Extended Collective Licensing: an Online Survey

If you are an author, agent or publisher and you already know plenty about ECL, you may wish to skip straight to the survey. Otherwise read on:

Extended collective licensing (ECL) is a form of collective licensing of copyright works under which collecting societies are legally permitted to license the use of works created by (or belonging to) persons who are not members of their society. Last summer the UK Parliament passed primary legislation to legalise extended collective licensing by UK collecting societies. Secondary legislation is expected this autumn: this will set out in detail the regulations under which such schemes will operate.

The libraries and archives sector (or at least, the big, well-funded libraries and archives) want an ECL scheme or schemes that will permit them to digitise printed books and other materials and make them available online. The Government has announced its intention that ECL should be available for mass digitisation projects. Rumours reach me that the Copyright Licensing Agency (CLA) and the Authors’ Licensing and Collecting Society (ALCS) are preparing to move ahead with licensing such projects as soon as the law allows.

These projects will sweep up the works of foreign as well as British authors, illustrators, photographers, etc.

Members of licensing societies are going to be given the opportunity to vote on such schemes. Non-members are to be allowed to make representations to the UK government; that is, if they are exceptionally well-informed and manage to find out that a scheme is under consideration. If they find out about a scheme in time, non-members will also be allowed to opt out. (They can opt out once a scheme has started, but by that stage there will be a delay of at least six months before their works are removed from the scheme.) Members of licensing societies may also be allowed to opt out of specific schemes; whether they will be able to do this or not will depend on the rules of the particular society. [See Government response to the technical consultation on draft secondary legislation for extended collective licensing (ECL) schemes]

ECL, of course, is a major can of worms. More on that below. But first: an online survey is being conducted into authors’ views on ECL and their expectations of the opt-out process. The survey is being conducted by ‘a group of visual creators and strategists who want to get answers on the practicalities of how an Extended Collective Licensing scheme might work for authors; in particular, what it is that authors and rights owners might be opting out of and how.’ Though the initiative is coming from the visual arts sector, the organisers want to hear from writers as well as artists, illustrators and photographers, and from agents and publishers as well as authors. They would also like to hear the views of foreign writers, agents and publishers.

The survey is online here: https://www.surveymonkey.com/s/ECLAuthors.

It is quite short and will only take about five minutes to do. The deadline for completing it is 12 pm on 23 June. The organisers describe the purpose of the survey as an opportunity to say ‘what you would expect of an opt-out procedure and how you think it may affect your business’. They intend to use the findings ‘to enable creators and government to make sound judgments based on research data’.

As I have already said, ECL is a can of worms. For one thing, it will involve the intrusion of collective licensing into areas such as book publishing and licensing illustrations where direct licensing has been the standard procedure. Worse, it is going to disrupt the long-established industry practice under which authors license their books to publishers on an exclusive basis. What happens when the government permits private companies (for that is what the licensing societies are) to override the provisions in commercial agreements legally contracted between third parties? Who knows? but it appears we are about to find out. There are other problems. It is highly questionable whether ECL for book digitisation is compatible with the UK’s international obligations under the Berne Convention and other copyright and IP treaties. It is also questionable whether it is compatible with the ALCS mandate, which states: ‘the Society is … appointed to administer the rights in situations where collective administration is the most appropriate option i.e., where the fees cannot practically be obtained through any other means’. There is no doubt that the British Library and other libraries and archives would rather license rights from the collecting societies at a bulk rate than negotiate them individually with the copyright owners. But there is some money that is better left on the table. The right to make a copyright work available to the public is a primary right, and valuable. Until now, the rights typically licensed through the licensing societies have been secondary rights, rights of lesser value for which it would be difficult to collect individual payments; one well-known example is the right to license a limited amount of photocopying or scanning.

I have focused on ECL for book digitisation here since there are certainly pressures to introduce such schemes, and little doubt that there are plans in hand to bring them in. But I shall conclude by noting that there is nothing in the legislation or the proposed regulations that would prevent ECL from being applied to digital materials, including text and images published on the web. This could include works whose authors or publishers only intended to make them available for a limited time: taster chapters from books, for instance. ECL could also be used to license personal materials made available on social media. We are all published authors now.

Note: The links above are to a version of the survey specifically for writers and their representatives and copyright holders. There is another version online which is aimed at the visual arts sector. For information about that version and a link to it see this post on the 1709 blog.

Beware the Spare Rib Digitisation Project

The British Library (BL) is working on a project to digitise Spare Rib, the landmark UK feminist magazine of the seventies and eighties. The Library wants to make the digitised issues available on the web. For this it will need the permission of the several thousand contributors who provided the magazine with its material. Some of the contributors have already received a letter about the project, and there was an item in the Guardian last Saturday.

I contributed to Spare Rib myself, back in the day, and so did a number of people I know, so when a friend forwarded me the letter with attached information sheet that is being sent out to contributors I read it with very great interest. And increasing alarm. And my alarm grew the more thoroughly I investigated the way in which the scheme is being conducted.

The BL is asking all contributors to agree that their contributions should be published under a Creative Commons Attribution-Non Commercial 3.0. licence. This means that not only the BL but all future users too would be granted a perpetual licence not only to reproduce the material but to adapt it: to ‘remix, transform, and build upon’ it, as the summary on the Creative Commons website helpfully explains. The main restriction is that there should be no commercial use of the material. But this is hardly a sufficient safeguard against abuse.

If this project goes ahead, anyone with misogynist, anti-feminist and/or anti-lesbian attitudes will be able to take any and all of the letters, articles, poems, photographs, cartoons and other illustrations that feminists contributed to Spare Rib and twist and misuse them in ways that suit their own agenda. The original authors would not be able to do much, if anything, about it.

I do not find it at all pleasant to contemplate what the remix culture of the Internet could do with the poems, photographs and articles in Spare Rib. We have already seen misogynist trolls in action far too many times.

But in any case there are obvious problems with permitting this historic material to be refashioned and freely circulated in altered versions.

Meanwhile, the British Library information sheet is guilty of seriously misrepresenting the terms of the licence to which it is asking contributors to agree. It says: ‘Researchers and users of the proposed digital resource will be able to reference Spare Rib material in their work so long as it … does not in any way manipulate the material.’ Anyone who checks the actual terms of the licence will see that this statement is absolutely wrong, as I have shown above. But it is very likely that some, perhaps many contributors will hardly imagine that the BL could be wrong on such an important point, and will not find the time to check up.

The more so because, for some reason, the BL is engaging in high-pressure tactics. In their letter they press contributors to “access the online copyright clearance form within seven days” of receiving it. This accords authors, photographers and illustrators virtually no time for reflection or consultation with a lawyer, agent or professional society. It is very hard to see why they are asking this. It certainly isn’t fair on the contributors.

In any case, it is hard to understand the reason why the BL is requiring contributors to place their work under any sort of Creative Commons (CC) licence. They claim that this is ‘crucial’, but that is nonsense. All they need for their project is for contributors to agree that their work should be digitised and made available to the public on the Web. The BL surely has a lawyer or two on hand who could draft an appropriate agreement.

The ‘contract’ to which the BL wants contributors to agree is extraordinarily one-sided. The contributor grants the BL a licence ‘ in accordance with the terms of the Creative Commons Attribution Non- Commercial 3.0 Licence, and any successor version as published by Creative Commons’. The licence is irrevocable and cannot be reverted; meanwhile, the BL is not bound to anything. At all. So whether or not the Spare Rib digitisation project goes ahead the BL will have the permanent right in future to make very broad use of what in the case of some items may be valuable material.

Moreover, nowhere in the contract or in other documents relating to this project is it clearly spelled out that under the terms of the CC licence, granting it to the BL gives them the right, and imposes the obligation, to grant the same licence to users of any resources that they create using the material: and so on, ad infinitum. Or to put it another way, the licence will cascade to other users. To fully appreciate this point you would have to have some knowledge of the CC system or else click through the licence summary to the full CC licence and read down through it as far as section 8, ‘Miscellaneous’:

a. Each time You Distribute or Publicly Perform the Work or a Collection, the Licensor offers to the recipient a license to the Work on the same terms and conditions as the license granted to You under this License.

b. Each time You Distribute or Publicly Perform an Adaptation, Licensor offers to the recipient a license to the original Work on the same terms and conditions as the license granted to You under this License.

As for the idea of granting a perpetual licence on terms as yet unknown (‘any successor version as published by Creative Commons’): I can’t understand why anyone would think that that was a sensible idea.

The contract incorporates an assertion of the author’s moral right to be identified, as required by the Copyright, Designs and Patents Act. There is no assertion of her moral right to object to derogatory treatment of the work. That right does not exist in UK law for works published in newspapers or magazines (as distinct from books, for instance). Nor does it exist where a work published in a newspaper or magazine is subsquently reissued without modification: which would seem to cover the case of a direct digital copy. But if that copy were to be further modified, under a CC licence, then the moral right to object to derogatory treatment might in theory protect against abusive modifications; except that moral rights have first to be asserted. And the right to object to derogatory treatment is omitted from the assertion on the contract: so, they won’t have been asserted. This probably sounds arcane to many people, but a commenter on the Guardian website (where I left some comments on Saturday and Sunday) suggested that the right to object to derogatory treatment would be enough to protect contributors from having their work modified in ways that would distort it. It is true that the CC licence (in its full form) says that ‘ You must not distort, mutilate, modify or take other derogatory action in relation to the Work which would be prejudicial to the Original Author’s honor or reputation’. But there is a weaselly bit right above it that says ‘Except as … may be otherwise permitted by applicable law’. Now as I have just said, the right to object to derogatory treatment is only protected under UK law if that right has been asserted. It has not been asserted. So – I am not a lawyer, and I am open to correction, but as I take it, that would be applicable law: so there is nothing in the CC licence either that would protect against derogatory treatment.

But in any case moral rights are very weak rights, notoriously hard to enforce. Much better not to enter into very broad perpetual licensing arrangements with users about whom nothing whatsoever is known; better to keep as much control as possible of how your work is exploited.

The managers of this project recognise that some contributors will have reservations about it on privacy grounds. Some of the items published in Spare Rib, perhaps especially some of the letters, were very personal. The information sheet promises them that search engines will not be allowed to index the archive and ‘expose individual contributions outside of the archive interface’. But the BL staff have overlooked a major point. The use of a CC licence for this project will make it perfectly legal for other people to copy individual contributions, perhaps even abstract the entire contents of the database, and post the material on the public web in places where search engines will be able to access it.

In yet another piece of misdirection, the BL are withholding from contributors and the public the information that the complete run of Spare Rib was put on microform and microfilm long ago as part of a collection called ‘The Underground and Alternative Press in Britain’. They talk emotively about ‘paper holdings’ being ‘subject to deterioration’ and say that the project is necessary to ‘preserve’ Spare Rib ‘for future generations’. The web headline of the Guardian piece suggests histrionically that Spare Rib needs to be ‘saved’, and the article refers to it as existing ‘in paper form’. But there is no risk of losing Spare Rib. The microform/microfilm collection is available in a number of libraries in the UK and USA, including the BL. Microform is a stable form of storage.

Finally, I find it troubling that an atmosphere of fervour is being whipped up around this project with no acknowledgement that contributors are being leaned on to make their work publicly available for no remuneration. In its day Spare Rib received contributions from important poets, journalists, photographers, short story writers and novelists. It was a shoestring venture, I believe, but not an amateur one. I believe that if there is sufficient demand for the material to be made available to the public again then it is sufficiently valuable for payment to be made. I think the British Library may be trying to set a precedent with this project – a bad one.

Some contributors may be happy to forgo payment; it’s a matter for individual decision. But no one should be made to feel pressured into licensing their work in perpetuity for no return.

French Copyright Grab: the Machine Creaks into Action

On 27 February the French Republic issued a decree implementing the Loi relative à l'exploitation numérique des livres indisponibles du XXe siècle [Law relating to the exploitation in digital form of unavailable 20th century books] which was passed in March last year. For the earlier history of this law and some analysis see my previous posts France Guillotines Copyright and The New French Legislation: Further Points, including the comments; see also the web pages linked from those posts.

A first list of 60,000 books was issued by the Bibliothèque nationale de France (BnF) on 21 March. The books, which are all in copyright, and which are supposed to be commercially unavailable, will be transferred to collective management on 21 September unless the authors or their estates and/or the original publishers make successful applications to stop this happening.

Once taken into collective management, the intention is for the books, or most of them, to be digitized with public funding and issued, for profit, by publishers and content aggregators, without the permission of the authors and illustrators. In nearly every case the digital rights to the text of these books is likely to be the legal property of the authors or their heirs. Some money is supposed to be being channelled by the collecting society to those authors who apply for it. There are reasons to suppose that it will not be very much.

