[Federal Register Volume 77, Number 204 (Monday, October 22, 2012)]
[Notices]
[Pages 64555-64561]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-25932]


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LIBRARY OF CONGRESS

Copyright Office

[Docket No. 2012-12]


Orphan Works and Mass Digitization

AGENCY: Copyright Office, Library of Congress.

ACTION: Notice of inquiry.

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SUMMARY: The U.S. Copyright Office is reviewing the problem of orphan 
works under U.S. copyright law in continuation of its previous work on 
the subject and in order to advise Congress as to possible next steps 
for the United States. The Office has long shared the concern with many 
in the copyright community that the uncertainty surrounding the 
ownership status of orphan works does not serve the objectives of the 
copyright system. For good faith users, orphan works are a frustration, 
a liability risk, and a major cause of gridlock in the digital 
marketplace. The issue is not contained to the United States. Indeed, 
in recent months, the European Commission has adopted measures that 
would begin to resolve the issue in certain contexts and a number of 
foreign governments are reviewing or proposing solutions. The Copyright 
Office seeks comments regarding the current state of play for orphan 
works. It is interested in what has changed in the legal and business 
environments during the past few years that might be relevant to a 
resolution of the problem and what additional legislative, regulatory, 
or voluntary solutions deserve deliberation. This is a general inquiry 
and the Office will likely publish additional notices on this topic.

DATES: Comments are due by 5:00 p.m. EST on January 4, 2013. Reply 
comments are due by 5:00 p.m. EST on February 4, 2013.

ADDRESSES: All comments shall be submitted electronically. A comment 
page containing a comment form is posted on the Copyright Office Web 
site at http://www.copyright.gov/orphan/comment-submission. The Web 
site interface requires commenting parties to complete a form 
specifying name and organization, as applicable, and to upload comments 
as an attachment via a browser button. To meet accessibility standards, 
commenting parties must upload comments in a single file not to exceed 
six megabytes (``MB'') in one of the following formats: the Adobe 
Portable Document File (``PDF'') format that contains searchable, 
accessible text (not an image); Microsoft Word; WordPerfect; Rich Text 
Format (``RTF''); or ASCII text file format (not a scanned document). 
The form and face of the comments must include both the name of the 
submitter and organization. The Copyright Office will post all comments 
publicly on the Copyright Office's Web site exactly as they are 
received, along with names and organizations. If electronic submission 
of comments is not feasible, please contact the Copyright Office at 
202-707-8350 for special instructions.

FOR FURTHER INFORMATION CONTACT: Karyn Temple Claggett, Senior Counsel, 
Office of Policy and International Affairs, by email at kacl@loc.gov; 
or Catherine Rowland, Senior Counsel, Office of Policy and 
International Affairs, by email at crowland@loc.gov; or contact the 
Copyright Office by telephone, at 202-707-8350.

SUPPLEMENTARY INFORMATION:

I. Background

    An ``orphan work'' is an original work of authorship for which a 
good faith, prospective user cannot readily identify and/or locate the 
copyright owner(s) in a situation where permission from the copyright 
owner(s) is necessary as a matter of law.\1\ Under current law, anyone 
who uses an orphan work without permission runs the risk that the 
copyright owner(s) may bring an infringement lawsuit for substantial 
damages, attorneys' fees, and/or injunctive relief unless a specific 
exception or limitation to copyright applies.\2\ In such a situation, a 
productive and beneficial use of the work may be inhibited--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 identify and/or locate the owner and 
therefore cannot determine whether, or under what conditions, he or she 
may make use of the work. This outcome is difficult if not impossible 
to reconcile with the objectives of the copyright system and may unduly 
restrict access to millions of works that might otherwise be available 
to the public (e.g., for use in research, education, mainstream books, 
or documentary films). Accordingly, finding a fair solution to the 
orphan works problem remains a major goal of Congress and a top 
priority for the Copyright Office.
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    \1\ See United States Copyright Office, Report on Orphan Works 
(2006) (``Orphan Works Report'' or ``Report,'' at 1, available at 
http://www.copyright.gov/orphan/orphan-report.pdf.
    \2\ The Copyright Act, 17 U.S.C. Sec.  101 et seq., includes 
several exceptions and limitations that would allow use of orphan 
works under certain circumstances, such as Sec.  107 (fair use), 
Sec.  108(h) (use by libraries during the last twenty years of the 
copyright term), and Sec.  115(b) (statutory license to distribute 
phonorecords). The Office concluded in its Orphan Works Report, 
however, that existing provisions would not address many orphan 
works situations. See Orphan Works Report at 7.
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A. 2006 Report on Orphan Works

    The Copyright Office published its Orphan Works Report (``Report'') 
in January 2006, after conducting a comprehensive study at the request 
of Congress. The Report documented the experiences of users who are 
unable to find copyright owners, the kinds of works at issue, and the 
kinds of projects that may be forestalled. It analyzed the legal 
issues, including the application of statutory damages in the orphan 
works context, and discussed a variety of possible solutions. In 
preparing the Report, the Office conducted an extensive public outreach 
process, including a series of roundtables in New York City and 
Washington, DC and a public comment period that yielded over 850 
written comments from a variety of stakeholders. In short, the Office 
concluded that the problem of orphan works is pervasive; it affects a 
broad cross-section of stakeholders including members of the general 
public, archives, publishers, and filmmakers.
    The orphan works problem was exacerbated by a series of changes in 
U.S. copyright law over the past thirty-plus years. These changes 
slowly but surely relaxed the obligations of copyright owners to assert 
and manage their rights and removed formalities in the law that had 
served in part to provide users with readily accessible copyright 
information. Significant among those changes were the elimination of 
the registration and notice requirements, which resulted in less 
accurate and incomplete identifying information on works, and the 
automatic renewal of copyrighted works that were registered before the 
effective

