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The stated purpose of the European Commission's recent Green Paper on Copyright in the Knowledge Economy is to “foster a debate on how knowledge for research, science and education can best be disseminated in the online environment.” 1 This debate is much wider than might first be suggested by the reference to "research, science and education". While the Green Paper deals with some of the specific problems encountered by libraries, archives and educational establishments (for example, digitisation of library catalogues, the dissemination of teaching and educational materials), the Green Paper's examination of copyright runs much deeper. Indeed, it goes to the very heart of copyright in the European Union by tackling the nature and extent of the exhaustive list of non-mandatory exceptions to copyright protection set out in the Directive on the harmonisation of certain aspects of copyright and related rights in the information society (InfoSoc Directive).2
This article examines two particular issues identified by the Green Paper which have a particular topical relevance in the UK:
- The first is the problem of orphan works – this has prompted copyright reform initiatives in a number of jurisdictions and, in the UK, Gowers recommended that a copyright exception be introduced for the use of works that are still in copyright but whose owners cannot be identified.
- The second is whether a copyright exception should be created for user-generated content on the basis that it is "transformative" – this principle is important in the context of Gowers' proposed copyright exceptions for creative, transformative or derivative works and caricature, parody or pastiche.
Background
The InfoSoc Directive harmonised across the EU the right of reproduction, the right of communication to the public, the right of making available to the public and the distribution right. The principle underlying this harmonisation effort was to provide right holders with a high level of protection; hence the scope of exclusive rights was very broadly defined. The Green Paper re-affirms this commitment:
A high level of copyright protection is crucial for intellectual creation … [a] rigorous and effective system for the protection of copyright and related rights is necessary to provide authors and producers with a reward for their creative efforts and to encourage producers and publishers to invest in creative works.
In line with these principles, the InfoSoc Directive also provided for an exhaustive list of exceptions to copyright protection. Member States were obliged to implement one exception in relation to transient copies, and were permitted to implement any of a series of 20 optional exceptions. The broad approach of the drafters was to limit Member States' ability to introduce new exceptions or extend the scope of existing exceptions, but to allow Member States a certain degree of flexibility in the implementation of the non-mandatory exceptions.
In addition, Article 5(5) of the InfoSoc Directive provides that the exceptions and limitations are to be applied in certain special cases, which do not conflict with the normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the rights holder. This provision is known as the “three step test”. The formulation of Article 5(5) reflects the Community’s international obligations in the area of copyright and related rights. The three-step test is set out in similar terms in Article 9(2) of the Berne Convention and Article 13 of TRIPS.
Overall, the exclusions and exceptions were designed to strike a balance between ensuring a reward for past creation and investment and the future dissemination of knowledge products. The Green Paper now asks whether this balance was achieved in light of evolving Internet technologies. In particular, it poses the question whether an approach based on non-mandatory exceptions is adequate, or whether certain categories of exceptions be made mandatory to ensure more legal certainty and better protection for the beneficiaries of the exceptions.
The scope of this general enquiry will be of concern to rights owners, such as authors and performers, who already have voiced doubts as to whether the introduction by the InfoSoc Directive of the exclusive "making available" right has enhanced their economic position to any significant degree.
Orphan works
Orphan works are works which are still in copyright but whose owners cannot be identified or located. The Green Paper recognises that there is a significant demand for the dissemination of works or sound recordings of an educational, historical or cultural value at a relatively low cost to a wide audience online. It also recognises that copyright clearance of orphan works can present an obstacle to the dissemination of valuable content and “can be seen as hampering follow-on creativity”. The Commission is therefore keen to find a solution to what it sees as essentially a rights clearance issue, i.e. how to ensure that users who make orphan works available are not held liable for copyright infringement when the right holder reappears and asserts his rights over the work. Apart from liability concerns, the cost and time needed to locate or identify the right holders, especially in the case of works of multiple authorship, can prove to be too great to justify the effort. The Commission says that this appears to be especially true for rights in sound recordings and audiovisual works that are currently kept in broadcasters’ archives.
The orphan works issue is currently being considered both at national and at EU level. In the UK the Gowers Review recommended that an exception for orphan works should be introduced by amendment to the InfoSoc Directive. Denmark and Hungary have developed solutions to orphan works (the Danish solution is based on extended collective licences and the Hungarian one on licences issued by a public body). The US and Canada have also taken initiatives regarding orphan works. The Canadian solution is based on non-exclusive licences issued by the Copyright Board of Canada. While approaches to the issue differ, the proposed solutions are mostly based on a common principle; a user has to perform a reasonable search in order to try to identify or locate the right holder.
In August 2006 the Commission adopted a Recommendation on the digitisation and online accessibility of cultural content and digital preservation 4 through which it sought to encourage Member States to create mechanisms to facilitate the use of orphan works and to promote the availability of lists of known orphan works. A High Level Expert Group on Digital Libraries was established bringing together stakeholders concerned by orphan works. The Group adopted a Final Report on Digital Preservation, Orphan Works and Out-of-Print Works and a Memorandum of Understanding on Orphan Works was signed by representatives of libraries, archives and rights holders. The memorandum contains a set of guidelines on diligent search for right holders and general principles concerning databases of orphan works and rights clearance mechanisms. Whilst the Commission still anticipates that “detailed solutions are to be developed at the national level” it notes that Member States have not yet developed a regulatory approach with respect to the orphan works issue. The Commission therefore invites opinions on whether regulatory action at EU level beyond the Commission Recommendation is required to deal with the problem of orphan works.