The legislation establishing this scheme goes thoroughly against the letter and spirit of existing French copyright law. Now that the decree has been issued, a group of French authors are planning to challenge it on constitutional grounds: ‘…the collective … “The Right of the Serf” is preparing to take legal action against the decree, aiming to file an appeal on grounds of ultra vires within two months.’ [Le nouvel Observateur, 21 March 2013: ‘…le collectif … «Le droit du serf» prépare une «action juridique contre le décret, visant à déposer un recours à l’excès de pouvoir» d’ici à deux mois.’]

The ReLIRE database

The books selected for the first stage of the French scheme are listed online in a database called ReLIRE. The database is not very good. Even the website FAQ admits that some books which are, in fact, currently available in print and/or digital form have been entered in the database in error. The database also reportedly contains more than 500 books published after the legal cut-off date, 31 December 2000. There are other problems, of which more later.

The database contains entries for a number of works by foreign authors. Some of these are French originals by authors from French-speaking areas such as Suisse Romande, Wallonia, Algeria and Quebec. There are also works that have been translated from English. Encroaching on the rights of foreign authors makes France liable to international action under the Berne Convention and other copyright treaties.

Some of the works on the database are by highly distinguished authors. These include Une Autre façon de raconter, the French text of John Berger’s Another Way of Telling, produced in collaboration with Swiss photographer Jean Mohr. Berger, though resident in France for many years, has not, I believe, taken French nationality.

The Society of Authors has advised its members to check the database to see if it includes any of their works.

Works translated from English

Not long after the database came online it was pointed out in a blog post that it contained an anthology of American science fiction in translation, including stories by such well-known authors as Ursula K. Le Guin, Samuel R. Delany, Robert Silverberg and James Tiptree, Jr. This was not the only listed anthology to contain translated stories. French author Léa Silhol found her anthology De Sang et d’Encre in the database: this contains stories by a number of British, Canadian and US authors. A third sci-fi anthology contains stories by, among others, Kingsley Amis, Philip K. Dick and Roger Zelazny.

All three of these anthologies were removed from the database, apparently after objections had been lodged by contributors and/or editors. It is noticeable that the fairly leisurely process specified in the regulations was not followed. The BnF removed these books soon after it received the objections. This contrasts with the treatment that has been given to works by French authors who have applied to have their books removed. In such cases a notice is added to the database entry; the BnF and the collecting society then have four months to process the application [example]. But these three collections containing translated short stories were removed very quickly indeed.

Another book that was in the database ten days ago has also been removed in quite a hurry; it is a translation of a work by the prolific US author Upton Sinclair (1878–1968). If you search under ‘Upton Sinclair’, the search engine will return ‘Aucun résultat’ (No result). The link to the detailed record for the book was working yesterday, and brought up the title and author, together with an error message. Today, this too has been removed, and there is only a ‘page not found’ error message.

It should be noted that attention was drawn to three further sci-fi collections, containing stories by, among others, British authors Brian Aldiss and Graham Masterton, in a comment on the blog post cited above. These books have not been removed, nor has a notice been placed on the records. It cannot be assumed that the BnF will remove a book simply because it is found to contain work by foreign nationals. A formal request must be made, in the manner prescribed in the regulations.

There are other books in the ReLIRE database that contain translations of works in English. Here are a few that I have found with two or three cursory searches. By way of experiment, I elected to search under terms like ‘mystère’ and ‘crime’, so what I have turned up is mostly crime fiction. Please note that I have not conducted anything remotely like a thorough examination of the database. These are examples, not an exhaustive list.

An anthology of crime stories, Anthologie du mystère 89, edited by Jacques Baudou, turns out, when its contents
are investigated, to contain a story by British detective story writer Patricia Moyes, along with several Americans: Sue Grafton, Joe Gores, George Baxt, Lawrence Block, Jack Ritchie, Loren D. Estleman. The contents of the book cannot be gathered from the ReLIRE database, nor even from the BnF catalogue, to which it is linked. I found a partial list on the site of a secondhand book dealer. There is also a volume with the same editor called Mystères 88 : les dernières nouvelles du crime. Again, there is no indication of the contents on ReLIRE or the BnF catalogue. According to a site on the web it contains stories by P. D. James and best-selling Japanese author Shizuko Natsuki, among others.

A book called La Griffe du passé by ‘Rachelle Swift’ is, as the BnF catalogue notes, a translation of a novel in English entitled A Taunt from the Past. A search on the web identifies ‘Rachelle Swift’ as a pseudonym of Jean Barbara Lumsden (1916–1998), a New Zealand author.

There are two works by the American mystery writer Mabel Seeley (1903–1991): D’Autres chats à fouetter (The Listening House) and Il siffle dans l’ombre (The Whistling Shadow). There is no note in the catalogue identifying them as translations. Amazon.fr identifies the translator of both books as Edwige Champoury.

Pour tout l’or du Mali by John Wyllie is a crime novel by a Canadian author. It was translated from English by Jean-Luc Estèbe. There is no note in the BnF catalogue identifying the work as a translation, or Wyllie (b. 1914) as Canadian.

I also found more sci-fi/fantasy works: a book by US author Frank Belknap Long (1903–1994), under the title Le Gnome rouge, and a werewolf anthology containing stories by Suzy McKee Charnas and Brad Strickland.

Publishers taking advantage

It appears that 10,000 (one in six) of the books in the database have been opted in by the publishers. The ReLIRE website FAQ outlines what a publisher will get out of the arrangement:

‘You will have the possibility of having an exclusive publishing licence for 10 years, implicitly renewable, to exploit the book in digital form, without having to sign a contract with the author or the author’s successors in title for the digital rights.

Sofia [the collecting society] will contact the authors or the successors in title to pay them, in accordance with the terms set out in the publishing contracts.’

[ … vous aurez la possibilité d’avoir une autorisation d’exploitation exclusive de 10 ans, tacitement renouvelable, pour exploiter le livre sous forme numérique, sans avoir à signer un contrat numérique avec l’auteur ou les ayants droit de l’auteur.

La Sofia contactera les auteurs ou les ayants droit des auteurs pour les rémunérer, selon les modalités décrites dans les contrats d’exploitation.]

Two points that the FAQ discreetly avoids spelling out are:

1. The legislation specifically charges the collecting society with developing contractual relationships that will ensure the greatest possible availability of the works. [‘… développer des relations contractuelles permettant d’assurer la plus grande disponibilité possible des oeuvres’: Code de la propriété intellectuelle, Article L134-3, III.7]

This puts prospective publishers in a very strong negotiating position and more or less guarantees that the contracts agreed will be bargain-basement deals with very low royalty rates, regardless of the market value of the work.

2. Certain administration costs that in a normal publishing arrangement would be borne by the publisher will instead be borne by the collecting society, which will take them out of royalties (so all or part of them will be taken from the authors’ share of any income). These include the cost of contacting authors and estates.

A rip-off deal for authors

By contrast, authors are promised simply this: there will be a prospect of their works being made commercially available in digital form, and they will be remunerated by the collecting society. As to the extent of the remuneration, all that is promised is this: that the amount received by the authors cannot be less than the amount received by the publisher.

This is vague to the point of being misleading. The ‘publisher’ who is meant here is not the publisher who undertakes to issue the work in digital form: this is not a profit-sharing deal. The publisher in question is apparently the publisher of the print edition, who under this scheme, if it passes up the chance to bring out a digital edition itself, is due to be paid a share of the royalties negotiated by the collecting society. [See this paper, III.6.]

No assurances at all have been offered about the royalty rates, and that is a much more important issue. As I said in the previous section, it is likely that the collecting society will be compelled to strike bargain-basement deals only. It will also skim the royalty payments to cover its operating costs.

Altogether, there are far more satisfactory ways for an author to arrange to reissue a book in digital form.

Searching on the database

The ReLIRE database and the associated entries in the BnF catalogue have many defects:

• The real names of pseudonymous authors are sometimes not identified.
• In the case of anthologies and similar multi-author works, the BnF catalogue usually lacks even a partial list of contributing authors.
• The English title of a book has not always been entered, nor has the name of the translator.
• Some of the books in the ReLIRE database were published after the cut-off date.
• Some of books in the database are commercially available in printed and/or digital form.
• There are many spelling errors.

Here are a few advisable precautions:

• Search on pen names as well as real names.
• In the case of multi-author works, search on the French title of the book.
• Check up on books published since the start of 2001, as well as books published earlier.
• Check up on books that are still in print, or commercially available in digital form.
• Run extra checks to compensate for possible spelling errors.
• Keep your searches as simple as possible.

Search functions

The ReLIRE database has two search functions, basic and advanced. A text box for the basic search is available at the top of most or all of the web pages on the site. It appears to run a free text search, not only on the records in the ReLIRE database itself but also on the corresponding records in the catalogue of the Bibliothèque nationale de France (BnF), which contain more detailed information about each book.

The advanced search is linked from the results page and from each individual record. It allows for a search on certain data fields, singly or in combination:

• Titre (Title)
• Auteur (Author)
• Éditeur (Publisher)
• Date d’édition (Date of publication)

Search tips

The advanced search page offers some search tips in the side panels. Here is a translation (pdf).

There is more advice on searching in a very useful web page by author and former publisher Léa Silhol.

I have found that Boolean searches (using AND, OR, NOT operators) and proximity searches (using, for instance, NEAR) don’t appear to work. Nor does the ? wildcard.

The free-text search doesn’t run on the associated author records in the BnF catalogue (which are linked from the records for each book). There is no point in searching, for instance, under “Nationalité(s) : Grande-Bretagne”, or anything similar.

Applying to have a work removed

Léa Silhol covers this process in considerable detail.

Here is a translation of the key page on the ReLIRE website (pdf).

Protest this illegal imposition

Whether or not you find that any of the books on the list are by you, or contain works by you, make a complaint to your government about the ReLIRE project, and talk to any author societies to which you belong.

The Berne Convention says: ‘Authors of literary and artistic works protected by this Convention shall have the exclusive right of authorizing the reproduction of these works, in any manner or form.’ (9.1) This can only be overriden ‘in certain special cases’ and ‘provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author’. (9.2) The Convention says of all the rights that are guaranteed under it: ‘The enjoyment and the exercise of these rights shall not be subject to any formality‘. (5.2)

By compelling foreign authors, in order to prevent their works’ being co-opted into collective management, to search for them on a database and request their removal, the French government has imposed an illegal formality on their exclusive exercise of the right of reproduction.

The ReLIRE scheme is in no sense a ‘special case’ within the meaning of Article 9.2. By intervening in such an outrageous manner in the fast-developing market for digital rights it interferes with the normal exploitation of the works and most unreasonably prejudices the legitimate interests of the authors.

Links (all in English)

Advice note from the Society of Authors: The ReLire Project – a note to members

Translations of key pages on the ReLIRE website:

• Translation of ReLIRE home page (pdf)
• Translation of Your Rights page (pdf)
• Translation of Search page (pdf)
• Update: Translation of extracts from FAQ page (pdf)

Survival Guide and other useful pages by Léa Silhol:

• A Survival Guide: Pardon my French, for non-French fluent foreign artists dueling the ReLIRE system
• FAQ: Some (advanced) Questions/Answers about the
  ReLIRE opt out system
• Current action (with links)
• Scoop.it page of relevant links wholly or partly in English

Posts by ‘Laura’ on The Well-Prepared Mind blog:

• Legalized Copyright Theft Begins In France: Government Prepares To Dispossess Writers Using Public Funds
• Harlan Ellison, Ursula K. Le Guin Among Award-Winning Writers On French “Copyright Theft” List
• Reactions To Rollout Of France’s Book Digitization Project
• Anthologies Of Authors In Translation Pulled From ReLIRE

Update

Pages by Julie Mornelli on penseeslibres.com:

• Acts of Piracy: how the French could be stealing your author rights with ReLire
• English Translation of the ReLire Project page [French: Le projet ReLIRE: le cadre légal]

Julie Mornelli is also hosting a list of the initial contents of the ReLIRE database. [In Open Office spreadsheet format, but will open in Microsoft Excel; file zipped, 6.2 mb]

You may find this easier to use than the search facilities offered by the ReLIRE database, though the author names are alphabetized by the first names, so global free text searches are still necessary. It is interesting to see what has already been silently pulled from the database: two translations of novels by the German novelist Ernst Wiechert, for instance.