[[Page 64556]]

date of the 1976 Copyright Act.\3\ Subsequent amendments, such as the 
Sonny Bono Copyright Term Extension Act of 2008, extended the duration 
of copyright and increased the likelihood that some copyright owners 
would become unlocatable. To be clear, Congress amended the law for 
sound reasons, primarily to protect authors from technical traps in the 
law and to ensure U. S. compliance with international conventions. 
However, ``the net result of these amendments has been that more and 
more copyright owners may go missing.'' \4\
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    \3\ These changes, as well as other changes in the 1976 Act and 
in the Berne Convention Implementation Act of 1988, were important 
steps toward harmonizing U.S. copyright law with international 
treaties.
    \4\ Letter of Marybeth Peters, Register of Copyrights, U.S. 
Copyright Office (Sept. 25, 2008), available at http://www.copyright.gov/orphan/.
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    As reflected in the Report, all kinds of works are potentially at 
issue, from music to books to film clips. That said, the Report also 
reflects that a significant percentage of the problem, if not the 
lion's share, involves orphan photographs. Photographs are particularly 
challenging because they affect a vast variety of images, from 
historically important archival photographs residing in archives to 
contemporary photographs for which there may or may not be a living 
copyright owner. Photographs of all kinds also frequently lack or may 
become divorced from ownership information; that is, no label or 
caption is affixed to the photographs themselves. As a result, 
potential users of photographic works often lack the most basic 
information to begin a search. The Office received many comments 
focused on the difficulty of obtaining information about the author or 
copyright owner of individual photographs, and the numerous situations 
where photographs could not be used because the potential user could 
not discern a search path, let alone ownership.
    After reviewing a number of possible legislative solutions, the 
Office recommended a limitation on remedies, with some caveats. In 
general, the Office recommended that Congress amend the Copyright Act 
to limit the remedies available against good faith users of orphan 
works after the user had performed a ``reasonably diligent search'' for 
the owner of that work and conditional upon the user providing 
attribution to the author and owner of the work wherever possible.\5\ 
Notably, the Office did not at this early stage recommend specific 
statutory or regulatory guidelines for determining a reasonably 
diligent search, but ``favor[ed] the development of guidelines or even 
binding criteria'' by users and stakeholders.\6\ If a user satisfied 
the statutory requirements, the Office recommended that Congress limit 
the remedies that the copyright owner could seek against the good faith 
user of an orphan work to injunctive relief and ``reasonable 
compensation'' for the use of the work.\7\ The Office also recommended 
a ``take-down'' option for certain noncommercial users engaged in 
noncommercial activities.
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    \5\ See Orphan Works Report at 93-120.
    \6\ Id. at 108-10.
    \7\ Id. at 115-21.
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B. 2008 Proposed Legislation

    Both the 109th and the 110th Congresses considered the orphan works 
problem, in each case introducing legislation that built upon many of 
the Copyright Office's recommendations.\8\ The proposed legislation 
would have: (1) Limited remedies available under the Copyright Act when 
a user is unable to locate the copyright owner or other appropriate 
rights holder after conducting a good faith reasonably diligent search; 
(2) been applicable on a case-by-case basis, meaning that users could 
not assume that an orphan work would retain its orphan status 
indefinitely; and (3) permitted the copyright owner or other rights 
holder later to collect reasonable compensation from the user, but not 
statutory damages or attorneys' fees. In other words, the proposed 
legislation did not create an exception or limitation of general 
applicability, but rather placed a limitation on the remedies that 
might be imposed in a particular circumstance with respect to a 
particular user. The legislation also provided a special provision for 
noncommercial actors engaged in noncommercial activities, with some 
conditions.
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    \8\ Proposed bills included: The Shawn Bentley Orphan Works Act 
of 2008, S. 2913, 110th Cong. (2008), which was passed by the 
Senate; the Orphan Works Act of 2008, H.R. 5889, 110th Cong. (2008); 
and the Orphan Works Act of 2006, H.R. 5439, 109th Cong. (2006).
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    Photographs proved to be a particularly complex and difficult area 
to resolve. As cited in the Report and the congressional deliberations 
that followed, the problem of orphan photographs is well documented. At 
the same time, Congress wrestled with how best to protect photographers 
who are the victims of accidental or nefarious acts, including 
purposeful deletion of bylines, captions, or digital watermarks. The 
2008 bills built upon the foundation of the 2006 bill and included a 
number of proposals designed with photographers in mind, such as: A 
provision in both the House and the Senate drafts that required users 
to promptly compensate copyright owners should they appear (including 
for example, where the amount of payment might be too small to make 
litigation to collect it worthwhile); provisions in both drafts that 
would have excluded infringements resulting from fixation of a 
pictorial, graphic, or sculptural work in or on a useful article that 
is offered for sale or other commercial distribution to the public 
(e.g., the use of photographs on tote bags or similar mass 
merchandise); and a provision in the House draft that required a user 
to file search information and related evidence with the Copyright 
Office under fees to be set by regulation. Moreover, the 2008 bills 
would have delayed the effective date of legislation until such time as 
the Copyright Office could confirm the availability of two ``separate 
and independent searchable, comprehensive electronic databases, that 
allow for searches of copyrighted works that are pictorial, graphic, 
and sculptural works[.]'' \9\
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    \9\ See H.R. 5889, at Section 4(b)(1) (delaying effective date 
of legislation for pictorial, graphic, and sculptural works until 
January 2013 or the Copyright Office could confirm the availability 
of searchable databases); see also S. 2913, at Section 2 (delaying 
effective date of entire legislation until January 2013 or the 
Copyright Office could confirm the availability of searchable 
databases for certain pictorial, graphic, and sculptural works).
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    Search criteria also became a major focus in both the House and the 
Senate, and stakeholders with a variety of perspectives engaged in 
discussions and refinement of the bills throughout the 2008 
deliberations. Ultimately, Congress settled upon an innovative mix of 
mandatory and voluntary requirements that served to provide meaningful 
guidance to users, and incentives to copyright owners to make 
themselves locatable (including through investment in registries and 
search tools that might connect users to them). For example, the bills 
set forth certain baseline requirements (such as searching the online 
records of the Copyright Office), but also would have required users to 
consult the best practices applicable to the work at issue (e.g., 
practices for finding photographers or filmmakers), which would be 
developed through the participation of both copyright owners and 
copyright users and coordinated by the Register of Copyrights.
    Congress came very close to adopting a consensus bill shortly 
before the presidential election in 2008, but did not enact orphan 
works legislation before adjourning.

