential to ease of use of copyrighted works 
in compliance with the law. As Justice Ruth Bader Ginsberg explained in 
the majority decision in New York Times v Tasini, there is a simple way 
for prospective users to gain access to copyrighted material: pay for 
it. Private licensing agencies already exist and are ready means to 
access copyrighted material, including when the individual rights owner 
may not be available for one reason or another.
    Remedies such as the Canadian Copyright Board are partial and 
insufficient. At best, they allow others to use a work. They do not 
insure that rights owners get the income that such use earns. While 
allowing others to use a work is a critical goal of copyright law, the 
law must also relieve the harm done to infringed rights owners and 
protect them against further harm. As the summary to the present study 
makes clear, current means of relieving the harm have largely failed. 
There seems no means of relieving that harm other than a registry and 
licensing agency.
    It would be inappropriate of a government agency, including the 
Copyright Office to establish either of these functions either as a 
monopoly or in competition with private enterprise.
    While we sincerely applaud Congress and the Copyright Office for 
undertaking this study, we also note that the study would be 
unnecessary if the publishing industry had the same protections as the 
music and entertainment industries. In these industries, use and 
protection alike are facilitated by registries, licensing agencies, 
unions, and associations. Little such facilitation exists in the 
publishing industry, leading to problems such as the one presently 
under study. The above industries provide a ready model for the 
publishing industry, one that, if it were adopted, would remove the 
obstacles to lawful use that lay the foundation for such lawsuits as 
New York Times v Tasini.

                          SPECIFIC QUESTIONS:

1. Nature of the Problems Faced by Subsequent Creators and Users
    Identification and communication with the current owner of the 
desired right is the key difficulty. The owner is often not the 
registered copyright holder, and there are often multiple owners of 
multiple rights to a single work. For instance, newspapers and 
magazines that obtain first serial rights to freelance writers' 
contributions will register the issue but not the individual works 
under the copyright holder. A potential user only knows of the 
publication, and the publication will not know the name or location of 
the owner or owners of the works' remaining rights. Even if a 
freelancer registers the work separately, it is highly unlikely that s/
he will go to the expense of re-registering the work every time s/he 
changes address or makes modifications to an original work. However, s/
he would maintain a current address with a registry/licensing agency 
that was paying her royalties for uses of the work.

2. Nature of ``Orphan Works'': Identification and Designation
    Any passive system that allows use without actively contacting the 
rights owner and soliciting her agreement is not only inadequate for 
protecting the rights of the owner of the work; it is standing 
copyright law on its head, asserting a form of eminent domain for 
private use that has already alarmed much of the nation when applied to 
real estate. Such permitted use will violate the purpose and meaning of 
the copyright clause of the Constitution ``To promote the Progress of 
Science and useful Arts, by securing for limited Times to Authors and 
Inventors the exclusive Right to their respective Writings and 
Discoveries.'' Article 1, Section 8.
    This guarantee of exclusive ownership for a limited time was 
designed to encourage the growth of culture and commerce of the new 
nation, and it has, until recent times, worked well for the nation. Now 
this constitutional right is under attack by those who seek to use 
technology's advances in digital reproduction and Internet 
communication and commerce for their own commercial gain through 
advertising sales and fees by employing only a ``good faith effort'' to 
find the rightsowner and secure permission to use the rightsowner's 
property. Post facto compensation does not remove the legal burden 
under the Constitution to secure the rightsowner's permission. Nor will 
such change in copyright law protect the rights owner but will allow 
practices that will mislead the intellectual property community and the 
broader citizenry into believing permission by the rightsholder exists 
and that traditional copyright protection under the Constitution is 
still honored in this land.

3. Formal Approach
    A registry should be a private rather than government enterprise. A 
registry can only work if it is policed, and, in this case, private 
enterprise in the form of licensing agencies would be adequate to meet 
most market demands (Here we leave aside the problem of widespread 
copying and recopying over the Internet for commercial gain, which 
licensing agencies and even government agencies are challenged to 
address).
    Likewise, elaborate systems of optional registration will not serve 
to facilitate use by marketers to end users, and, further, will confuse 
rights owners. In the National Writers Union's quarter century of 
experience, many freelancers and even some publishers often assume that 
registration with the Copyright Office is unnecessary because copyright 
is automatic once the work is put into tangible form. But when the 
complicated system of additional protections, legal deadlines, 
compensatory versus statutory damages, and so on, that are provided by 
registration are explained to them, their eyes often glaze over and 
they either defer or look for lawyers. The present system, in fact, is 
one that only a lawyer can like, with the exception that requiring 
registration to gain access to the full protection of the law 
(statutory damages) creates an onerous and unnecessary burden on the 
rights owner which, unless undertaken, does not attract lawyers to take 
up the rights owner's plea for relief. Yet another complicated system 
of optional registration would compound the problems that the system 
already fails to remedy.
4. Nature of ``Orphan Works'': Age
    Adjusting requirements according to the age of a work is a needless 
complication that further interferes with understanding and compliance. 
KISS should be the watchword.

5. Effect of a Work Being Designated ``Orphaned''
    Official designation of a copyrighted work as ``orphaned'' would, 
of course, be unnecessary in a system of registries and licensing 
agencies, which can better assure legal use of copyrighted work and 
compliance with the law. Arbitrarily declaring a copyrighted work, the 
property of a citizen, an ``orphan'' merely sets the stage for the work 
being effectively declared a ward of the state as a prelude to a rights 
grab by a third party seeking to exploit the ``orphan'' for commercial 
advantage. Let us be sure, instead, that the United States is not 
moving business practices back in time to when kidnapping and 
exploiting of ``orphans'' was tolerated, never mind legally condoned.

 Letter from David Sanger, President, the Stock Artists Alliance (SAA)