The New French Legislation: Further Points

This is a follow-up to my post France Guillotines Copyright, about the new French law which has curtailed authors’ rights to out-of-print twentieth-century books.

Journalist Delfeil de Ton, writing in Le Nouvel Observateur, describes the law as A magnificent con trick ('Truanderie magnifique'). He blames it on the Union pour un Mouvement Populaire (UMP), the party of Nicolas Sarkozy. The promoters of the law secured the agreement of all the French political parties, but in both houses of the French Parliament the bill was introduced by members of the UMP. French travel writer Patrice Favaro also blames the UMP for the law. He notes that France is in an election year. (Sarkozy is up for election next month, and elections for the National Assembly will be held in June.) Favaro calls for authors to mobilise and use the election to make their views heard.

French science fiction author Lucie Chenu has delivered an incisive response to some of the points made by the Société des Gens de Lettres (SGDL) in their response to critics of the new legislation. She notes that some of the statements made in the SGDL paper are incorrect and do not reflect the law as enacted. These errors are serious. For example, the SGDL claim that if an author has recovered the print publication rights to a book he/she will keep 100% of the royalties arising from its exploitation by the collective management organisation if he/she leaves the book within the scheme. ('Si l'auteur a récupéré ses droits pour l'exploitation « papier » il récupère 100% des droits d'auteur issus de l'exploitation de l'ouvrage par la société de gestion collective, s'il choisit de rester dans le dispositif.') But as Lucie Chenu points out, there is absolutely nothing in the law to say this. The law says that the share of this money received by the author must not be less than the share received by the publisher. ('Le montant des sommes perçues par le ou les auteurs du livre ne peut être inférieur au montant des sommes perçues par l'éditeur'.) Nothing else. The long and the short of the matter is that the various assurances and explanations offered by the SGDL are not to be relied on, since they cannot even get the letter of the law straight.

Lucie Chenu is one of the originators of the petition of French authors against the law, mentioned in my previous post. In a comment on a blog post about the law on the Science Fiction and Fantasy Writers of America website she says that foreign authors are welcome to sign it and to leave a comment. The petition is entitled Le droit d'auteur doit rester inaliénable (The right of the author must remain inalienable).

Another of the authors behind the petition, Yal Ayerdhal, is reported on the French news website News89 as saying that the arrival of the previously unavailable works under the new law 'will destabilize the book market and small publishing businesses are going to find themselves overwhelmed by the big ones'. ('L'arrivée des livres indisponibles va déstabiliser le marché du livre et le travail des petits éditeurs va se retrouver noyé par celui des gros.')

Ayerdhal also notes that Amazon offers authors who contract with it to publish their own books royalties of 70% on a price that the authors set themselves.

News89 reports that the digitisation of the books is to be funded by a government loan. Some information about this may be found in the secret agreement that was signed last year by the SGDL, the French publishers' organisation (Syndicat National de l'Édition), the Bibliothèque nationale de France (National Library of France) and the Minister of Culture. This agreement specifies that before any money is paid out to authors and other rights holders by the collective management company that operates the scheme, the capital invested is to be paid back, as are the expenses of operating the scheme. ('Les produits de l'exploitation des livres, une fois prélevés les montants affectés aux frais de gestion et à la rémunération des capitaux investis, reviendront équitablement aux ayants droit via la société de gestion collective.')

In a standard publishing contract the author is paid an advance against royalties, and if the book earns out its advance, royalties are paid as a percentage of the price for which the book retails. The publishing company expects to repay its investment out of its share of the retail price. Under the new French scheme, the initial investment in digitising the books is to be recouped before the authors see a penny. If they ever do…

Then there are the expenses of operating the scheme. One of the reasons why any form of collective scheme for managing primary publishing rights is bound to offer a poor prospect for authors is that the authors will only be paid out of the money that remains once the publishers' share has been sliced off and the collective management organisation has awarded itself whatever it has run up by way of operating costs. These operating costs, it may be noted, will include expenses that would normally be absorbed by the publishers, such as the costs of contacting authors and estates and administering individual author accounts.

Under this particular scheme the responsibilities of the cmo will also include settling any disputes over the ownership of digital rights, and since the law, in defiance of a basic principle of the French Intellectual Property Code, has placed the burden of proof on the author, it is likely that disputes will be plentiful.

Further information: web pages in English

An excellent summary by Victoria Strauss: New French Law Seizes Digital Rights on the website of the Science Fiction and Fantasy Writers of America; also on the Writer Beware blog.

France Chooses Profit For Publishers Over Authors' Rights And Public Libraries

Further information: web pages in French

Oeuvres indisponibles : les assurances du ministère, un miroir aux alouettes – Lucie Chenu in Actualitté

Numérisation des livres qu'on n'édite plus: qui y gagne? – Aurélie Champagne in Rue89

Truanderie magnifique – Delfeil de Ton in Le Nouvel Observateur

Cette loi bouleverse le système du droit d'auteur dans ses principes – Benoit Huret, advocate

Loi relative à l'exploitation numérique des livres indisponibles – Philippe Schmitt, advocate

(For more links, see my previous post.)

France Guillotines Copyright

Last Thursday (23rd February) the French Parliament ratified a law 'relating to the digitization of commercially unavailable books of the twentieth-century'.
[Loi relative à l'exploitation numérique des livres indisponibles du XXe siècle].

A petition against the law, signed by many French authors and illustrators, asserts that it 'does nothing other than institute an official and general piracy of literary works of the twentieth century in the form of an unprecedented infringement of the right to property' ('cette loi … ne fait qu'instituer un piratage officiel et général des oeuvres littéraires du XXe siècle sous la forme d'une atteinte sans précédent au droit de propriété').

The law has been promoted by its supporters as a means to enable public access to literary works of the twentieth century that are still under copyright but no longer commercially available. ['The objective of the act [consists] in allowing the public to access works that are currently unavailable' ('l'objectif de la loi consistant à permettre au public d'accéder aux oeuvres actuellement indisponibles') – Senator Jacques Legendre, introducing the bill in the French Senate, 21 October 2011]

When the detail of the Act is studied, it becomes clear that what it has actually effected is a transfer of rights on a vast scale from authors and literary estates to publishers.

More on this below. First, since there is still only very limited information in English about the details of the new French law, here is a summary of the main points as as I understand them.

Note: what follows is not a direct translation but a paraphrased summary. It is offered with no guarantees. I am not a lawyer, nor am I a professional translator of French legal and business documents. I am open to correction from anyone better qualified than I to interpret this document and its context.

'Loi relative à l'exploitation numérique des livres indisponibles du XXe siècle': summary

The Bibliothèque Nationale de France (equivalent of the British Library) is to compile a freely accessible online database of all works published in France before 1 January 2001 that are not being commercially distributed by a publisher and are not currently published in print or digital form.

Anyone who discovers that a book in this category has been left out of the database may apply to have it added.

A book's being registered in the database does not prejudice the application of articles L. 132 12 and L. 132 17 [of the French Intellectual Property Code]. [I think this means that the legal test of whether a book is available will continue to be the principles set out in the articles cited (see the text behind the link for details)].

Once a book has been listed in the database for more than six months, the right to authorize its reproduction and display in digital form ('sa reproduction et sa représentation sous une forme numérique') will be transferred to a collective management organisation (hereafter abbreviated to cmo) approved by the Minister of Culture.

Approved cmos must represent both authors and publishers, and authors and publishers will be equally represented on the governing bodies.

These cmos will have legal powers to take action in defence of the rights assigned to them. They will be responsible for the equitable distribution of the sums they collect to the rights holders. The amount paid to the author[s] of a book must not be less than the amount paid to the publisher. The cmos will be obliged to make an effort to find and pay as many rights holders as possible, and to negotiate as many publishing contracts for these works as possible with the aim of making them available. They are also charged with protecting the 'legitimate interests' of the rights holders who are not parties to the publishing contract.

The author of a commercially unavailable book or the publisher who has publishing rights to a print edition may object to the transfer to the cmo of the right to authorize its reproduction and display in digital form. Such an objection must be made in writing and sent to the cmo within six months after the book has been included in the database. Any such objection is to be recorded in the database.

Once the six months is past, the author may still arrange to have the book removed from the control of the cmo if he judges its reproduction or display to be prejudicial to his honour or reputation. No compensation will be paid in such cases.

A publisher who puts in an objection to a book's passing into the control of the cmo must bring out an edition within two years and prove to the cmo that he has done this. If he defaults the objection is to be deleted from the database and the right of authorizing publication in digital form will be exercised by the cmo.

If no objection is raised by author or publisher within six months of the work's being registered in the database, the cmo will offer to a publisher who has the rights to reproduce the book in printed form a licence to reproduce and display it in digital form. The offer is to be made in writing. It will be considered to have been declined if the publisher fails to reply in writing within two months. The licence is to be issued on an exclusive basis for a period of ten years, implicitly ('tacitement') renewable. The publisher's acceptance of the offer is to be registered in the database.

The author can oppose this by bringing proof that the publisher does not have the right to publish the book in printed form. Otherwise the publisher has three years to bring out a digital edition of the book and prove to the cmo that he has done this.

If the publisher does not take up the offer, or fails to bring out a digital edition within the time specified, the cmo is empowered, in return for payment, to issue a non-exclusive licence for the publication of the work in digital form for five years, renewable.

Anyone granted a licence to publish a work under these conditions will be subject to the law on ebook pricing of 26 May 2011 [under which the price of digital editions must be fixed by the publisher, with no discounting permitted].

The author and the publisher who holds the right to publish the work in printed form may at any time jointly notify the cmo of their decision to withdraw from it the right to authorize its publication in digital form. In such a case the publisher then has eighteen months to bring out a digital edition and prove to the cmo that he has done this.

The author of a commercially unavailable book, acting alone, may at any time withdraw from the cmo the right to authorize its publication in digital form if he is able to prove to the cmo that he is the sole holder of the rights defined in article L. 134-3. [The rights mentioned in article L. 134-3 are the rights to authorise a book's reproduction and representation in a digital form.]

The cmo must inform all users to whom it has granted a licence to exploit the book of these decisions. The holders of the rights cannot oppose the continued exploitation of the book under an arrangement that has been entered into before they notified the cmo, up to a maximum duration of five years, on a non-exclusive basis.

Regulations governing aspects of these measures are to be specified in a decree in the Council of State.

The law anticipates that there will be some books for which no one will be found who has the right to reproduce them in printed form. After ten years, the cmo shall authorise libraries that are open to the public to reproduce and distribute any such books in their collections free of charge, unless there is a reason to refuse this. This is subject to the requirement that the institution that benefits from this provision shall not seek to obtain any economic or commercial advantage from it.

Anyone who holds the right to reproduce the book in printed form may obtain at any time from the CMO the immediate withdrawal of this free licence.

In the case of the sums of money that the cmos are unable to distribute because they cannot find the recipients, after ten years they shall devote them to projects for assisting creativity, for teaching authors to write, and for organising public readings, to be implemented by the libraries. The sums involved and the purposes to which they have been put shall be the subject of an annual report from the cmos to the Minister of Culture.

The organisations representing authors, publishers, booksellers and printers shall engage to consult on the economic and legal questions relating to the printing of books on demand.

The law is to come into force at latest six months after the act is enacted.

*****

The law has nothing to say about the rights of illustrators.

No account is taken of edited collections by multiple authors.

Nothing is said in this law about translated works, or how foreign authors, in particular, may safeguard their rights.

*****

Any author who has had work, or translations of their work, published in France in book form prior to the cut-off date (1 January 2001) would be well advised to consult their agent, or authors' organization, or a suitably qualified lawyer. The timescale for getting a handle on all this is not very long.

****

As may be seen from the above, what this legislation has achieved is to hand the publisher of the print edition the digital rights to any out-of-print twentieth-century French book that they think might make them money in a digital edition. These are, of course, rights that almost invariably belong to the author/estate.

Commentators have noted that the six months window within which authors can claim their books and have them removed from the database is extremely narrow; also, of course, authors will receive no warning at the point their book is listed. The system might as well have been calculated to cause anxiety, time-wasting and error on the part of the authors.

Update

[2 March]

authors will receive no warning at the point their book is listed – The Société des Gens de Lettres (SGDL) [French equivalent to the Society of Authors], one of the principal promoters of the Act, has issued a paper that clarifies some aspects of this legislation and offers certain reassurances. The SGDL is promising that publishers and authors' organisations will have an obligation to notify the affected authors. The society seems to be implying that this will be laid down in the regulations that will govern the operation of the scheme. [See SGDL paper, answers to questions, no. 5.] French authors' organisations, however, are hardly going to be in a position to alert foreign authors. (And it may be noted that they are taking upon themselves a very considerable burden in undertaking to monitor the register on behalf of their own membership.) Obvious questions of liability arise: what if a publisher is negligent and fails to make a proper effort to contact the author within the short window of time available? And what will be the position if a translated work has been issued under a sublicence from a foreign publisher rather than as a result of a direct negotiation with the author?