[[Page 64557]]

C. Ongoing Litigation

    Recent high-profile litigation in the United States raised 
additional questions and concerns regarding orphan works, particularly 
in the context of mass digitization. The possibility of mass 
digitization was not squarely addressed by parties responding to the 
Copyright Office in 2005-2006, is not a focus of the Orphan Works 
Report, and was not addressed by Congress in its proposed legislation. 
The Report does reflect some limited discussion of the increased risk 
of institutions that might want to use more than one orphan work in a 
single project, such as an archive posting multiple historic images to 
its Web site. This discussion informed and led to the special 
provisions for noncommercial actors addressed above, but it did not 
address situations where works might be digitized systematically, 
including for preservation purposes, or situations where collections of 
works might be reproduced en masse, including through public-private 
partnerships. Ultimately, the issues at the heart of mass digitization 
are policy issues of a different nature: the works may in fact have 
copyright owners, but it may be too labor-intensive and too expensive 
to search for them, or it may be factually impossible to draw 
definitive conclusions about who the copyright owners are or what 
rights they actually own.
(1) Google Books Search Litigation
    In 2004, Google began an ambitious project to scan and digitize 
millions of books held in several major academic libraries, including 
many books still protected by copyright. As part of its ``Google 
Books'' project, Google provided digital copies of the scanned books to 
partner libraries and made text of the books available for online 
searching. Users were permitted to view ``snippets'' of scanned books 
that were still protected by copyright and to download full copies of 
books that were in the public domain. Google did not, however, obtain 
permission from the relevant copyright owners for the project. In 2005, 
a group of authors and publishers filed a class action lawsuit in 
federal district court asserting that the Google Books project amounted 
to willful copyright infringement.\10\
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    \10\ For a discussion of the background of the case, see Authors 
Guild, Inc. v. Google Inc., 770 F. Supp. 2d 666 (S.D.N.Y. 2011). A 
group of photographers and illustrators filed a related suit in 
2010. See Am. Soc'y of Media Photographers, Inc. v. Google Inc., No. 
10-2977 (S.D.N.Y. 2010).
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    The parties filed a proposed settlement with the district court on 
October 28, 2008. After significant objections from various individual 
authors, groups, and foreign governments, the parties filed an amended 
settlement agreement on November 13, 2009. Under the terms of the 
amended settlement, copyright owners of out-of-print books were 
required to ``opt out'' of the settlement or their works could be 
scanned, digitized, and exploited by Google through a number of new 
business arrangements. These business arrangements included online 
access, use of the books in subscription databases, and use of 
advertisements in connection with these services. The settlement also 
proposed to establish a ``Book Rights Registry'' (the ``Registry'') 
that would maintain a database of rights holders and administer 
distribution of revenues from exploitation of the scanned books. Google 
would provide payments to the Registry on behalf of rights holders and, 
in turn, the Registry would distribute the funds to registered rights 
holders. If no rights holder came forward to claim the funds after a 
certain amount of time, the funds could be used to cover the expense of 
searching for copyright owners or donated to literary-based 
charities.\11\
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    \11\ See Authors Guild, Inc., 770 F. Supp. 2d at 670-71.
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    The Department of Justice (``DOJ'') filed two statements of 
interest in the case on behalf of the United States. DOJ acknowledged 
that ``[b]reathing life into millions of works that are now effectively 
dormant'' and increasing public access to those works is a ``worthy 
objective[ ].'' \12\ At the same time, DOJ expressed concern that the 
settlement could conflict with core principles of the Copyright Act and 
also confer a ``significant and possibly anticompetitive advantage'' on 
Google.\13\
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    \12\ Statement of Interest of the United States of America 
Regarding Proposed Amended Settlement Agreement, Authors Guild, Inc. 
v. Google, Inc., No. 05-8136 (S.D.N.Y Feb. 4, 2010) at 1, available 
at http://www.justice.gov/atr/cases/f255000/255012.pdf.
    \13\ Id. at 2.
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    On March 22, 2011, Judge Chin of the United States District Court 
for the Southern District of New York rejected the amended settlement 
agreement filed in the case.\14\ The opinion acknowledged that ``the 
benefits of Google's book project are many.'' \15\ The court, however, 
also expressed concern about the potential reach of the parties' 
proposal. Ultimately, the court concluded that the proposed settlement 
would inappropriately implement a forward-looking business arrangement 
granting Google significant rights to exploit entire books without 
permission from copyright owners, while at the same time releasing 
claims well beyond those presented in the dispute.\16\ The court noted 
that the settlement would give Google--and Google alone--the ability to 
control the digital commercialization of millions of books as it would 
require authors and other rights holders of out-of-print books to ``opt 
out'' of the settlement by objecting to the reproduction, distribution, 
and display of their works.
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    \14\ See Authors Guild, Inc., 770 F. Supp. 2d 666.
    \15\ Id. at 670.
    \16\ Id at 677.
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    The court rejected the settlement in part because of the 
settlement's treatment of orphan works. The court expressly deferred to 
Congress on orphan works-related issues, stating that the ``questions 
of who should be entrusted with guardianship over orphan books, under 
what terms, and with what safeguards, are matters more appropriately 
decided by Congress than through an agreement among private, self-
interested parties.'' \17\ Citing Supreme Court precedent, the court 
also affirmed that it is ``Congress's responsibility to adapt the 
copyright laws in response to changes in technology.'' \18\ Finally, 
the court asserted that the settlement agreement would raise 
international concerns and thus for that reason as well, ``the matter 
is better left for Congress.'' \19\
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    \17\ Id.
    \18\ Id.
    \19\ Id. at 678.
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    The Second Circuit recently stayed the case pending Google's appeal 
of class certification. On October 4, 2012, the five major publisher 
plaintiffs settled with Google. According to public statements about 
the settlement, the publisher plaintiffs will be permitted to choose 
whether or not to include digitized books in the Google Books 
project.\20\ Further details of the settlement have not been made 
public. Notably, the settlement does not appear to require formal court 
approval because it only resolves the claims of the specific publisher 
plaintiffs. The settlement does not affect claims made by the Authors 
Guild or non-parties to the lawsuit. Therefore, the settlement would 
not address claims over orphan works.
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    \20\ See Statement of the Ass'n of Am. Publishers, Publishers 
and Google Reach Settlement (Oct. 4, 2012), available at http://www.publishers.org/press/85/.
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(2) HathiTrust Litigation
    On September 12, 2011, the Authors Guild, along with two foreign 
authors' groups and a number of individual

