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Many stakeholders have welcomed this clause with enthusiasm. It must have been deeply frustrating for organisations storing endless corridors of fascinating material which cannot be used, distributed or displayed. I sympathise with their relief that finally these treasure troves will be opened up. However, that relief should not cloud the consideration of whether the final scheme

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is appropriate, fair or sensible. The desire to use genuine orphan works must not lead to any weakening of legitimate copyrights. Such a move would be deeply unfair and would sit most uncomfortably with the first part of the Bill, which is all about protecting copyright.

So far, the Government have told us little about how an orphan works scheme will operate. Any safeguards in this Bill, such as the code under which the licensing bodies might operate, are optional. There is nothing in the Bill, as currently drafted, to require a licensed body to make appropriate efforts to find the copyright owner, nor to require that copyright owners will be suitably recompensed if they turn up. Indeed, there is no guarantee that the scheme will do what it is intended to do, which is to allow organisations to use orphan works without fear of future legal action. The noble Viscount's amendments make a good start in filling in some of these blanks. I look forward to hearing the Minister's response.

8.45 pm

Lord Young of Norwood Green: My Lords, I apologise in advance for giving a lengthy reply, but this is the first time we have debated this issue and it merits such a reply. I thank the noble Viscount, Lord Bridgeman, for his constructive approach to this matter.

This group of amendments appears to have three objectives. The first is to insert a definition of "orphan works", including requirements for a diligent search. The Government genuinely sympathise with the intention of this amendment, and, taking on board the report from the Delegated Powers and Regulatory Reform Committee, have tabled Amendment 282AZA, which we shall discuss later. I believe that this new definition provides for the diligent searching which the amendment seeks to achieve, so I would urge noble Lords to consider withdrawing it.

The second objective of the group of amendments is to make provision for payment for use of orphan works, including an indemnity for the user. I understand that the intention of these amendments is to clarify how payment for use of orphan works would work in practice. The Bill gives the Secretary of State powers to deliver a solution to the long-standing problems caused by orphan works, and this includes powers to make regulations dealing with royalties paid for the use of orphan works. As I say, we intend to define those in regulations. There will be full consultation on the regulations later in the year.

Amendment 265 requires the person authorising the use of an orphan work to indemnify its licensees for any liability they incur through use of the orphan work. As authorisation gives consent for the use of an orphan work, any licensee will not infringe copyright, so an indemnity would serve no purpose. It is worth making it clear that, as I said, the Government are committed to engaging in extensive and full consultations with interested parties to inform the final shape of the regulations-the noble Baroness, Lady Buscombe, referred to that-that will govern orphan works schemes. We fully understand the importance of those. The regulations will ensure that we get the balance right between the creator and the desire to share these orphan works with the public at large.

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The third and final issue in this group of amendments is raised in the definition introduced by Amendment 255B, which seeks to provide that fair dealing in an orphan work does not infringe copyright. As drafted, Clause 42 inserts powers to make regulations providing for the use of orphan works. There is a power to make consequential amendments to the Copyright Act inserted by Clause 42, but at present there is no intention to alter the exceptions contained in that Act. Again, any changes to the current system of exceptions, if that were proposed, would be introduced only after full consultation.

The noble Viscount, Lord Bridgeman, talked about the two letters to the Times, one of which was welcoming and the other of which expressed concern. I can understand the concern. This is a big step. We are all seeking to get the balance right without destroying any creator's rights. I do not think that I could have put it any better than my noble friend Lord Howarth who talked about the mass of material in the British Library, something like 40 per cent of it being orphan works. The situation was perhaps even more graphically described by the noble Lord, Lord Howard, who referred to the treasure troves. Indeed, they are treasure troves. We have no intention of weakening legitimate copyright.

The letter in the Times said that any institution can set itself up and after a rudimentary search declare a work orphan. That is not true. My noble friend Lord Howarth described the position correctly. Bodies will have to be authorised and regulated and will have to carry out a diligent search as defined in the government amendments. These safeguards will protect the rights of absent rights owners. If I were them, I could understand why they would write that letter, because if they have any doubts at all, they want to get the point home to the Government. In a desire to express their concern, they have made a rather simplistic, inaccurate description of what will be required. It is not the case that anyone can set up this body, do a quick search and orphan works will be declared. Nothing could be further from the truth.