If they miss the six months' window, authors will only be able to resume control of their books if they can prove to the cmo that they are the sole holders of the digital rights to the work. (They had better hope they still have their old contracts and reversion letters on file.) No burden of proof is to be laid on the publisher. This overturns the basic principle of copyright, under which the rights are assumed to remain with the author unless someone else can prove that the rights have been assigned to them or they hold an exclusive licence that has not terminated.

Update

[2 March]

In an interview with Le Nouvel Observateur French copyright lawyer Guillaume Sauvage has commented:

'With the principle of the 'opt-out', the author can extricate [his book] from the database at any point if he succeeds in proving that he is the sole holder of the digital rights. But this is strange: that ought to be the case with regard to 99.9% of the authors who signed contracts in the twentieth century, in a period when no contract mentions digital rights and, at the same time, it seems to me that proof of this will not be easy to present.'

('… Avec le principe de l'«opt out», l'auteur peut sortir de la base de données à tout moment s'il arrive à prouver qu'il est le seul titulaire de ses droits numériques. Mais c'est étrange: cela devrait concerner 99,9% des auteurs qui ont signé des contrats au XXe siècle, à une époque où un aucun contrat ne parle de droits numériques et, à la fois, il me semble que c'est une preuve qu'il ne sera pas facile à rapporter.')

Lawyer and librarian Lionel Maurel has pointed out that this provision goes against the French Intellectual Property Code, which states:

'Authorship shall belong, unless proved otherwise, to the person or persons under whose name the work has been disclosed.' ('La qualité d'auteur appartient, sauf preuve contraire, à celui ou à ceux sous le nom de qui l'oeuvre est divulguée.')

Maurel also thinks that under this legislation it will be difficult in practice for authors to establish ownership of their rights. He points out that even the SGDL sounds dubious about this.

In answer to the question, 'How do I know if I have control of my digital rights?' the SGDL says:

'Only the publishing contract (or an addendum, or a letter from the publisher) can provide certainty. If the digital rights were not explicitly transferred, they remain with the author. … It would be highly advisable to seek advice before any exploitation [of the rights].' [See SGDL paper, answers to questions, no. 3. Note that the passage quoted here is only an extract from a more detailed response to this question, which needs to be studied in full if this matter is important to you.] ('Comment savoir si je dispose de mes droits numériques? Seul le contrat d'édition (ou un avenant, ou un courrier de l'éditeur) peut le garantir. Si les droits numériques n'ont pas été explicitement cédés, ils demeurent à l'auteur. … Il est préférable de demander conseil avant toute exploitation.')

Maurel also comments on the oddity of a collective management society's being appointed sole judge of the validity of the proof of an author's ownership of his/her rights, without recourse to the courts. ('et comment d'ailleurs une société de gestion collective (à savoir des éditeurs SNE et des auteurs SGDL…) pourrait se faire juge à elle seule de la validité de cette preuve, sans recours à un juge? Mystère…')

*****

Payment to the authors will be made through a collective management organisation representing both authors and publishers. Some commentators have pointed out that as the legislation stands, the publisher will be paid twice: first through the receipts for the commercial exploitation of the book, and then a royalty or share of the money that the publishing firm itself pays to the cmo!

Update

[2 March]

Some commentators have pointed out that … the publisher will be paid twice – the SGDL claims that this will not happen; that the publisher will only receive a share of the money distributed through the cmo if the digital edition is issued by the third party. [See SGDL paper, answers to questions, no. 6.] (Nonetheless, this does not seem to be the natural interpretation of the legislation as it stands.)

This is truly a wonderful system for the established French publishing houses.

* It will lock out new digital publishers (including much-feared Amazon, now moving rapidly into publishing).

Update

[2 March]

I have been asked by a correspondent to clarify the point above.

If an author misses the six months' window to reclaim a book then even if he/she subsequently proves ownership of the rights (and that may well be a difficult process), then it will most likely still remain subject to the terms of a contract negotiated by the collecting society. That contract (if exclusive) will then become non-exclusive, but it will still last for up to five years. No new commercial publisher will be interested in contracting with the author to do a reprint edition, then or, probably, later. (Not later, because they will most likely estimate that most of the interest and sales will be over by that time.) Hence the law will have the effect of locking out new specialist digital publishers in favour of the established print publishers. And it will also remove incentives from the established publishers to improve the quality of their digital offerings.

The big, well-established publishers are very very edgy over the digital rights to the older titles in their catalogues. In the US a law suit is currently being fought by HarperCollins over the digital rights to a book, the print version of which the company has been publishing since 1971. The author has taken the digital rights to a specialist digital publisher, founded only a couple of years ago. The new legislation in France makes it much less likely that the established publishers there will have to face this kind of challenge, or that authors will have such an option.

This raises another point about the new legislation. SGDL and the Syndicat National de l'Édition (SNE), the trade association for French publishers, have hailed it in a press release as 'innovative' ('innovant'). It is not. It is profoundly backward-looking and will hinder the development of truly innovative approaches to ebook publishing in France.

* It will almost certainly lock the publishing rights to the affected books into the ownership of the publishers who first issued them until the full term of copyright has expired. The presumption is built into the legislation that the original ten-year licence to publish will normally be renewed automatically. And digital editions do not go 'out of print'.

Update

[2 March]

And digital editions do not go 'out of print'. – If I understand their paper correctly, the SGDL are saying that digital publication under this scheme will not affect the legal tests of a book's availability under the French Intellectual Property Code, and that therefore the rights will revert to the author on exactly the same basis as they would have done anyway. I assume that this is what is meant by the passages in the legislation that refer to articles L. 132 12 and L. 132 17 (see above). [See SGDL paper, the main advantages for the author, no. 1; the obligations of the publisher, no. 1 .]

This said, the new legislation will still tend to lock the digital publishing rights to the affected books into the ownership of the publishers who first issued them in print, because it will hinder the development of alternative publishing channels (see the previous point, and the next).

* It will prevent authors from bypassing the publishers and bringing out self-published digital editions of their older books. This is beginning to happen on a wide scale in the United States and it has begun to happen in France too.

Update

[2 March]

Unless authors move quickly to claim their rights, they will only have the option of a non-exclusive publication, as noted above.

Furthermore, if large numbers of authors decide that they would rather take the collecting society’s crumbs than go through the effort (and it is not inconsiderable if you do it properly) of preparing and issuing their own reprint e-editions, it may well prevent, at best stunt, the development of the intermediary services that format self-published digital editions and distribute them to the main webstores. (The best known of these services at present is Smashwords, which operates in the US.) This will undermine, even destroy, that entire distribution channel for self-published books, and entrench the existing companies in their control of the French publishing industry.

Once again, this legislation is much more likely to hinder innovation than promote it.

* It will prevent authors from issuing free digital editions under Creative Commons licences or otherwise.

Update

[2 March]

Again, I have been asked to clarify this.

This law takes no account of any existing cases where authors are freely distributing copies of their out-of-print books on the web. It will catch all books published before 1 Jan 2001 that are not being commercially distributed by a publisher.

As one commentator speculates, 'One may wonder whether an author who decides to distribute his own out-of-commerce book formerly published in the 20th century runs the risk of being sued for infringement, incurring a penalty of 3 years in jail and a 300,000 euros fine.'

* Administration will be in large part outsourced to the cmo, to be funded by skimming the royalty payments. There will be no need for the publishers to negotiate individual contracts or deal with authors individually.

Update

[2 March]

And here is a further point: the cmos are specifically charged by the legislation with negotiating as many publishing deals as possible. This puts the publishers in an immensely strong bargaining position. It's a recipe for bargain-basement contracts with very low royalty rates. This may push the price of digital editions down (it may not; the publishers may decide to keep them artificially high). It will certainly drive down the payments made to authors, and may tend to depress e-book royalties in general. This is not a healthy situation. Note that it will have been reached not through the operations of the market but as a result of a badly drafted and inequitable law.

*****

There will be a price to pay for all this, of course: a cultural and political price. French authors are already showing that they are not prepared to accept this law meekly. I do not know whether publishers or politicians have thought through the consequences of outraging very large numbers of authors.

*****

Further information: web pages in English

The French Senate proposes to legalize piracy of the French 20th century printed heritage – Bernard Lang et al, for AFUL, Adullact and FFII France

How The Google Book Settlement Becomes Law – Sylvie Fodor, CEPIC blog

Addenda

[2 March]

Torch-and-Pitchfork Party at Bibliothèque Nationale – US copyright lawyer C. E. Petit, Scrivener’s Error

Has France Just Made the Ultimate Copyright Faux Pas Fomented with a Forbidden Formality? – Canadian copyright lawyer Howard Knopf, Excess Copyright

A selection of web pages in French

Cinq choses à savoir sur la numérisation des oeuvres indisponibles – Guillaume Sbalchiero, L'Express

Oeuvres indisponibles : 'Une première en Europe' | Numérisation des oeuvres indisponibles : une loi monstrueuse | Numérisation des oeuvres indisponibles : auteurs spoliés, droit bafoué… | Exclusif : L'accord-cadre sur la numérisation des oeuvres indisponibles – Nicolas Gary, Actuallité [The last of these articles reveals the details of the secret agreement between the government, the publishers and the leadership of the Société des Gens de Lettres, the society of French authors.]

Le droit d'auteur doit rester inaliénable – Génération Science-Fiction

Loi sur les oeuvres indisponibles : une sinistre mascarade – Bernard Lang, AFUL, FFII

Proposition de loi relative á l'exploitation numérique des livres indisponibles du Xxème siècle – Isabelle Sivan, advocate

Numérisation : la grande manoeuvre des indisporphelines – Lionel Maurel, lawyer and librarian

Les bibliothèques autorisées á diffuser sous forme numérique les livres du XXème siècle indisponibles dans les librairies – H. Girard, La Gazette

France-Où en est-on avec la proposition de loi relative à l'exploitation des livres indisponibles? | France-Importante modification dans l'exploitation numérique des livres indisponibles | France-Analyse du texte définitif (?) de la loi relative á l'exploitation des livres indisponibles – Axel Beelen, Belgium; lawyer employed by a collecting society

Proposition de loi sur la numérisation des ouvrages indisponibles du XXè siècle – Didier Frochot, les-infostrateges.com

Pourquoi la loi sur les 'livres indisponibles' devrait indigner les auteurs – Guillaume Champeau, Numerama

Addenda

[2 March]

Numérisation des oeuvres indisponibles: «Cette nouvelle loi est une usine à gaz» – Le Nouvel Observateur, interview with French copyright lawyer Guillaume Sauvage

Petit guide de survie juridique à l'usage des auteurs d'oeuvres indisponibles – Lionel Maurel, lawyer and librarian

Hargreaves Review: Extended Collective Licensing and Orphan Works

This is the third (and most important) of a series of posts on the Hargreaves Review into copyright. See also:

1. Hargreaves Review: Fair Use and Fair Dealing

2. Hargreaves Review: Proposals for a Digital Copyright Exchange

All non-specific references are to the main report document, Digital Opportunity. A Review of Intellectual Property and Growth [PDF].

References preceded by Econ. Impact are to Supporting Document EE. Economic Impact of Recommendations [PDF].

Extended Collective Licensing and Orphan Works

Ian Hargreaves calls for legislation to permit ‘Extended Collective Licensing’ (ECL) for mass digitisation, that is, digitising whole collections of copyright works without the authorisation of the rights-holders. Instead, it would be up to the rights-holders to opt out of the scheme. [4.48–4.51] This would catch orphan works (works with unlocated copyright holders) but would also net works in a very much larger category, works whose rights-holders are fully traceable but have not taken the steps required to register an opt-out (very probably through ignorance of the scheme’s operation). As Hargreaves outlines his proposals for what he calls an ‘orphan works solution’, this latter category of work, those whose rights-owners have not registered to opt out of an ECL scheme, slides in and out of the category ‘orphan’ without notice. [4.52–4.60]

The only reference to ECL in the Executive Summary to the Hargreaves Report is in relation to orphan works. The recommendation that ECL should also be imposed in respect of works with known or traceable copyright holders is buried in the middle of the text and is not signalled anywhere in the summaries. As an effect of this, the proposal to institute it for works whose copyright holders are known or traceable passed largely unnoticed in the initial public commentary in blogs and the press, much of which focused mainly or wholly on the Executive Summary.