[[Page 64558]]

authors, sued an online digital repository known as the HathiTrust 
Digital Library (``HathiTrust'') and its five major university 
partners.\21\ The suit challenged HathiTrust's digitization efforts and 
its plan to digitize and make available orphan works to faculty, 
students, and library patrons (the ``Orphan Works Project''). In 
addition to its overarching claim of copyright infringement, the 
complaint alleged, inter alia, that the Authors Guild was easily able 
to locate several of the authors whose works were deemed orphaned and 
digitized by the HathiTrust. Thus, the Authors Guild argued that the 
Orphan Works Project was not actually limited to orphan works. The 
Authors Guild sought an injunction preventing defendants from ``making 
available any so-called orphan work protected by copyright'' and 
impoundment of ``all unauthorized digital copies of works protected by 
copyright.'' \22\ Shortly thereafter, HathiTrust suspended the Orphan 
Works Project indefinitely.
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    \21\ Authors Guild, Inc. v. HathiTrust, No. 11-6351 (S.D.N.Y. 
filed Sept. 12, 2011).
    \22\ First Am. Compl. at page 28, Authors Guild, Inc. v. 
HathiTrust, No. 11-6351 (S.D.N.Y 2011).
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    On July 27, 2012, the parties in Authors Guild, Inc. v. HathiTrust 
submitted their final round of briefs connected to their motions for 
summary judgment.\23\ The Authors Guild's motion asked the court to 
reject the defendants' copyright defenses, including fair use. The 
Authors Guild also urged the court to issue an injunction against the 
HathiTrust's suspended Orphan Works Project. The Authors Guild 
acknowledged in its reply brief that the ``issues raised by orphan 
works * * * are important,'' but argued that ``[b]y scanning the books 
without authority, Defendants usurp authors' rights to control the 
digital reproduction of their work and expose them to security risks 
that previously did not exist.'' \24\
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    \23\ A third motion, in support of the HathiTrust, was filed by 
the National Federation of the Blind. See Def. Intervenors' Reply in 
Supp. of Mot. for Summ. J., Authors Guild, Inc. v. HathiTrust, No. 
11-6351 (S.D.N.Y. filed July 27, 2012).
    \24\ See Reply Mem. of Law in Further Supp. of Pls.' Mot. for 
Summ. J. at 1, 2, Authors Guild, Inc. v. HathiTrust, No. 11-6351 
(July 27, 2012).
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    The HathiTrust and its partner libraries argued in their reply 
brief that all four factors of a fair use analysis favor the libraries' 
activities, even in an environment of rapid technological 
advancement.\25\ ``Plaintiffs continue to ask this Court to wait for 
Congress to legislate,'' the defendants stated, but ``[w]here, as here, 
Congress has not spoken, courts should `take the Copyright Act * * * as 
[they] find it,' rather than close off publicly beneficial uses made 
possible by a new technology.'' \26\
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    \25\ See Reply Mem. in Supp. of the Libraries' Mot. for Summ. J. 
on Fair Use and Lack of Infringement Under Section 106 of the 
Copyright Act, Authors Guild, Inc. v. HathiTrust, No. 11-6351 
(S.D.N.Y. July 27, 2012).
    \26\ Id. at 1 (citations omitted).
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    On October 10, 2012, the district court ruled in favor of the 
HathiTrust and its partner libraries on issues relating to 
digitization, preservation, searching,\27\ and access for the print-
disabled.\28\ The court found that these activities are largely 
transformative and ultimately protected by fair use, further opining 
that ``the underlying rationale of copyright law is enhanced'' by the 
HathiTrust digital library.\29\ The court did not reach the merits of 
the copyright claims with respect to the Orphan Works Project, however, 
finding instead that the issue is not ripe for adjudication because the 
contours of the Orphan Works Project have changed and the defendants 
have suspended the project.\30\
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    \27\ The court took care to note that the searching function did 
not reveal any copyrighted material. See Authors Guild, Inc. v. 
HathiTrust, No. 11-CV-6351, 2012 WL 4808939 (S.D.N.Y. Oct. 10, 
2012).
    \28\ See id.
    \29\ Id. at *14.
    \30\ Id. at *7-8.
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D. The Role of the Copyright Office and Private Registries

    In October 2011, the Register of Copyrights released a two-year 
plan of priorities and special projects for the U.S. Copyright Office. 
The special projects include several technical endeavors designed to 
update the Office's record systems, which may help users to locate a 
copyright owner or confirm the suspicion that no such owner exists.
(1) Historic Copyright Records
    One such project is the Office's multiyear effort to digitize the 
entire inventory of historic copyright records dating back to 1870, 
many of which are still relevant in determining the copyright status of 
many works. Since 2008, the Office has digitized more than 22 million 
of the Office's approximately 60 million historical records. The Office 
is also engaged in a variety of investigative endeavors, including 
crowd sourcing, to determine how best to make the records searchable. 
This task is no small feat because the records are unique and cannot be 
destroyed or put at risk during the digitization process. Some 
historical records date back nearly to the civil war. They range from 
index cards to large documents, and some are written in pencil. Through 
this project, the Office has engaged with a number of experts and the 
public (through meetings, blogs, and crowd sourcing) to evaluate cost-
effective approaches to metadata capture, public display, and how best 
to make the scanned materials publicly available in a meaningful way as 
soon as possible.
(2) Upgrades to Copyright Registration and Recordation Systems
    Alongside the digitization of the Office's historic records, the 
Office is also actively pursuing a comprehensive analysis of its 
electronic registration and recordation systems, not only to enhance 
the experience for authors and copyright owners, who rely on these 
services to secure legal rights, but also to develop a plan for 
improving the nature, accuracy, and searchability of the Office's 
public databases. The Office is meeting with a diverse range of 
business and information technology experts to explore appropriate 
technical upgrades and enhancements, including exploring the 
feasibility of connecting the Office's database of copyright ownership 
records with private sector data to facilitate licensing and other 
productive uses of copyrighted works.
    Together, these projects lay the foundation necessary to build and 
maintain a twenty-first century database of copyright ownership 
information that will enhance public access to information and improve 
potential users' ability to investigate the copyright status of works, 
including the identification and location of copyright owners.

E. Discussion of Legal Issues in Mass Digitization

    Outside of litigation, the issue of mass digitization has been 
aired largely through the symposia of academic institutions or 
professional associations (i.e., bar associations).\31\ To further the 
conversations, the Copyright Office published a Preliminary Analysis 
and Discussion Document (the ``Analysis'') \32\ in October 2011, in 
which it laid out the issues raised by the intersection between 
copyright law and the mass digitization of books, including