I have referred to the subsequent government Amendment 282AZA, in which we took on board comments from the Delegated Powers and Regulatory Reform Committee. I hope that in the light of the explanation and the assurances that I have given, the noble Viscount will feel able to withdraw the amendment.

Viscount Bridgeman: My Lords, I have clearly been unsuccessful in persuading the Minister and the noble Lord, Lord Howarth, that this provision facilitates the exploitation of orphan works incidentally without the expenses payable to a third party. It is a direct contract between the holder of the image and the user. I am sure that this matter will be revisited at later stages. In the mean time, I beg leave to withdraw the amendment.

Amendment 255B withdrawn.

Amendment 256

Moved by Lord Clement-Jones

256: Clause 42, page 46, line 8, leave out "or other person"

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Lord Clement-Jones: My Lords, in moving Amendment 256, I will speak also to other amendments in the group. Essentially, the amendment is designed to probe the intentions of government regarding those bodies other than collective licensing schemes which the clause appears to permit. The noble Lord, Lord Howarth, is correct that it is entirely valid for many cultural organisations to have the ambition to be licensing schemes. However, no distinction appears to be made between commercial and cultural organisations. That is the fear at the root of the clause. No doubt all of us will have more to say on later amendments. In the absence of proper reassurance from the Government that there is a distinction to make between commercial and non-commercial organisations, the amendment is designed to say that the only licensing organisations should be those run by copyright holders.

We now seem to have a definition of an orphan work which is much more satisfactory. No doubt we will come to that in a moment when we consider the government amendments. There is no doubt that the clause has been improved, but these amendments are designed to deal with a number of clarifications in terms of the sorts of administrative costs that could be charged by a collective licensing body and so on. A great deal could be said here, and no doubt we will use the amendments as we go through our proceedings to explicitly talk about further aspects. This group of amendments is about the right for others, which are not collective schemes, to be licensed. It is extremely important that the Government give reassurance on that matter, particularly regarding commercial organisations. I beg to move.

Lord Howard of Rising: I agree entirely with the concerns of the noble Lord, Lord Clement-Jones, as to the nature of the licensing bodies. As with so much else in the Bill, there are endless questions to be answered about the make-up, numbers and priorities of the bodies, not least the difference between commercial and other organisations as mentioned by the noble Lord. How many authorisations does the Minister anticipate making in the first round? Are we looking at a few large bodies or will there be numerous smaller ones? Will there be any sort of review process to establish whether an authorised body is operating well or will the Secretary of State rely on industry complaints to identify a problem?

Noble Lords are also right to highlight the conflict of interest that might well arise if an authorised body's primary concern is to make available as much material as possible. In no way should those provisions be used as a convenient route around a reclusive or unco-operative copyright owner who has no wish to license his material out or engage in a discussion with a licensing body.

Amendment 273 was suggested by the British Library, which had some understandable concerns about this mysterious person who would be issuing guidance. It wanted to ensure that the guidance will be produced by someone with an understanding of public and private interests and so be able to produce a balanced view. I hope the Minister will take this opportunity to give a little more explanation as to what this guidance might consist of.

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Lord Young of Norwood Green: This group of amendments seeks to limit eligibility for authorisation to use or license the use of orphan works. It also seeks to ensure that licences and authorisations for orphan works are non-exclusive. I shall explain the difficulty that this will create.

A lot of historical and archived material contains one or more orphaned rights. The average number of orphaned works in public sector collections is estimated at some 5 to 10 per cent. The British Library, as we have already been informed, tells us that some 40 per cent of its collection is orphaned while the BBC has roughly 1 million hours of programming which is similarly orphaned and cannot currently be used. That gives the Committee some idea of the scale of orphaned works.

The inclusion of "other person" in the current wording of new Section 116A of the Copyright, Designs and Patents Act introduced by Clause 42 would allow these organisations to be authorised to use or license the use of the orphan works in their own archives. Limiting the scope to licensing bodies would mean that these organisations would have no option but to rely on an authorised licensing body when they might wish to operate their own schemes. As I have already said, the conditions for eligibility to use and authorise the use of orphan works will be considered fully as part of the Government's consultation and the regulations made will be informed by it. There will be a full consultation between all appropriate parties before we draw up these regulations.