Hargreaves defines orphan works, conventionally enough, as ‘works to which access is effectively barred because the copyright holder cannot be traced’. [4.52] But in his proposals ‘orphan’ very often means simply ‘a work that has not been opted out of an ECL scheme’. What is being presented overtly as a solution to a cultural problem, the existence of works whose copyright owners cannot be traced, is actually a set of proposals designed to override the basic principles of copyright and the standard procedures for rights clearance. The object of this is to facilitate mass-digitisation programmes. All of this is explicit in the report and the supporting document Economic Impact of Recommendations. Hargreaves’ proposals, if implemented, would also introduce a de facto system of copyright registration; this is fudged in his report, but is an inescapable concomitant of the opt-out requirement.

In addition, the supporting document Economic Impact of Recommendations, which was produced by the IP Review Team at the Intellectual Property Office (IPO), makes it competely clear that these mass-digitisation programmes would include schemes run for profit by commercial entities. This is another important point that is fudged in the main report. Furthermore, the document produced by the IPO team is explicit about the fact that the mass-digitisation of public libraries and archives, which is presented as a benefit of the scheme, would be done with a view to sublicensing the materials to commercial entities (who, in many if not all cases, would probably also carry out the digitisation). The IPO team cites the example of the licensing of public census information to commercial genealogical services. [Econ. Impact p. 23] Census data is Crown Copyright; the National Archives is the Crown’s agent for managing its copyrights and is fully entitled to enter into arrangements for their commercial exploitation. For the most part, however, the rights to the works in libraries and archives are not owned or controlled by those institutions. As far as older, out of print books are concerned, the digital rights generally belong to the author or literary estate, unless the rights were assigned in full to the print publisher. These rights should be available to the authors to exploit or not, as they choose. But in sectors where an ECL scheme is imposed, authors will lose the right to control the use of their works unless they take the steps required for them to opt out. Otherwise their works may be used commercially without their authorisation. They may also be used in ways that are distasteful to the author, damage his or her reputation, or injure the future market for the work. What is currently being proposed is the mass appropriation of private intellectual property, much of it belonging to the original creators, and its licensing to commercial corporations, with archives and libraries that hold copies of the originals receiving inducements to participate.

ECL and book digitisation

Authors, agents and the executors of literary estates need to be fully alert to what is contained in the Hargreaves report. As a model for his ECL proposals, Hargreaves cites a project currently running in Norway for the mass-digitising of books in the Norwegian National Library. The Google Book Settlement agreement, recently rejected by the US courts, would have set up a scheme with many similarities to ECL. Meanwhile, the EC is planning to bring in ECL ‘to allow large-scale digitisation’ of what they term ‘out-of-commerce books’. In France a <a href="”>framework agreement for such a project has already been signed. Books are very much in the sights of the institutions and commercial enterprises pressing for the legitimation of mass-licensing programmes.

Hargreaves says that ECL ‘should not be imposed on a sector as a compulsory measure where there is no call for it’. [4.51] But this is ambiguous. Does he mean that it should only be brought in if there is a request for it from the creators who work in that sector, or does he mean it should be introduced if there is a demand from content-aggregators who wish to digitise works without clearing the rights? Clarification on this point was sought through the Review blog but has not been forthcoming. [See Review Blog, 18/5/2011 [PDF], p. 9]

Hargreaves’ proposals are closely similar to Clause 43 of the Digital Economy Bill, which was struck from the Bill at the last minute on the insistence of the parties that have since formed the coalition government. This was mainly due to the hard work of a number of photographers who pointed out the flaws in the legislation.

Slippery definition of orphan

Hargreaves calls for legislation to enable ECL for ‘mass licensing of orphan works’ and establish a procedure for clearing rights in individual works. In the Executive Summary he says that ‘a work should only be treated as an orphan if it cannot be found by search of the databases involved in the proposed Digital Copyright Exchange’. [p. 8] This implies that the sole or main determinant of orphan status would be the failure to register a work with the Digital Copyright Exchange. In a couple of other places, however, he talks as though checking with the projected Exchange would only be one of the requirements (though an important one) in a more extensive ‘diligent search’ process that would necessary before a work could be treated as an orphan. [4.34, 4.56].

In the context of the continuing debates over orphan works legislation, a ‘diligent search’ is understood to be a careful search of the available sources of information, made in good faith, to try and trace the rightsholder. The phrase is found, among other places, in Clause 43 of the Digital Economy Bill, which specifies that a search must be made of sources that include, but are not limited to, ‘licensing bodies; associations of publishers or authors; systems for identifying works of the type concerned; published library catalogues and indexes; public databases, including public records that may indicate successors in title’. (This clause was not enacted.) [Digital Economy Bill [PDF], p. 54] But this is not what Hargreaves means by a ‘diligent search’. Outlining his proposals for mass licensing he says, revealingly: ‘A scheme should involve a diligent search of rights registries (to ensure the supposed orphans are not in fact owned and opted out of the collective licensing scheme).’ Here it is transparent that the purpose of such a search would be to find out whether a work had been opted out, and nothing more. [4.56]

Under Hargreaves’ proposals, anything not specifically opted out of the ECL scheme is to be treated as an orphan for the purposes of mass licensing, regardless of whether its owner is traceable. This would circumvent any need for a proper ‘diligent search’; which is, of course, the whole point. The phrase ‘diligent search’ has been hollowed of meaning, and the category ‘orphan’ extended beyond anything that is usually understood by that term. In this context the reference to ‘rights registries’ in the plural is anomalous, since if the only data that matters is the record of whether or not the owner has exercised the right to opt out, there is no obvious reason why that data should be scattered through different registries. And indeed Hargreaves continues: ‘Such searches would be made much easier once the Digital Copyright Exchange proposed in this review is functioning.’ [4.56] Here and elsewhere, the clear implication is that one of the key functions of the projected Exchange would be to hold a record of opt-outs. And as Hargreaves says, ‘Tying the orphan works solution into the Digital Copyright Exchange … should provide rights holders with a further incentive to join the scheme.’ [4.59] A few pages earlier he has laid down that participation in the Copyright Exchange should be ‘genuinely voluntary’, but plainly this is another phrase that does not mean what one might normally expect. [4.34]

If a check of the relevant registry shows that the work has not been opted out of the ECL scheme, a licence will be issued on payment of a small fee. This will be held by the collecting society running the scheme, pending the possible appearance of the owner. After ‘a reasonable period of time’, any unclaimed fees are to be used for ‘social or cultural purposes’, or to fund the running costs of the Digital Copyright Exchange. [4.56, 4.58]

The procedure for licensing individual works might be ‘similar’ (this is ominous); alternatively, it might involve what Hargreaves calls ‘a more tailored approach’. In this case, following a ‘diligent search’ for the copyright owner (no form for which is prescribed), the Government would authorise a licensee ‘to deal in a specific work’. If the owner comes forward later, ‘future use of the work from that point would be subject to negotiation, but there would be no liability for past use beyond any licence fee set by Government or its appointed agent.’ [4.57] This seems to leave open the possibility that no fee might be set, but perhaps that is just bad writing. It also throws into relief the fact that the section on mass licensing procedures is silent on the scope for renegotiating use, should an owner emerge to claim the work.

Whose interest

Hargreaves expressly recommends that works should be licensed for what he calls ‘nominal’ fees, so that any sums that might be recovered by the rights-owners after the event would be extremely small. He remarks that ‘some rights holders’ will ‘fear that a growing resource of almost free to use orphan works could injure markets for other works’, but says that the ‘perceived risk’ is outweighed by ‘wider economic interest’. [4.58; compare Econ. Impact p. 23]

Whose interest? In Supporting Document EE. Economic Impact of Recommendations the IPO Team states: ‘The organisations likely to be most affected by the orphan works problem are those wishing to undertake digitisation projects to make works available through newer channels. An orphan works system would save these content holders the initial rights clearing costs for digitizing their collections.’ [Econ. Impact p. 22] This is rather a give-away. The purpose of orphan works legislation as ordinarily understood is to make it possible to put works with unlocated copyright holders back in circulation. It is not supposed to be a device for circumventing the normal process of rights clearance. What is being talked about here is not, in truth, a proposal aimed simply at solving a perceived orphan works problem. If it were, there would be a ‘diligent search’ requirement, and there would, in consequence, be costs involved. What is being proposed under the name of an ‘orphan works system’ is actually a system for imposing ECL schemes, and the whole object of this is to slash costs to licensees by removing the requirement to clear rights.

In the main report, Hargreaves is explicit about the fact that the purpose of ECL is to keep to a minimum the transaction costs involved in obtaining permissions. [4.49] Actually what it would do is transfer the the transaction costs from the licensees (typically well-resourced national institutions and commercial companies) to the licensors (frequently inadequately-paid, hard-worked creators), who have to find out that such schemes are being instituted and take steps to opt out or claim their share of any revenues that may be paid.

Who are the organisations who would be expected to benefit? Hargreaves mentions ‘national libraries, the BBC archive and private collections’. [4.48] The IPO team mentions the British Library and the BBC. But the IPO document is completely open, as the main report is not, about the fact that a key aim of the proposed legislation would be the possible creation of ‘new businesses around content rich services’. This is where they see the ‘higher long term benefits’: in ‘the services which can be created around orphan work content’. (Keep in mind that ‘orphan work content’ is a placeholder term for anything not directly claimed and opted out by its owners.) The IPO observes that ‘Because digital technology has radically diminished the costs of reproduction, there is interest in re-using even works which do not have a large likely market, and the most significant remaining obstacle is rights clearance.’ They see services to family historians as a good prospect. They think that if the licensing of census data is good business, then it should be possible to do even better out of ‘the much broader information held in newspapers, public documents, radio, news shows, photographs, music scores and film footage’. [Econ. Impact pp. 22–23]

As has been stated above, Hargreaves argues that ‘in most cases’ the fees charged to licencees should be ‘nominal’. The reason he gives is that to do otherwise would be to ‘impose inappropriate costs, particularly on use of materials which were not created for commercial purposes, or which might be found to be out of copyright if the rights information were available’. [4.58] The notion that although you have not traced the owner of the rights in a work, you can confidently identify the creator’s purpose in producing it is questionable, to say the least; one might call it absurd. Moreover, the market value of any work is not determined by the creator’s original intentions. But if it is proposed that works may be tagged ‘non-commercial’ and licensed at rates that make them ‘almost free to use’, then it should be laid down as a concomitant principle that such works should not be licensed, directly or indirectly, for any commercial purpose.

No attempt to assess impact

As its title suggests, Supporting Document EE. Economic Impact of Recommendations is presented as an assessment of the economic impact of implementing the recommendations in the main report. This being the case, it is remarkable to find that the document makes no mention of the proposal to impose ECL on works whose rights-holders are known or traceable. There is no attempt whatsoever to assess the likely impact . The first recommendation in Hargreaves’ report is that ‘Government should ensure that development of the IP System is driven as far as possible by objective evidence.’ [p. 8] His proposals on ECL fail that test completely, and belie his claim that ‘Throughout the Review, we have sought to base our judgments on economic evidence’. [p. 3]

The IPO team notes that ‘concerns’ about orphan works legislation ‘ have come from specific groups of rights holders … concerned that their content could be intentionally stripped of identifying metadata and the content used without reasonable compensation’. [Econ. Impact p. 23] (This is a particular concern for photographers and graphic artists.) There is no acknowledgement of the widely held concerns that any scheme should incorporate a ‘diligent search’ requirement, and that ‘diligent search’ should mean exactly what it says. Nor of the concerns that there should always be provision for terminating or varying a licence at the request of the rights holder, should one turn up. And though many creators have urged that any orphan works legislation should be accompanied by strengthened moral rights, particularly the author’s right to be identified in any publication, these calls have been totally ignored.

As for the concerns about Extended Collective Licensing: there is a detailed section on this in the submission from Action on Authors’ Rights. [Submission to the Hargreaves Review [PDF], pp. 6–12.] One problem was pointed out above: ECL removes the transaction costs from licensees, but it does not make them disappear; instead they become a burden on the rights-holders. It would be good to see the IPO’s economists analyse the likely costs in lost production and income.

Of very particular concern are proposals to enforce ECL in relation to primary rights. The right to publish a book in printed form is a primary right, and so is the right to publish a book as an e-book. Existing (voluntary) collective licensing schemes in the UK apply to certain secondary rights, such as photo-copying. In such cases, collective licensing suits the convenience of rights-owners, who are relieved from the burden of individually negotiating numerous small payments with multiple parties. By contrast, schemes for mass-digitising printed works in order to issue them to the public impact on the primary rights to those works.