[[Page 64559]]

some of the issues raised by the Google Books and HathiTrust cases. The 
Office identified a number of key legal and policy questions to explore 
when assessing mass digitization, including the objectives and public 
policy goals of mass digitization projects, the interplay among library 
exceptions, fair use, and licensing, and the ability of public and 
private actors to work together.
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    \31\ For example, the Berkeley Center for Law and Technology 
hosted a symposium entitled Orphan Works and Mass Digitization in 
April 2012. Additionally, the Kernochan Center for Law, Media and 
the Arts at Columbia Law School, in cooperation with the Copyright 
Office, will present a public symposium on November 2, 2012, which 
will include discussions of mass digitization in the context of 
Section 108.
    \32\ United States Copyright Office, Legal Issues in Mass 
Digitization: A Preliminary Analysis and Discussion Document (2011), 
available at http://www.copyright.gov/docs/massdigitization/USCOMassDigitization_October2011.pdf.
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    In the Analysis, the Office observed that under current law the 
issues of mass digitization and orphan works cannot reasonably be 
separated from the issue of licensing because the premise of an orphan 
works situation is that a good faith user has tried to, or would like 
to, locate the copyright owner but cannot. The Office described 
existing licensing options (direct licensing and voluntary collective 
licensing), as well as two licensing models (extended collective 
licensing and statutory licensing) that might operate as potential if 
not partial solutions for the orphan works problem, particularly in the 
mass digitization context.\33\
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    \33\ In the context of voluntary collective licensing of books, 
the most experienced organization is the Copyright Clearance Center 
(``CCC''). The CCC was started by publishers in the age of 
photocopying and has since evolved to handle certain kinds of 
digital licenses. Voluntary collective licensing, however, does not 
provide solutions for orphan works where the authors are unknown and 
have not joined the collecting society.
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    The Office noted that while the United States has not adopted 
extended collective licensing, these regimes exist in a number of 
Nordic countries.\34\ Typically, this model operates something like a 
class action settlement, in the sense that representatives of copyright 
owners and representatives of users negotiate terms that are binding on 
all members of the group by operation of law (e.g., all textbook 
publishers), unless a particular copyright owner opts out. The 
government or a trusted designee administers payments. It is not quite 
compulsory licensing in that the parties (rather than the government) 
negotiate the rates, but it requires a legislative framework and often 
involves some degree of government oversight. Finally, the Office 
discussed the potential use of statutory licenses created by Congress. 
Statutory licenses provide users with access to certain types of works, 
under certain circumstances, in exchange for a statutorily or 
administratively set fee. The Office has traditionally viewed statutory 
licenses as a mechanism of last resort that must be narrowly tailored 
to address a specific failure in a specifically defined market.
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    \34\ See Analysis at App. F (listing countries that follow this 
approach and providing an overview of the laws).
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F. International Developments

    Foreign countries are also renewing their focus on the orphan works 
problem. The European Union and various other countries have recently 
proposed or adopted a number of legislative approaches to the orphan 
works issue.
(1) Recent and Proposed Legislation
    Like the United States, the European Union has been grappling with 
the issue of orphan works for many years. In 2011, the European 
Commission issued a draft proposal for an orphan works directive along 
with a working paper entitled ``Impact Assessment on the Cross Border 
Online Access to Orphan Works.'' \35\ The Commission acknowledged the 
difficulties caused by orphan works and noted that a solution in the 
European Union was particularly urgent to avoid a ``knowledge gap'' 