We believe that it would not be right at this stage to rule out the possibility of certain large, respected, not-for-profit institutions, particularly those funded by public money, administering some schemes themselves. For these reasons, too, we do not believe there is any need to restrict those eligible for authorisation or to insert a new definition of licensing body into the Copyright, Designs and Patents Act as Amendment 269 seeks to do. Amendment 256A is unnecessary as new Section 116A(2) of the Copyright, Designs and Patents Act, inserted by Clause 42, provides that both authorisations and licences granted under them are non-exclusive. I hope that Amendment 273 has been addressed by a government amendment that we will address in a later group of amendments. It removes the possibility of orphan works provisions operating by reference to guidance issued by third parties.

The noble Lord, Lord Howard, asked how many authorised licensing bodies there would be. Our view is that it is a question of not how many, but how well regulated the bodies are. We stress that what is important is not the amount, but ensuring that they are properly regulated and understand that they must take a balanced approach. In their desire to release orphan works, they must not neglect the need to search for the possible owners of the works, regardless of how reclusive they may be. Nobody is suggesting that they should opt out of that process.

I hope that, with those explanations, noble Lords will not press the amendments in this group.

9 pm

Lord Clement-Jones: My Lords, I thank the Minister for that reply. I feel that a strong attempt is being made by the Minister and his team to answer the criticisms,

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but that they are not addressing the crucial point. I hope that the Minister has read the letter in the Times today that expresses some of these fears. There is no issue about cultural organisations. We have all had correspondence from the British Library, the Natural History Museum and the directors of many museums. There is no issue about allowing those organisations to exploit their archives for their own educational or cultural purposes and for orphan works to be dealt with in a proper manner. There would be no great fear if those cultural organisations had their own collecting societies. The problem is the threat of commercial organisations using orphan works without due diligence.

Lord Young of Norwood Green: I thank the noble Lord for giving way. As I looked at my note, I realised that I had not referred to the concern about commercial organisations. I will address the distinction between commercial and non-commercial cultural organisations. We understand that different sectors have different needs. The clause gives us the flexibility to set the right framework for different types of use. After all, there is no such thing as a clearly defined non-commercial body. For example, the BBC covers both commercial and non-commercial uses. The regulations will be flexible enough to allow for this. We must get the regulations right, so that we do not allow a commercial body to exploit works in a way that is unregulated and unlicensed, and disturbs the balance that we are trying to achieve in these regulations.

Lord Clement-Jones: My Lords, we are a long way away from getting a sensible resolution to this. That was a valiant attempt by the Minister. I agree that there are problems with definition, but Clause 42 is such a broad clause. It is controversial in the view of many people; for example, freelance photographers. They, along with the Royal Photographic Society, have made strong representations. Later we will discuss amendments that deal with their interests. The Government must think more carefully about how the clause can be refined. We know that there will be a problem in the other place, where Members will not have time to debate the issues. We will have what is traditionally called the wash-up at the other end. I will say that parts of the Bill will have a much easier passage than this set of proposals. I would hate these proposals to fall in their entirety because I believe it is highly frustrating for the British Library and for other cultural institutions not to have these orphan rights properly spelt out. Gowers talked about orphan rights and so on and so forth. It is not as if there is not some pedigree for orphan rights proposals and for them to be dealt with. The Government have not, however, spelt out in the way they should how these orphan rights will be limited in their scope and how these collecting societies and other licensees-licensors, I suppose I should say-are going to be dealt with.

As these amendments go through, we will continue to express dissatisfaction with this clause for entirely understandable reasons without wishing to sound as though we are trying to do down the cultural institutions that many of us value very highly.