Most freelance authors license their works directly to publishers on an exclusive basis. This system allows the author to make the best agreement he or she can for the exploitation of the work, based on the known or likely demand. It also gives the author control over where the work will appear, and in what form and context, which are matters in which every author has a legitimate interest. It is an efficient, market-driven system. Under collective licensing, by contrast, fees are paid at a flat rate, yet it should be obvious that not all rights are of equal value, even where they pertain to works of a similar kind. It is essential that creators are rewarded in a way that takes into account the demand for their work. ECL would destroy that principle and undermine the (typically modest) incomes of creatively active professional authors.

Under ECL, the rights owner has no necessary knowledge of the licenses issued by the body authorising the scheme. The authorising body, for its part, has no way of knowing what publishing agreements might be in force, or in process of negotiation. If it is imposed in respect of projects (such as book digitisation) that impact on primary rights, ECL will break the system of licensing rights on an exclusive basis and compromise the normal exploitation of published works.

It would be good to see the IPO’s economists factor into their equations the costs of disrupting the existing market in rights.

No protection against derogatory treatment

Under ECL authors’ works would be used in ways of which they had no knowledge and over which they would have no control. This would deprive them of their important moral right to object to a work’s being treated in a derogatory manner: that is, in a way that ‘amounts to distortion or mutilation’, or that in some way prejudices the author’s ‘honour or reputation’. [Copyright, Designs and Patents Act 1988 [PDF], 80.2]

This is a legal right, and as Hargreaves himself acknowledges, it is important. [1.4] He calls it a ‘non-economic’ factor, but a previous report on copyright law, © the way ahead: A Copyright Strategy for the Digital Age (IPO, 2009), was more perceptive, noting that ‘Moral rights can have economic significance, for instance, by protecting reputation’. [© the way ahead [PDF] p. 16, fn27 ] Reputation is of immense economic importance to all individuals and all businesses.

In Supporting Document R. Copyright Licensing Call for Evidence Responses the IP Review Team notes ‘the importance of markets for advertising in proximity to copyright works’. [Supporting Document R [PDF] p.1 ] There are many advertisements on the web for illegal or unsavoury businesses. Posting an author’s work alongside such advertisements could certainly prejudice his or her honour or reputation. (It may be noted that Google is currently in deep trouble in the US for serving advertisements from pharmacies that were operating outside the law. [Thomas Catan and Amir Efrati, ‘Google Near Deal in Drug Ad Crackdown‘, Wall Street Journal, 13 May 2011 ])

Lack of evidence

Hargreaves repeatedly stresses the importance of basing policy firmly on the evidence, and emphasises his own commitment to an ‘evidence-based’ approach. [pp. 1, 3, 8, 10, etc] But although some sections of the main report are larded with references to relevant research, the sections discussing Extended Collective Licensing are almost entirely free of anything of the kind. At one point, it is true, Hargreaves claims ‘There are successful precedents elsewhere in Europe.’ [4.51] He supports this with a footnote referencing an agreement negotiated in Norway between an umbrella organisation representing collecting societies, KOPINOR, and the Norwegian National Library, for making works by Norwegian authors available on the web.

In fact, it is possible to find some useful information about this project. It was launched in May 2009 and is due to be completed this year. The KOPINOR website describes it as a ‘pilot project’. So far no detailed assessment has been published in English online, but the Wall Street Journal published an informative article about it last year. [Max Colchester and Christopher Emsden, ‘In Europe, Book-Scanning Efforts Feel Their Way Into New Territory’, Wall Street Journal, 11 March 2010] It might be said that the Norwegian National Library and KOPINOR have set a ‘successful precedent’ for concluding an ECL agreement for digitising in-copyright books. It is far too soon, and there is too little information available, to claim success for the project, which is, in any case, quite limited. It might be noted that Norway, though ‘in Europe’, is not a member of the European Union (EU).

Though he speaks of ‘precedents’ in the plural, Hargreaves omits to give any other examples. He may be thinking of the framework agreement recently signed in France for digitizing in-copyright, out-of-print books. The law, however, is yet to be changed to permit the scheme to go ahead; it is, again, a ‘successful precedent’ for concluding an agreement, no more. [See also the British Library submission [PDF] to the Hargreaves Review, p. 22 ]

The EC and orphan works

Hargreaves noted that the European Commission (EC) has been ‘considering a limited (and expected to be non-commercial) initiative in the area of orphan works’. [4.60] The EC draft directive on orphan works was published a week after the Hargreaves report. It does, in fact, contain provisions that open up the possibility of the commercial exploitation of orphan works. It stresses the importance of a proper diligent search, which seems to rule out ECL on the automatically opted-in model. At the same time it says in the preamble, ‘This Directive should be without prejudice to existing arrangements in the Member States concerning the management of rights such as extended collective licences.’ [Proposal for a Directive … on certain permitted uses of orphan works [PDF], preamble, section 20 ] If this means what it seems to, we can presumably expect moves in the UK to ram through the proposals for ECL in the Hargreaves Report before the directive comes into force.

ECL schemes are recognised by EU law. The copyright harmonisation directive says ‘This Directive is without prejudice to the arrangements in the Member States concerning the management of rights such as extended collective licences.’ [Directive on the harmonisation of … copyright and related rights, preamble, section 18 ] At the time the Directive was issued the ECL schemes in existence applied to secondary rights (such as photocopying), not to the primary right to authorise the publication of the work.

The EC’s draft orphan works directive states: ‘For reasons of international comity, this Directive should only apply to works that are first published or broadcast in a Member State.’ [Draft Directive, preamble, section 11] The object of this, of course, is to to avoid conflicts with other countries over breaches of international copyright law. In the case of UK published works, what is being proposed may not be sufficient. UK publishers publish works whose authors come from many English-speaking countries. In the case of some of the works by foreign authors it is likely that the UK publication is the first. Moreover, it is not always clear from the information in a book’s prelims whether there has been a prior publication in another country. In the case of an orphan work, however, checking this kind of thing could be part of a diligent search.

ECL and the Berne Convention

An ECL scheme which checks only for opt-outs is another case entirely. In this connection, it is noticeable that nowhere in Hargreaves’ report is there a single mention of the rights and interests of foreign authors published or distributed in the UK, though English is a major world language. Authors from the Indian subcontinent, the USA, the Caribbean, Canada, Ireland, Australia, New Zealand and some African countries write in English and are published or distributed in Britain. Then there are many other works published in English translation.

Unless applied very narrowly and in very limited, specific circumstances, extended collective licensing would place the UK in breach of its obligations under the Berne Convention. The fundamental copyright principle is that ‘authors of literary and artistic works … have the exclusive right of authorizing the reproduction of these works, in any manner or form’. Member nations are only permitted to override this principle in ‘certain special cases’, when there is no conflict with ‘a normal exploitation of the work’ and the author’s ‘legitimate interests’ are ‘not unreasonably prejudice[d]’. All three of these conditions must apply. Moreover, member nations guarantee that ‘the enjoyment and the exercise’ by foreign authors of the protected rights ‘shall not be subject to any formality’. [Berne Convention 9.1, 9.2, 5.2] A requirement that foreign authors should have to register an opt out of an ECL scheme in order to continue to enjoy their rights would be a ‘formality’ in any normal meaning of the word.

The ‘no formality’ provision in the Berne Convention exists for excellent reasons. If extended collective licensing and similar schemes are brought in separately on a broad basis by countries across the world, it will impose impossible administrative burdens on creators. If this were to happen, the international copyright regime would have ceased to function to protect authors’ rights. The consequences would be disastrous – not least for the UK’s creative industries.

Questions that should be asked

Hargreaves claims that ‘Opening up orphan works is a move to which there is no national economic downside.’ [4.54] Two paragraphs later, and he has slipped from talking about works with untraced copyright holders to works that are ‘not … opted out of the collective licensing scheme’. [4.56] He refers to them as ‘a national treasure trove’. [4.58] Yo ho ho and a bottle of rum! But some ‘treasure hoards’ can cost more to exploit than they are worth. For one thing, as Hargreaves acknowledges, there is a possibility, to say the least of it, that releasing for digital publication a large number of works that are ‘almost free to use’ will undercut the sales of new works. [4.58] The IPO Review team seem to think that a slump in the market for new works would be nothing to worry about, because it would be offset by a growth in services based on aggregating old material. [Econ. Impact, p. 23] Their calculations look distinctly scrappy. But in any case, what they are dismissing so briskly are the markets in new creative works that sustain our living culture.

Under the innocuous-seeming label of an ‘orphan works solution’, Hargreaves is proposing to remove from authors their fundamental right to authorise publication. This would be a major change in copyright law, with all kinds of potential for economic and cultural damage. Here are some questions that the Review should have asked, but failed. What would be the costs and complexities of an ECL opt-out registering system? What would be the likely toll on creative production? If currently out-of-print books are summarily co-opted into a mass-digitisation scheme, what will this do to the emerging market in digital editions? If ECL is allowed to erode the principle of direct licensing, will authorship still be an economically sustainable profession? What would be the disadvantages to the UK of undermining the international copyright regime? What are truly innovative, services based on aggregating and manipulating old content, or creative industries that produce new works, new forms of works, and with them, new value?

[PDF] | [DOC] | [ODT]

Hargreaves Review: Proposals for a Digital Copyright Exchange

This is the second of a series of posts on the Hargreaves Report. The first post is on Fair Use and Fair Dealing.

All non-specific references are to the main report document, Digital Opportunity. A Review of Intellectual Property and Growth.

References preceded by Econ. Impact are to Supporting Document EE. Economic Impact of Recommendations.

5. Digital Copyright Exchange

This is Hargreaves’ big idea, an elaborate multi-purpose scheme intended to tackle several different problems. Unfortunately, his account of what he has in mind is not well organised, nor is it always very clear. To get the fullest possible picture, it is necessary to pull together statements made in a number of scattered passages.

It appears that the purposes of the proposed Digital Copyright Exchange are to

• facilitate copyright licensing [Executive Summary p. 3 and passim; Econ. Impact pp. 11–13]
• help clarify ownership of copyrights [4.23, 4.34, 4.59]
• educate and inform about copyright. [4.23]

It would provide the machinery for

• automating licensing transactions [Executive Summary p. 4 and 4.20, 4.23; Econ. Impact p. 13]
• tracing and contacting rights-holders and/or their agents [4.23]
• publicising the availability, terms and fees of licences for specific works [4.23]
• determining whether the search for the rights holder of a putative ‘orphan’ work has been ‘sufficiently “diligent” ‘. [4.59]
• licensing works with unlocated copyright holders (‘orphan works’) [4.59]
• resolving disputes [4.23, 4.32, 4.59]
• connecting rights-owners with collecting societies. [4.23]

Notes

(i) Machinery for automating licensing transactions, tracing rights-holders, etc: it is plainly being envisaged that rights owners should decide for themselves on what terms their works are made available for licensing, and whether licences may be issued automatically or must be directly negotiated. [See especially 4.23] Note also Hargreaves’ assurance in a comment on the IP Review blog: ‘pricing is a judgement for licensors’. [See Review Blog, 18/5/2011, p. 4]]

(ii) ‘Orphan works’ and ‘diligent search’: this will be discussed later, under ‘Orphan Works’.