with the United States if the then-pending Google Books Settlement was 
approved. The Commission identified several policy options for handling 
orphan works and assessed the economic and social impacts of each. 
Among the policy options the Commission considered was a statutory 
exception, extended collective licensing, and a specific orphan works 
license.
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    \35\ European Commission, Commission Staff Working Paper Impact 
Assessment on the Cross-Border Online Access to Orphan Works 
Accompanying the Proposal for a Directive of the European Parliament 
and of the Council on Certain Permitted Uses of Orphan Works, COM 
(2011) 289 final (May 24, 2011), available at http://ec.europa.eu/governance/impact/ia_carried_out/docs/ia_2011/sec_2011_0615_en.pdf.
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    The European Council formally approved the proposed orphan works 
directive (``Directive'') on October 4, 2012.\36\ The Directive 
requires Member States to establish an exception and limitation to the 
rights of reproduction and ``making available'' for certain permitted 
uses of orphan works. The Directive excludes photographs unless 
embedded in other works, and limits the use of orphan works to 
``libraries, educational establishments or museums * * * archives, film 
or audio heritage institutions and public service broadcasting 
organizations'' that are located in Member States and that have public 
service missions.\37\ A public organization that falls under the 
Directive may partner with a private organization and ``generate 
revenues in relation to their use of orphan works'' if that use is 
consistent with the public organization's mission.\38\ The private 
partner, however, will not be permitted to use the works directly. The 
Directive requires a diligent search and provides that once a work is 
deemed orphaned in one Member State, it is deemed orphan in all Member 
States and ``may be used and accessed'' in all Member States. The 
Directive also calls for a single registry to maintain data on all 
works deemed orphan. A rights holder who later resurfaces may reclaim 
ownership of a work once deemed orphan and claim fair compensation for 
the use of the work as provided by individual Member States' laws. 
Member States have two years to implement the Directive in national 
legislation.
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    \36\ The European Council's approval marked the last step in the 
legislative process. See Press Release, Council of the European 
Union, Intellectual Property: New EU Rules for Orphan Works (Oct. 4, 
2012), available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/132721.pdf.
    \37\ See Directive of the European Parliament and of the Council 
on Certain Permitted Uses of Orphan Works, Art. 1(1), available at 
http://register.consilium.europa.eu/pdf/en/12/pe00/pe00036.en12.pdf.
    \38\ Id. at p. 13, ] 21.
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    The European Commission also recently assisted private parties in 
negotiating a Memorandum of Understanding (``Memorandum'') to encourage 
voluntary collective licensing for ``out-of-commerce'' books and 
journals.\39\ ``Out-of-commerce'' works are works that are no longer 
commercially available because authors and publishers have chosen not 
to publish new editions or sell copies through the customary channels 
of commerce. The Memorandum expresses several principles that 
libraries, publishers, authors, and their collecting societies should 
follow in order to license the digitization and making available of 
books or journals that are out-of-commerce. The European Commission 
views the Memorandum as complimentary to its legislative proposals for 
orphan works, and part of a two-pronged approach to facilitate the 
development of digital libraries in Europe.
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    \39\ Memorandum of Understanding, Key Principles of the 
Digitsation and Making Available of Out-of-Commerce Works (Sept. 20, 
2011), available at http://ec.europa.eu/internal_market/copyright/docs/copyright-infso/20110920-mou_en.pdf.
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    Additionally, the United Kingdom issued proposed legislation \40\ 
in 2012 that would amend the Copyright, Designs and Patents Act of 1988 
to permit the commercial and non-commercial use of orphan works under a 
licensing scheme that would include both individual licensing of orphan 
works as well as a form of voluntary