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Baroness Buscombe: My Lords, before the noble Lord sits down, perhaps I may add briefly-I entirely agree with everything the noble Lord, Lord Clement-Jones, has said-that the issue does come down to a different situation, whether it is commercial or non-commercial. I take issue with the suggestion from the noble Lord, Lord Howarth, in the previous amendment that somehow we are not focusing-of course we are-on the important issue of freeing up orphan works for educational purposes and so on. There is a strong issue here and I am so grateful to noble Lords, including my noble friend Lord Bridgeman, for raising these issues in debate. Clause 42 is too simplistic. It is approaching copyright as an all-encompassing law, as if copyright relating to music is the same as copyright relating to images. It is rather more complex than that. Because of that, I am concerned that we may be leaving too much to regulation. I wish there was a way that we could improve the Bill rather than leaving all this to regulation as it is too important to get it wrong. We have waited years to address this issue. Although we are grateful to the Government for taking this issue on board, let us please work at it to get it right.

Lord Young of Norwood Green: My Lords, I want to give some assurance. We understand the importance of getting this right and we will reflect carefully on this debate, especially in relation to the commercial aspects. Just because we are resisting these amendments is not to say that we will not reflect on the issues that have been raised.

Lord Clement-Jones: I beg leave to withdraw the amendment.

Amendment 256 withdrawn.

Amendment 256ZA

Moved by Viscount Bridgeman

256ZA: Clause 42, page 46, line 10, at end insert-

"( ) Regulations under subsection (1) shall only provide for authorising a licensing body that represents a substantial number of authors or, as appropriate, performers of the type of works for which the licence is to be granted."

Viscount Bridgeman: My Lords, this is a disparate group of amendments. Amendments 256ZA and 276A both carry on the criteria for collecting societies and are intended for the benefit of the framers of the regulations. They are designed to ensure that the collecting societies are accustomed by their work to dealing with the sort of institutions for which they will be granting licences. Amendment 259A was our attempt to frame the definition of due diligence, which again has been covered by the government amendment. I hope the Government will consider that amendment with any others when finalising that definition in the later stages of the Bill.

Amendment 280A is a special amendment relating to libraries. It seeks to ensure that libraries are properly defined as public libraries which are defined in legislation. They are wholly owned trading subsidiaries. It is designed to ensure for instance that institutions such as the British Library fall within that but that possibly the search engines which are there for commercial purposes do not.

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Finally, on Amendment 282A, I detect a whiff of a Henry VIII clause in new Section 116D(2)(b) on the power,

The amendment relates to the subjects that are covered in new Sections 116A and 116B. I beg to move.

Lord Clement-Jones: These amendments raise very important issues. Probably the most important issue, despite the Government's introduction of a requirement for the search to be "reasonable", is how much diligence is applied to the search for an orphan work.

The European Digital Libraries Initiative set of EU guidelines on what constitutes a diligent search is a remarkable and comprehensive document that is extremely useful. It came rather too late to table an amendment to reflect it, but I believe that "diligent" should be used instead of "reasonable" in relation to a search. One of the ways in which the Government could provide greater reassurance in Clause 42 in particular is by ratcheting up the amount of diligence that is required on a search. The British Library, the National Libraries of Wales and of Scotland and the European Library have been consulted on this document, so I think it has quite a lot of acceptance in the cultural sector. I wanted to highlight it, rather sneakily, in our debate on this set of amendments. I could not speak in our debate on a previous group of amendments, so this was a convenient moment in which to mention this set of guidelines.

Viscount Bridgeman: I omitted to remind the Committee that Amendment 280A is also aimed at commercial partners who seek to piggyback on a public library to get in on the act. The amendment is designed especially to prevent that.

Lord Lucas: I do not really understand what Amendment 280A is about. What is wrong with commercial partners exploiting a copyright?

Lord Clement-Jones: It is one thing to have an extended licensing scheme for a body that already has a particular work that it needs to exploit in different formats over time and another to have a completely new work over which it tries to acquire rights through this process. If the BBC has a programme that it wants to exploit over new media, such as an iPhone, but it does not have the right to do so, I can understand the need for a collective licensing scheme. However, some circumstances need to be narrowed. This is not some free for all. The circumstances must be narrowed to the particular purposes for which the case has been made and not for purposes for which the case has not been made.

Lord Lucas: We are coming up against what will prove to be impossible over the next decade or two: maintaining the idea that the copyright owner has control rather that a right to remuneration. I do not see how control stands in the internet age.

Viscount Bridgeman: For the wholly owned subsidiary that is a trading subsidiary of a charity that cannot trade on its own account, commercial exploitation will be open to that subsidiary in any form.

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