joegratz.net

Rep. Lamar Smith, chairman of the House IP subcommittee, has introduced H.R. 5439, the “Orphan Works Act of 2006″. It is intended to limit remedies when a copyright holder cannot be found through a reasonable search before the user begins infringing, but later appears and sues for infringement. This bill is structurally similar to the legislation recommended in the Copyright Office’s Orphan Works Report, but includes several important changes in the details.

In addition to its limitation on remedies section, the bill includes provisions for two studies, one regarding the implementation of the legislation, the other regarding remedies for small copyright claims. The second appears to have been inserted at the behest of the bill’s opponents, who argue that the copyright laws already effectively deny small copyright holders relief because litigation in federal district court is so expensive.

A subsection-by-subsection analysis of the new section 514:

Subsection (a). This subsection deals with the requirements for limitation of remedies. The infringer bears the burden of proving that she is entitled to such limitation. In order to establish her eligibility, the infringer must show that, before her infringement began:

1. She performed a reasonable, good-faith search.
2. She was unable to locate the owner or anyone else who could grant her a valid license.
3. Provided reasonable attribution to the true owner on her infringing copies.

The search has to be more than just finding a copy of a work that doesn’t identify the author or copyright owner, then giving up the search. Sec. 514(a)(2)(B)(i)(II). Ordinarily, this search should include a review of the information that section 514(a)(2)(C) requires the Copyright Office to provide, including search practices and ownership records. The really good news is that the law requires the Copyright Office to make such information available on the Internet, so it probably won’t be necessary to fly to Washington, D.C. or to pay a search firm to do so in every single case, as it might have under the previous Copyright Office draft.

“Reasonableness” is the touchstone — and that’s something courts are experienced at determining. For example, reasonable attribution is likely to be no attribution at all when the infringer has absolutely no information about the authorship or provenance of the work. And a reasonable search performed by a large movie studio is likely to look a lot different than a reasonable search performed by a lone academic researcher, even if the two prospective infringers are searching for the copyright holder of the very same work.

Subsection (b). This subsection deals with the remedies to which copyright owners are entitled when they resurface and sue an infringer who meets the requirements of subsection (a). The copyright holder bears the burden of proving the amount of compensation due. Resurfacing copyright holders are entitled to:

• An order requiring the infringer to pay reasonable compensation. Sec. 514(b)(1)(A). The infringer must pay “the amount on which a reasonable willing buyer and a reasonable willing seller in the positions of the owner and the infringer would have agreed with respect to the infringing use of the work immediately before the infringement began.” Sec. 514(b)(3).
• An injunction against further infringement, taking into account the harm any injunction would cause the infringer due to her reliance on her search as well as the owner’s rights. Sec. 514(b)(2)(A). No injunction may issue against the continued use of derivative works prepared by the infringer, so long as the infringer pays reasonable compensation and provides attribution to the owner. Sec. 514(b)(2)(B). Parties not subject to suit for damages (such as state governments) are not eligible for these limitations on injunctive relief unless they made a good-faith offer of compensation that was rejected and remain willing to pay reasonable compensation as determined by the court. Sec. 514(b)(2)(C).

Subsection (c). This subsection makes clear that the new orphan works provisions do not affect any existing copyright limitations or defenses. Thus, fair use is unaffected, as are the existing provisions dealing with preservation of orphan films and library copying of orphan works and making new recordings of orphan songs.

Subsection (d). This subsection allows creators of derivative works incorporating portions of orphan works to receive copyright protection on the derivative works. This subsection creates an exception to the general rule that infringing derivative works receive no copyright protection. However, such protection extends only to the new material contributed by the author of the derivative work, so creators of derivative works can’t prevent others from using the same orphan work they used.

The bill would have a two-year “sunrise” period, and would not apply to infringement commenced before June 1, 2008. This seems unnecessary to me, but it’s better than the 10-year “sunset” provision in the Copyright Office proposal.

This is a great bill, properly balancing the rights of copyright holders and users and properly leaving the tough, fact-specific inquiries for the courts. The bill is scheduled for mark-up tomorrow, so it appears to be on a relatively fast track. If I could, I’d make some small changes to the bill — subsections (a) and (b) have virtually identical names, for example, and, more substantively, I see no reason for a two-year sunrise period. But this bill represents the best sort of copyright legislation, respecting the proprietary rights of authors while recognizing that the licensing market sometimes fails due to inadequate information and high transaction costs. If this bill passes, I feel like I should throw a big party to celebrate the dawn of a new, user-focused, policy-driven era in copyright legislation.