(iii) Connecting rights-owners with collecting societies: Hargreaves states that the Exchange would provide creators with ‘a single point of access to UK collecting societies and eventually to competitor societies in other territories’. [4.23] He does not explain how the Exchange would interact with the collecting societies. Clarification on this point was sought through the Review blog but has not been forthcoming. [See Review Blog, 18/5/2011, p. 9]
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The objects of setting up a Digital Copyright Exchange would include

• speeding up licensing transactions [Executive Summary p. 3 and 4.20, 4.23; Econ. Impact p. 13]
• reducing transaction costs [Executive Summary p. 4, 4.23; Econ. Impact pp. 11, 13]
• facilitating high-volume rights clearance [4.13, 4.19, 4.48; Econ. Impact p. 12]
• facilitating extended collective licensing and the mass-digitisation of ‘orphan’ and other works [4.48, 4.49]
• providing better protection for copyrights [Executive Summary p. 3, 4.23]
• reducing the costs of copyright disputes by means of ‘a low cost dispute resolution system’ [Executive Summary p. 4, 4.23, 4.32]
• facilitating rights clearance across national boundaries (eventually). [4.12, 4.22, 4.42]

Notes

(i) Better protection for copyrights: or so Hargreaves seems to be promising on p. 3. He doesn’t clearly explain how he thinks a Digital Copyright Exchange will achieve this, but apparently it is by providing ‘a means to record unmistakeably the ownership of rights’ and ‘a defence against rogue “orphaning” of works, through digital fingerprinting’. [4.23]

(ii) ‘A low cost dispute resolution system’: Hargreaves does not explain what he has in mind. Presumably some kind of arbitration system, but no details are provided. A dispute system will certainly be needed. It is predictable that there will be some fraudulent registering of rights, and honest mistakes as well. This is acknowledged in Supporting Document R. Copyright Licensing Call for Evidence Response: ‘All the problems attendant on orphan works solutions (false identification of authorship, challenge to rights ownership assertion …) will be present for automatic rights clearance.’ [See Supporting Document R., p. 1] It would be highly important that any arbitration system should be completely independent and safeguarded against capture by particular interests.
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Hargreaves gives the following details of how he envisages the Digital Copyright Exchange operating:

a) It is to be ‘a network of interoperable databases [providing] a common platform for licensing transactions’. [4.31]
b) Digital content will come with ‘copyright conditions and rights information’ in an ‘open, standardised’ format directly attached to it ‘in a uniform machine readable fashion’. [4.31]
c) The system might have similarities to the Domain Name System (DNS). [4.33; see also panel on p. 30]

Notes

(i) ‘A network of interoperable databases’: Hargreaves does not explain how he envisages the network’s being constituted. Clarification was sought through the Review blog but has not been forthcoming. [See Review Blog, 18/5/2011, p. 9] (‘Interoperable’ indicates that the data held by the databases is to be in a format that they can all share.)

(ii) Digital content with information attached: a big problem with this would be the size of the resulting files. At present web publishers routinely strip metadata from images in order that pages will load faster. Another problem is the fact that rights-owners are likely to want to change the licensing conditions for their works from time to time. These problems might be solved if the data is held online and the file contained a small identifier pointing to its location.

(iii) Similarities to the Domain Name System: that is a good idea. An even better one might be to build the system directly within the structure of the existing Domain Name System and the World Wide Web.
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More details of how it is to operate:

a) Participation is to be voluntary, but Hargreaves wants the Government to make legislative changes to induce rights holders to use it. These include measures intended to apply pressure. He suggests that copyright infringement of ‘works available through the licensing exchange’ should

• attract increased damages
• alone be liable to the penalties for infringement in the Digital Economy Act. [Executive Summary p. 8 and 4.34]

b) Running costs are to be funded through ‘through a small user charge’. [4.36]

Notes

(i) Increased damages: this is similar to the principle that underpins the US Copyright Office; registration is voluntary, but it makes a lot of difference to the damages available in a case of infringement. It is noticeable that Hargreaves here talks about works that are ‘available’ through the Exchange and not works that are registered with it (for example as a way of protecting them from being exploited as ‘orphans’) but which are not being made available to the public.

In his insistence that failure to make works available through the Exchange should incur certain legal penalties, Hargreaves betrays his doubts that copyright holders will perceive the scheme as serving their economic needs. Sticks are not needed when the carrots are sufficient.

(ii) ‘A small user charge’: rather a lot of questions are left unanswered. Would the users who would be required to pay up be the licensees or the licensors, or both? Would the charge be levied per user, per work, or per transaction? What is meant by ‘small’? Clarification on the first point: who pays? licensees or licensors? was sought through the Review blog but has not been forthcoming. [See Review Blog, 18/5/2011, p. 9]

_______

Who will set it up?

Hargreaves is emphatic that it must not be a creation of the Government; the Government’s role is envisaged as ‘bringing together all relevant interests, and finding ways to overcome divergences of interest to secure the bigger prize in a way that takes account of the interests of all’. [4.30] The ‘relevant interests’ are elsewhere referred to as ‘rights holders and other business interests’ [Executive Summary, p. 4]

Hargreaves suggests, however, that the Government should consider funding the costs of setting up the Exchange, including the IT costs, and proposes that this might come ‘from IPO reserves’. [4.34]

The scheme is to be up and running ‘by the end of 2012’. ‘A highly respected figure’ should be appointed by the Government ‘to oversee its design and implementation’. [Executive Summary p. 8, and 4.35 ]

‘Governance should reflect the interests of participants, working to an agreed code of practice.’ Regulation with a light touch is to be provided by IPO or perhaps Ofcom. [Executive Summary p. 8, 4.37]

Notes

(i) ‘Bringing together all relevant interests, and finding ways to overcome divergences of interest to secure the bigger prize in a way that takes account of the interests of all’: there are rather a lot of interests colliding with each other here, in more senses than one.

First, who is going to identify ‘all the relevant interests’, and what criteria are they going to use?
Who is going to represent the various interests in negotiations? In particular, who is going to stand up for the interests of freelance authors and other creators? And when interests diverge, as Hargreave acknowledges they will, how are they to be be ‘overcome’? (An interesting choice of word. He might have said ‘reconcile’ – but he didn’t.)

(ii) ‘Governance should reflect the interests of participants’ – that is very glib. Who is going to run this thing? Who, crucially, is to fix the rates for mass licensing, and in accordance with whose interests? Who will own it? Not, apparently, the Government, though Hargreaves suggests that the Intellectual Property Office (IPO) might dig into its reserves to set it up (and it is hard to see who will fund that, if it is not some branch of government). To whom is it going to be accountable?
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In the main report the projected benefits of a Copyright Exchange are said to be

• supplying the public with lower-cost digital content, in order to help combat piracy (this by making licensing transactions more efficient and therefore cheaper) [4.16; 8.40; see also 4.23]
• preventing the ‘orphaning’ of works in the future [4.23, 4.59]
• providing opportunities for creators to license their work, including licensing it directly on terms of their choosing [Executive Summary p. 4 and 4.19, 4.21, 4.23]
• providing prospective licensees with easy access to the applicable licensing terms for specific works [4.23]
• improving creators’ ‘understanding of licensing terms and conditions throughout the market’, so they can make ‘more realistic judgments about their own business models’ [4.23]
• making it easier for licensees to figure out the investment costs of planned projects [4.22, 4.23; see also 4.12, 4.18]
• facilitating audits for users and regulators. [4.23]

This should be compared with what Hargreaves says in Supporting Document EE. Economic Impact of Recommendations. Here he states frankly, as he does not in the main report, that the initial beneficiaries of the proposed Digital Copyright Exchange will be

• content aggregators (‘firms delivering new bundles of content services through existing technology’)
• ‘firms aiming to introduce new services using new devices or software systems which present content to consumers in new ways’ (he cites Apple as an example). [Econ. Impact p. 12]

The benefit to these firms is expected to come as the result of ‘lower costs of entry to media markets’. [Econ. Impact p. 13]

Under the sub-heading ‘Who is likely to lose and what are the risks?’ Hargreaves says: ‘If the licensing process becomes more efficient it is difficult to see how rights owners are likely to lose. One outcome should be that as deadweight administrative costs fall, and content becomes accessible to more distributors, returns to creators could increase.’ [Econ. Impact p. 12]

He is concerned that not enough rights-holders will choose to participate. ‘Careful thought must be given to incentives which give rights holders and others enough reward to bring them in, but not so much as to pre-empt returns to firms which are taking new risks, and developing new businesses.’ [Econ. Impact p. 13]

Notes

(i) ‘Deadweight administrative costs’: this is the only point at which Hargreaves acknowledges the huge burden of initial data entry which would fall on rights holders. Then there will also be the burden of keeping entries up to date with data about rights transfers, current availability for licensing and so forth.

(ii) ‘New risks’: rights holders would be taking risks too. They would have to invest administrative time, in some cases a very large amount of it, and may also (it is not clear) be expected to pay a ‘user charge’ or charges, in return for quite uncertain rewards. As Hargreaves says, ‘returns to creators could increase’: but will they?

If the scheme is rigged from the start with the aim of favouring buyers (licensees, especially, it seems, content aggregators) over sellers (licensors, primarily creators), then it will surely fail.

Hargreaves Review: Fair Use and Fair Dealing

In March we put in a submission to the Independent Review of Intellectual Property and Growth, led by Ian Hargreaves. Hargreaves’ report was published on 18 May. This is the first in a series of posts which will summarise and examine Hargreaves’ recommendations on copyright. It will cover his proposals on fair dealing.

All non-specific references are to the main report document, Digital Opportunity. A Review of Intellectual Property and Growth.

References preceded by Econ. Impact are to Supporting Document EE. Economic Impact of Recommendations.

1. Fair use

Hargreaves rejects the proposal that fair use principles on the US model should be incorporated into UK copyright law. [Executive Summary p. 5]

Notes

(i) The report states that most submissions were strongly opposed to this. [5.13. See also Supporting Document Q: Fair use and the Independent Review.]

(ii) Government lawyers warned that there would be major problems over attempting to introduce fair use on the US model within the framework of EU law. [5.19]

2. Extension of fair dealing provisions

Hargreaves calls for the fair dealing provisions in UK copyright law to be extended to cover the following:

a) ‘format shifting’ already owned material for personal use: eg. copying music owned on CD onto hard disks [Executive Summary p. 4, and 5.10, 5.27–5.31; Econ. Impact pp. 24–27]

b) making parodies and pastiches of copyright material [5.32, 5.35–5.37; Econ. Impact pp. 28–29]

c) the copying by libraries and archives of sound, film and broadcast material for conservation purposes [Executive Summary p. 4, and 5.34; Econ. Impact pp. 31–33]

d) extending the existing provisions relating to copying for non-commercial research ‘to cover the full range of media’: this particularly affects sound recordings and film, which are not specified in the current legislation [5.32, 5.33]

e) the mass-digitising of material for the purposes of carrying out non-commercial research involving text analysis and data-mining [Executive Summary p. 8 and 5.21, 5.26, 5.32; Econ. Impact p.30; Supporting Document T. Text Mining and Data Analytics in Call for Evidence Responses]

Although these activities are not currently permitted under UK law, the EU permits member states to legislate to allow them: the law could therefore be changed without any need to lobby for changes in EU law. [Executive Summary pp. 4, 8, and 5.6]

In 2006 the Gowers Review of Intellectual Property recommended changing the law to permit format-shifting and parody and extend the scope of permitted copying for conservation and non-commercial research.

Notes

(i) Format-shifting: the EU copyright directive permits it ‘on condition that the rightholders receive fair compensation’. Hargreaves argues that consumers are doing this sort of thing already, and that rights holders have adjusted their prices to take account of this, so no additional compensation will be needed. [5.30; Econ. Impact p. 25]

Much of the time Hargreaves’ remarks on format-shifting refer specifically to audio material, with a couple of references to video, but it is clear that he is envisaging that the principle will be applied to every sort of creative work: ‘format shifting could apply across all content’. [Econ. Impact p. 26] He calls for a change in the law ‘to allow individuals to make copies for their own and immediate family’s use on different media’ [5.31]. This would legalise the scanning for personal use of printed books owned by the user.

(ii) Making archive copies for conservation: this, as he notes, ‘should be uncontroversial’. [5.34] In the same paragraph, however, he suggests that it ‘could open the way to new services based on digital use of those archives’, remarking ‘We may well find that this public digital archive turns out to have considerable economic as well as social and cultural value’. In other words, he envisages that digital copies made for conservation reasons may subsequently be put to other uses by the libraries. This is potentially highly controversial, though he does not acknowledge this, or give examples, anywhere in the main report.

In Supporting Document EE. Economic Impact of Recommendations he states ‘Libraries and firms holding archives would be the main beneficiary [sic]’ of changing the rules. He suggests that digitising collections would ‘[improve] accessibility … for example by being able to search electronic databases for specific information’. [Econ. Impact p. 31] This, of course, would only be a legal use of copies made for archiving purposes if the fair dealing rules were also changed to permit indexing and data-mining.

More importantly, he says: ‘There would be a risk around whether libraries are allowed to share newly archived content digitally within or beyond the library premises. Such sharing may be good for library users but negatively impact publishers of content as the library offering may be a substitute for purchases.’ [Econ. Impact p. 32] Quite so. This will be considered again later, under Extended Collective Licensing.

(iii) Non-commercial research: the Copyright, Designs and Patents Act 1988 permits ‘Fair dealing with a literary, dramatic, musical or artistic work for the purposes of research for a non-commercial purpose’ [1988 Act, 29.1]. Sound recordings and films are currently not covered.