[[Page 64560]]

extended collective licensing. The scheme would require a diligent 
search, the results of which would be verified by ``an independent 
authorising body.'' \41\ The proposal would also establish an orphan 
works registry and, if the name of the rights holder is unknown (and 
therefore cannot be credited), any licensed use of the work would have 
to include a notice that refers back to the registry.\42\ The potential 
scheme is described as one in which rights holders will always reserve 
the right to opt out.\43\
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    \40\ Enterprise and Regulatory Reform Bill, 2012-13, (HC Bill 
61), cl. 59, available at http://www.publications.parliament.uk/pa/bills/cbill/2012-;2013/0061/cbill--2012-20130061--en--1.htm.
    \41\ See Government Policy Statement: Consultation on 
Modernising Copyright, at 7 (July 2012), available at http://www.ipo.gov.uk/response-2011-copyright.pdf.
    \42\ Id. at 8.
    \43\ See id. at 10; see also The BIS Blog, Copyright Reform: 
Orphan Works and Extended Collective Licensing, Aug. 14, 2012, 
available at http://blogs.bis.gov.uk/blog/2012/08/14/copyright-reform-orphan-works-and-extended-collective-licensing (``The 
Government's proposals for ECL are not compulsory nor can they be 
imposed on a sector. It would be up to a collecting society to apply 
to use the system and every rights holder would retain the capacity 
to opt out.'').
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(2) Existing Laws
    Several countries already have adopted forms of orphan works 
solutions in national law. The Canadian Copyright Act (Section 77) 
permits users to file applications with the Copyright Board of Canada 
for the use of certain types of orphan works on a case-by-case basis. 
If an applicant demonstrates that it made a reasonable effort to locate 
the rights holder and the rights holder cannot be located, the Board 
will approve the request and issue a conditional non-exclusive 
license.\44\ Pursuant to the Canada Copyright Act, the Copyright Board 
may issue licenses permitting uses including reproduction, publication, 
performance, and distribution. In June 2012, Canada passed amendments 
to its Copyright Bill that included an expansion of the exception for 
nonprofit organizations acting for the benefit of persons with 
perceptual disabilities to cover cross-border exchanges of orphan works 
that have been translated into a print disabled format.\45\ The 2006 
Orphan Works Report identified some of the Canadian system's burdens, 
and several studies have noted that it is rarely used.\46\
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    \44\ Copyright Act, R.S.C., c. C-42, s. 77 (1985) (Can.), 
available at http://laws.justice.gc.ca/PDF/C-42.pdf.
    \45\ Id. at s. 32.
    \46\ Orphan Works Report at 82-83.
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    France passed a law in February 2012 that would make it easier to 
digitize twentieth century out-of-commerce books, implicating books 
published in France before January 1, 2001, which are not currently 
being commercially distributed or published either in print or digital 
formats.\47\ The scheme is conducted on an opt-out basis and, if an 
author chooses not to exploit the work within six months of the 
inscription of the book in the register managed by the French National 
Library, the digital rights are transferred to a designated collective 
management organization.\48\ If the copyright holder fails to claim 
rights to works that have been transferred to a designated collective 
management organization after ten years, libraries and archives will be 
allowed, with some exceptions, to digitize and provide access to the 
digitized works free of charge so long as the institution does not 
pursue a commercial or economic advantage.\49\
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    \47\ See Loi n[deg] 2012-287 du 1er mars 2012 relative [agrave] 
l'exploitation num[eacute]rique des livres indisponibles du xxe 
si[egrave]cle [Law Number 2012-287 of March 1, 2012, on the Digital 
Exploitation of Unavailable Books] Art. 134-1 (2012) (Fr.) (``Law 
2012-287''), available at http://www.legifrance.gouv.fr/affichTexte.do;jsessionid=4D8B77A47AA211DE6E336FD22AA18F60.tpdjo09v--
2?cidTexte=JORFTEXT000025422700&dateTexte=20121016; see also 
International Federation of Reproduction Rights Organisations, 
French Parliament Passed Law on Out of Commerce Works on 22nd 
February 2012, (March 3, 2012), available at http://www.ifrro.org/content/french-parliament-passed-law-out-commerce-works-22nd-february-2012.
    \48\ See Law Number 2012-287, Art. 134-4.
    \49\ See id., Art. 134-8.
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    Hungary amended its Copyright Act in 2009 to permit the use of 
orphan works under certain circumstances. Under the amended Act, the 
Hungarian Patent Office has the right to grant licenses for certain 
uses of orphan works to applicants who carry out a documented diligent 
search and pay compensation for such use.\50\ These licenses are 
limited to the territory of Hungary. Japan, Korea, and India have 
adopted either compulsory or government licensing for some orphan 
works.\51\
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    \50\ See Government Regulation on the Detailed Rules Related to 
the Licensing of Certain Use of Orphan Works, Arts. 2(1), 2(2), 3, 
Decree 100/2009, V. 8 (Hun.), available at http://www.hipo.gov.hu/English/jogforras/100_2009.pdf; see also Mih[aacute]ly Ficsor, How 
to Deal with Orphan Works in the Digital World? An Introduction to 
the New Hungarian Legislation on Orphan Works (European Parliament 
Committee on Legal Affairs, eds. 2009), available at http://www.europarl.europa.eu/RegData/etudes/divers/juri/2009/419607/IPOL-JURI_DV(2009)419607--EN.pdf.
    \51\ See Chosakuken-Ho [Copyright Law], Law No. 48 of 1970, 
2009, art. 67, 74 (Japan), unofficial translation available at 
http://www.cric.or.jp/cric_e/clj/clj.html); see also Copyright Act 
of Korea, No. 9785 (2009) (S. Kor.); Copyright (Amendment) Act, 
2012, at para. 17 (2012) (India), available at http://copyright.gov.in/Documents/CRACT_AMNDMNT_2012.pdf.
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    Denmark and Finland both adopted extended collective licensing 
regimes, which allow collective licensing organizations to license 
numerous works within a specific field of use, including works owned by 
rights holders who are not members of the organization and orphan 
works.\52\
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    \52\ See Consolidated Act on Copyright 2010, No. 202, Art. 50-51 
(2010) (Den.); see also Copyright Act, No. 404, Sec. Sec.  13-14 
(2010) (Fin.).
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II. Subject of Inquiry