User-created content
The Green Paper also invites views on whether an “exception for user-created content” should be introduced into the InfoSoc Directive. It refers to the OECD’s 2007 study Participative Web and User-Created Content,5 which defines user-created content as “content made publicly available over the Internet, which reflects a certain amount of creative effort, and which is created outside of professional routines and practices”. The Commission states that the “obligation to clear rights before any transformative content can be made available can be perceived as a barrier to innovation in that it blocks new, potentially valuable works from being disseminated”. The Commission also recognises that before any exception for transformative works can be introduced, the conditions under which such use would be allowed must be determined, so as not to conflict with the economic interests of the rights holders of the original work.
The Commission refers to Recommendation 11 of the Gowers Review. This called for the creation of an exception for “creative, transformative or derivative works”, within the parameters of the Berne Convention three-step test. The aim of the exception would be “to favour innovative uses of works and to stimulate the production of added value”. Under the Berne Convention, a transformative use would be prima facie covered by the reproduction right and the right of adaptation. An exception to these rights would have to pass the three-step test and therefore would have to be more precise and refer to a specific policy justification or types of justified uses. It would also have to be limited to short takings (short passages, excluding particularly distinctive takings), therefore not infringing the right of adaptation.
The Commission also suggests that the InfoSoc Directive already affords flexibility in relation to free uses of works. Article 5(3)(d), for example, allows quotations “for purposes such as criticism or review”. The Commission points out that criticism and review are therefore only examples of possible justifications for quotations. This implies that Article 5(3)(d) can be given a broad scope, although the quotation must be limited to “the extent required by the specific purpose”, and in accordance with “fair practice”. The “specific purpose” of the commentary need not be the analysis of the work itself. However, a degree of taking which is fair in a commentary on that particular work may become unfair practice if it is for the purpose of commenting on a wider issue. Another exception allowing some measure of flexibility is Article 5(3)(k) which exempts uses “for the purposes of caricature, parody or pastiche”. Although these uses are not defined, they allow users to reuse elements of previous works for their own creative or transformative purpose.
Comment
Most recently (although not mentioned in the Green Paper) the UK Government addressed the issue of orphan works in its response to the House of Commons Innovation, Universities, Science and Skills Committee report on the work and operation of the Copyright Tribunal. 6 Whilst it stated that its hands are tied until the EU liberalises orphan works to whatever extent, it acknowledged that the UK has been looking at creating new voluntary solutions whereby an organisation such as a collecting society would take fee income from the user of an orphan work, subject to the society being satisfied that an appropriately diligent search has been made, and offer an indemnity in the event that copyright was enforced at a later date. There has been some scepticism over the willingness of collecting societies to step into that role.
Unfortunately, the Green Paper considers orphan works mainly in the context of facilitating digitisation projects, and therefore guidance at this stage should not be taken out of the context from which it is derived, i.e. the Commission’s Recommendation and the Expert Group’s Memorandum of Understanding, both of which focus on digital preservation. It appears fairly clear, as eventually the Commission will no doubt concede, that further action is required, preferably legislative in nature, to provide a workable scheme for creative uses of orphan works.
A user-generated content exception, unless carefully prescribed, will be anathema to rights holders. They will therefore take comfort from the Commission’s acknowledgement that any exception would be subject to strict limitations.
However, if such an exception is based on the principle of allowing transformative use of an original work, why not extend the exception further, as suggested by Gowers? The Green Paper notes that Gowers based his case for “transformative use” on US law and sampling in the Hip Hop music industry but points out that, in US law, transformative use alone is not a defence to copyright infringement but merely one of the factors considered in determining whether the fair use defence applies under § 107 US Copyright Act. Its application was recently demonstrated in Yoko Ono v. Premise Media. 7
Could a general transformative use exception be introduced into EU law as an exception in and of itself? This would be a far step indeed, at least for the UK. Transformative use as a principle underpins a number of UK decisions on substantial taking (particularly in decisions relating to parody and satire)8 and fair use 9 and many would argue that our copyright system is, in this way, sufficiently flexible to allow for artistic borrowing, or even, to coin a phrase, artistic stealing. 10 This seems to have been a theme that came through in the responses to the UK Intellectual Property Office's recent consultation on proposed changes to copyright exceptions in relation to parody. 11
The UK Intellectual Property Office has put on hold any discussion in the UK of Gowers' proposal for a copyright exception for transformative works pending the outcome of the Commission's deliberations on the issue. The outcome will be watched with interest.
Responses to the Commission's Green Paper are due by 30 November 2008.
Euan Lawson
This article was first published in the Entertainment Law Review (Ent. L.R. [2009],61). It is reproduced here with permission of Sweet & Maxwell.
1 Green Paper, "Copyright in the Knowledge Economy", COM (2008) 466/3, 16 July 2008.
2 2001/29/EC.
3 "Gowers Review of Intellectual Property", December 2006 (http://www.hm-treasury.gov.uk/d/pbr06_gowers_report_755.pdf).
4 2006/585/EC.
5 OECD, October 2007.
6 HC637, 16 June 2008 (http://www.publications.parliament.uk/pa/cm200708/cmselect/cmdius/637/637.pdf)
7 [2008] 08 Civ 3813 (2 June 2008).
8 See e.g. Joy Music v. Sunday Pictorial [1960] 2 Q.B. 60
9 See e.g. Time Warner v. Channel Four [1994] EMLR 1, Pro Sieben v. Carlton UK [1998] FSR 43.
10 See Gowers Review, para. 4.86, p. 67.
11 "Taking Forward the Gowers Review of Intellectual Property – Proposed Changes to Copyright Exceptions", UK Intellectual Property Office, 2008 (http://www.ipo.gov.uk/consult-copyrightexceptions.pdf); see brief summary of responses at http://www.ipo.gov.uk/response-copyrightexception.pdf.
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