Also not covered under the fair dealing provisions as they stand at present is the mass-digitising of large numbers of copyright texts in order to submit the corpus to machine analysis. Hargreaves is very exercised by this particular issue. [5.21, 5.26]

3. Fair dealing and restrictive clauses in licensing contracts

Hargreaves notes that increasingly rights holders have been including clauses in licensing contracts that curtail the rights established under the fair dealing provisions. By means of restrictive clauses they effectively rewrite copyright law to assign themselves rights that the law does not grant them. He calls for legislation ‘to make it clear no exception to copyright can be overridden by contract.’ [5.3, 5.39–5.40]

4. Copying for commercial data mining, etc

Hargreaves calls for the UK Government to ‘press at EU level’ for a change in the law that would allow commercial uses to be made of copyright works when these uses are ‘enabled by technology’ and ‘do not directly trade on the underlying creative and expressive purpose of the work’. As examples of this he mentions text analytics, data mining, and, in one place, ‘search engine indexing’ [Executive Summary pp. 5, 8 and 5.20–5.24; Econ. Impact pp. 35–36]

Note

This would, of course, make Google Book Search legal in the EU, though Hargreaves does not mention this. Google is currently facing a second law suit in France arising out of its copying of copyright works for Google Book Search. The first law suit is still going through the French courts.

Coming next: Hargreaves’ proposals for a Digital Copyright Exchange.

The Digital Economy Bill and Orphan Works

The Bill would permit works whose rights-owners reportedly could not be traced to be used for commercial purposes. It is regrettable that the Bill uses the emotive and inaccurate term ‘orphan works’ for what might be more properly termed ‘works with unlocated copyright-owners’.

In the case of printed written works, it has not been shown that legislation of this kind is needed. No evidence has been produced that publishers seeking to reprint, editors seeking to anthologise, or authors wishing to make adaptations experience significant difficulties in tracing rights-owners of out-of-print written works, and there is plenty of anecdotal evidence to the contrary. Moreover, the ALCS reports a very high degree of success in identifying and contacting authors of out-of-print works for the purpose of paying fees for photocopy revenues.

Books and other print publications are among the least likely creative products to become ‘orphaned’. Virtually all published written works carry the names of author and publisher and the publisher’s address. Meanwhile, since the development of the web, it has never been easier to trace authors, authors’ representatives, publishers, and, where relevant, business takeovers

Regrettably, it is not unknown for publishers, media companies or editors to use works (especially short works and excerpts) without troubling to clear permissions, even in cases where the author could easily be contacted; they simply wait to see if he or she finds out. There is a real risk that the orphan works provisions in the Bill will encourage this kind of behaviour.

In response to concerns expressed by professional photographers, the Government has asserted that ‘Any use of an orphan work will require payment of a fair licence fee, and this fee will be held safely and kept available to be claimed by the rightful owner should they come forwards.’

But for publishing or broadcasting uses there is no such thing as a ‘fair licence fee’; there is only the market rate for the work, as established in negotiations between the rights-holder and the licensee. This rate will vary depending on a number of factors that may include the likely profitability of the intended use, the quality of the work, the reputation of the author, the value of the work in terms of its specific contribution to the creative project, the extent to which another work might be substituted for it, and so on. This ‘fair licence fee’ is a chimera.

There has been no explanation as to who is going to fix the rates for the use of works with unlocated owners, and on what principles. Nor is it specified who shall hold the unclaimed fees in trust.

When owners of works that have been treated as orphans come forward to claim their property, they may feel that their works have been licensed at too cheap a rate, or they may have objections on business or moral rights grounds to the uses made of their works. Certain kinds of exploitation may injure the value of a work and/or damage the author’s reputation. What remedies will be available in such cases?

It is certain that in some cases works will be used without credit or attribution, in a breach of the author’s moral right to be identified.

Orphan works are defined in 116C as a work for which someone has carried out a diligent search to find the owner of the copyright, or an interest in the copyright, and has failed to find them.  

Clause 116A provides for orphan works to be licensed in two ways. Licensing bodies may be authorised to issue licences to users, but the Secretary of State may also grant authorisations directly. Every licensing body that licenses orphan works, either directly or under an extended licensing scheme, must keep an orphan works register, available to the public. Every user who is directly authorised by the Secretary of State must do the same.

Any orphan works scheme would impose on all authors a burden of constant vigilance, on pain of harm to their copyrights. But this system of multiple registers seems calculated to make it as difficult as possible for authors to check to see if any of their works have been misclassed as orphans.

The Government has stated that ‘before a user can apply for a licence to use the work, they must first carry out a diligent search for the original owner of the right’. This is not strictly true. Subclause 116D(4)(b) states that a work may be entered in an orphan works register if ‘the authorised person’ has either carried out a diligent search along lines laid down in the Bill or ‘has reasonable grounds for believing that another person has taken those steps and that the owner of the interest has not been found’. So only the first person interested in licensing a work needs to actually carry out a search for the owner of the rights, and on the basis of that search a work may be entered in more than one register.

Under paragraph 4 of Schedule A1 (Schedule 2 of the Digital Economy Bill), the Secretary of State is empowered, but not compelled, to introduce penalties, including fines, for breaches of the duty to carry out a diligent search/have reasonable grounds to believe that such a search has been conducted before entering a work in an orphan register, and for not removing a work from the register if it appears that the required search was not, after all, carried out, or if the copyright-owner is found. Possible financial penalties are capped at £50,000. It is not clear whether this is an overall cap, or whether, in the event of breaches affecting multiple works, multiple penalties would be imposed.

In the event that the Secretary of State does not take up the powers to impose penalties, there will, apparently, be no restraint on infringers beyond the risk of legal action by a rights-holder. More on that in a moment.

Subclause 116D(7) is very disturbing: it permits the Secretary of State to make regulations that would set aside the requirements for diligent search, or for reasonable belief that such a search had been conducted. All that would be needed would be for an authorised user to list the work in an ‘orphan works’ register. Worse: even if an authorised user were to find the copyright-owner of a work that had been registered as an orphan, there would be no obligation to remove the work from the register.

It is bizarre and disquieting that the orphan works provisions should contain a subclause that entirely subverts the safeguards written into these clauses, and nullifies the definition of an orphan work incorporated in the Bill. It does not inspire the confidence that there ought to be in the good faith intentions behind the orphan works provisions.

Subclause 116D(8) refers forward to Schedule A1: in the event that any authorised user took advantage of regulations made under 116D(7), he/she would remain liable to any penalties imposed under paragraph 4. However, as noted above, there is no requirement that such penalties should be imposed. If the Secretary of State sees fit to make regulations under subclause 116D(7), it is the less likely, presumably, that penalties will be imposed under paragraph 4.

Subclause 116D(8) also states that in cases where the Secretary of State had set aside the requirement for diligent search, etc, the failure to carry out the required steps would nonetheless be ‘actionable as a breach of statutory duty owed to the owner of the [copyright] interest’: it would be open to the copyright-owner to take action in the courts.

The National Union of Journalists (NUJ) and other organisations have made sure that the Government is well informed about the difficulties that freelance creators face when attempting to use the courts, especially when suing well-resourced corporate infringers. The Government must be fully aware that under the present arrangements, a right to sue is no protection at all. Most copyright cases brought by freelance creators involve relatively small sums, which nonetheless are important to small creative businesses. It is no longer possible to bring copyright cases in the small claims courts. Even claims involving small amounts must be dealt with in the County Court ‘multi-track process’, and claimants will be liable for substantial costs if they lose their case, or the court makes an award that is lower than, or the same as, an offer made by the defendant. This system favours litigants who have good representation and deep pockets, and companies are well aware of this.

In Canada, where orphan works legislation is in force, licences for the use of works with unlocated copyright-owners are issued by the Copyright Board of Canada, a statutory body. By contrast, clause 116A provides for licences to be issued by licensing societies, and also for certain bodies to self-license.

Licensing societies are answerable to their membership, who are copyright-owners or other rights-holders, with an interest in seeing that any licensing scheme is properly conducted, and that adequate safeguards are in place, and are duly complied with. Nonetheless, it should be clearly laid down that they have a duty of care towards rights-holders who are not members of their society.

Self-licensing arrangements are altogether more problematic. The British Library, the BBC and Channel Four are all rumoured to be planning to seek authorisation to issue themselves licenses for the use of works whose copyright-owners they have failed to locate.

There is a glaring conflict of interest apparent in these cases. Who is going to look out for the interests of the absent copyright-owners? Particular areas of concern are:

• Who will ensure that ‘diligent search’ procedures are properly carried out?
• Who will hold the unclaimed payments in readiness?
• Who will certify the claims of absent rights-holders who come forward, and on what basis?

Licensing societies are active in continually seeking out prospective members and people for whom they hold payments. No obligation is placed on self-licensing bodies under this legislation to search for absent copyright-owners beyond the initial effort; and if the work appears on a copyright register held by someone else, they are even spared from conducting that.

The self-licensing procedure is fraught with dangers for the absent copyright-owners.

[Post revised 18.54 29/03/10]

Digital Economy Bill and Extended Licensing: 3

The government has given assurances that opting out of extended licensing schemes will be a simple process. The British Association of Picture Libraries and Agencies (BAPLA) believes that IPO intends that registration to opt out will be ‘free to rights holders and managed on a non-commercial basis’.

Nonetheless, it remains the case that extended licensing removes from licensees (typically, well-resourced publishers or media companies) the burden of finding and negotiating with the author, and instead places on authors the burden of finding out that schemes exist and opting out of them (or claiming their share of revenue). This is, let’s be clear, a major point of the plan to introduce extended licensing: transferring the transaction costs from the licensee to the creator.

The right holder to whom it is crucial that her works are not exploited under an E[xtended] C[ollective] L[icensing scheme] has to establish mechanisms for monitoring the market and bear the costs associated with such efforts of monitoring – Thomas Riis and Jens Schovsbo, ‘Extended Collective Licenses and the Nordic Experience’

Not all authors are members of professional organisations, or in touch with authors’ networks; indeed, not all published authors are professional writers. It is inconceivable to most creative people working in the UK that they should have to take formal action to protect their rights in their published works.

The system [of extended collective licensing] is best suited for countries where rights holders are well organized. – World Intellectual Property Organization (WIPO) and International Federation of Reproduction Rights Organisations (IFRRO), April 2005

The Nordic countries that developed extended licensing have small populations. The largest is Sweden, with a population of nine million. Their languages are not world languages, as English is. Very many works by authors from other English-speaking countries are published or distributed in the UK.

Even defenders of the extended licensing system recognise that it is very unfair on foreign rights-holders.

It may be very difficult for foreign right holders to find out that their works are being used under an E[xtended] C[ollective] L[icensing scheme] and consequently they cannot claim remuneration (or opt out of the ECL for that matter) – Thomas Riis and Jens Schovsbo, ‘Extended Collective Licenses and the Nordic Experience’

Unless applied very narrowly and in very limited, specific circumstances, extended licensing may place the UK in breach of its obligations under the Berne Convention. Signatories to the Berne Convention guarantee that ‘the enjoyment and the exercise’ by foreign authors of the protected rights ‘shall not be subject to any formality’.

The purpose of … article [5.2 of the Berne Convention] is to avoid constraining the rights holder to check the exercise of his rights in each country. Since extended collective management is country based … it means that the rights holder has to actually check each country, with potential linguistic problems and – even small – variations in procedures, to keep control of the exercise of his rights … This is hardly simple, even with the help of modern communication media. Furthermore, given the nature of the problem addressed, the formality prohibition is necessarily intended to apply to any type of national formality, however instituted – Bernard Lang, ‘Orphan Works and the Google Book Search Settlement – an International Perspective’

Exceptions to the Berne Convention are permitted by legislation, but only in ‘certain special cases’. Any reproduction under such exceptions ‘must not conflict with a normal exploitation of the work’ or ‘unreasonably prejudice the legitimate interests of the author’. All three of these conditions must apply.

The powers granted to the Secretary of State under clause 116B are extremely broad. The government has cited no special cases to justify the imposition of extended licensing on works whose authors are known or may be easily traced. The clause contains no limitations to prevent its application to uses that would interfere with a work’s normal exploitation or operate to the detriment of the author’s legitimate interests.

We do not understand or accept the need for extended licensing schemes, other than in relation to orphan works, except possibly in very limited and specific circumstances and after the fullest consultation with copyright owners likely to be affected. By contrast, the breadth of the power given to the Secretary of State is very wide and lacks any detail or limitations – The Society of Authors

One of the fears of UK authors, and authors world-wide, is that extended collective licensing and similar schemes will be brought in separately on a broad basis by countries across the world, imposing impossible administrative burdens.

If this were to happen, the international copyright regime would have ceased to function to protect authors’ rights. The consequences would be disastrous – not least for the UK’s creative industries.