    The Copyright Office seeks comments regarding the current state of 
play for orphan works, including what has changed in the legal and 
business environments that might be relevant to a resolution of the 
problem and what additional legislative, regulatory, or voluntary 
solutions deserve deliberation at this time. The Office has posed two 
questions below. In responding to these questions, a party may wish to 
discuss a number of relevant topics, including for example: The merits 
of limiting remedies; the interplay between orphan works and fair use, 
section 108, section 121, or other exceptions and limitations; the role 
of licensing; the types of orphan works that should be implicated; the 
types of users who should benefit; the practical or legal hurdles to 
forming or utilizing registries; international implications; and the 
relative importance of the Register's plans to improve the quality and 
searchability of Copyright Office records. The Office requests that 
responding parties separately address each of the questions for which a 
response is submitted and provide as much specificity as possible.

1. Orphan Works on an Occasional or Case-by-Case Basis

    With respect to the occasional or isolated use of an orphan work, 
how has the legal landscape or legal thinking evolved in the past four 
years? The 2008 proposed legislation included several key components: 
(a) A good faith, reasonably diligent search for the copyright owner; 
(b) attribution to the author and copyright owner, if possible and 
appropriate under the circumstances; and (c) a limitation on remedies 
that would be available if the user proves that he or she conducted a 
reasonably diligent search. Good faith users were expected to consult 
the Copyright Office Web site for practices proffered by copyright 
owners and users alike under the direction and coordination of the 
Register of Copyrights. The legislation included special provisions for 
certain noncommercial actors using orphan works in a noncommercial 
manner, as a further attempt to reduce liability for those perceived to 
be most risk-averse under current law. Moreover, the

[[Page 64561]]

legislation would have applied to all kinds of copyrighted works, 
published or unpublished, from photographs to manuscripts to music and 
books. Please comment on the continued viability of the above framework 
in the case of occasional uses of orphan works. If there are other 
possible approaches, including approaches that might best be described 
as interim approaches, please explain the benefits and supporting legal 
authority in sufficient detail.

2. Orphan Works in the Context of Mass Digitization

    The Office's Orphan Works Report did not analyze the issue of mass 
digitization in detail, and the subsequent 2008 proposed legislation 
did not squarely address the possibility of systematic or en masse 
copying, display, or distribution. Please comment on potential orphan 
works solutions in the context of mass digitization. How should mass 
digitization be defined, what are the goals and what, therefore, is an 
appropriate legal framework that is fair to authors and copyright 
owners as well as good faith users? What other possible solutions for 
mass digitization projects should be considered?
    If there are any pertinent issues not discussed above, the Office 
encourages interested parties to raise those matters in their comments. 
In addition, the Office is considering and hereby provides notice that 
it may convene one or more roundtables or formal hearings on the 
matters raised above in 2013. The Office may also publish one or more 
additional Notices of Inquiry.

    Dated: October 17, 2012.
Maria A. Pallante,
Register of Copyrights.
[FR Doc. 2012-25932 Filed 10-19-12; 8:45 am]
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