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8 Mar 2010 : Column 49

Lord Clement-Jones: My Lords, we now move back to the issue of orphan works under the first part of Clause 42. As I mentioned earlier, many of the government amendments-indeed all of them-are extremely welcome and I very much welcome the attempts of the Government to improve the orphan works provisions in Clause 42. It is clear that photographers and photographic libraries that are still concerned by Clause 42 recognise some of the assurances that have been given by the Minister in his letter and by the Intellectual Property Office in its meetings with the Royal Photographic Society and others. Some of those assurances include that there is no requirement to register works but this will be considered. There will be no central register for the moment but, as was mentioned, the Minister is not unsympathetic.

Anyone wishing to use an unattributed image will be required to approach a licensing body which will work to search requirements laid down by regulations established by Parliament. Regulations will not be implemented until appropriate technology and licensing procedures have been agreed with the stakeholders, including the Royal Photographic Society. Something I thought was particularly important was that deliberate or negligent misidentification will carry an appropriate sanction. It is suggested that the level of fee and diligence of search will be such that publishing an orphan work over a newly commissioned image would not be advantageous. The proposed legislation, however, is an enabling Act. The detail will be in the regulations which will be composed following consultation with stakeholders and approved by Parliament.

Nevertheless, those assurances give rise to many questions. Of course these are but assurances-they are not in the Bill-and it is not necessarily clear how the regulations will be put together after a change of government or otherwise. In the view of these photographers, orphan works will in effect be licensed under retrospective legislation, as photographers who have engaged the models via agencies for specific usages and licensed those images for specific usages were in a position to make and honour those commitments when those contracts were signed, but their ability to do so will have been subsequently and unpredictably legislated away.

The very existence of orphan works licensing may result in photographers being unable to contract for exclusive use, because they cannot guarantee that any given work will not at some point become orphaned and legitimately licensed to other users, competitors and so on. In all the creative industries, models, actors, artists, composers, rights holders of embedded copyright works and others customarily contract for and charge usage fees, and limit usage based on the assumption that the primary holder of the intellectual property rights will retain control of those rights and be bound by their contractual obligations.

There is also the argument that orphan works licensing for commercial purposes breaches Article 9 of the Berne agreement and Article 13 of the TRIPs agreement-the agreement on trade-related aspects of intellectual rights-and I hope that the Minister will be able to address that. It is argued that orphan works

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licensing undermines the rights holder's ability to guarantee a client exclusive use, and therefore falls foul of those provisions.

Then there is the question of moral rights. I note that the Minister has undertaken to engage in discussions on this subject, and a later amendment will no doubt be the subject of debate, but, again, there is no provision in the Bill to compel publishers to attribute the first step for orphan status. Germany and France have strong moral rights, and publishers-consumers of content-are profitable. The argument that this is too expensive for publishers is removed.

In many cases, metadata are routinely removed without the user's knowledge. Photographs that are uploaded to most photographic websites, such as Flickr, have their metadata stripped as part of the process. Most commonly available photo-manipulation software routinely removes metadata during the conversion of images to web-friendly file formats. Consequently, it must be assumed that any image that is uploaded to the internet in any form, or manipulated by a third party in any way, is vulnerable to inadvertent orphaning.

No distinction is made between the commercial and non-commercial exploitation of works. Commercially produced imagery usually includes models and proprietary artefacts, the consent and fees for which have been based on limited and defined usages of those photographs. Other usages would have commanded extra fees. Some usages would be forbidden in all circumstances. The client for whom the photographs have been made is likely to have signed a contract for exclusive use.

The Government have promised a fair licence fee and a market rate, but there is no such thing; each image is subject to the operating costs of its creator, the rarity and the subject. This is like trying to state that there is a market rate for art. The costs of production, the rarity value, the skill and the perceived status of the photographer all differ. Some photographs contain images of expensive professional models, property, released copyright artefacts, and so on. Others are snapshots. They may be difficult to tell apart visually, but will command radically different rates.

Work may be used in a context with which the photographer is not happy. The photograph's copyright holder-or, indeed, other stakeholders in the image, such as models, their agencies and others-might have commercial, political, religious, moral or ethical objections to possible uses to which the picture might be put and refuse permission in all circumstances if it was sought. By definition, the collective licensing of orphan works can take no account of that.

I welcome the fact that exclusions can be made from the framework, but how can contemporary photography be defined if that is the subject of exclusion? How do we know whether an orphan is contemporary?

On diligent search, there is no real mechanism or method for finding the creator of an image, and the Government have not yet put together a statement that details how this will work. Again, this will be complicated by the fact that there is no central archive or register.

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On the rights of the subject of the photograph, commercial photographs require a signed model release, often with clauses stating the precise terms of use. This is another aspect that needs to be dealt with.

I turn to contractual exclusivity. No photographer will henceforth be able to license an image on an exclusive basis. The image may well be in use elsewhere as an orphan. There are major international implications and chances of liability as a result. An orphan used here in the UK, but registered in the US, could expose the user to huge fines-something up to $150,000 per infringement in California, for example. There is, however, no mechanism to search the US register for images. How will the Government hold the ring when it comes to putting together orphan rights proposals which impact on the photographic profession? The situation is extremely polarised between some creators and those whom they believe will unjustly commercially exploit their photographs.

On these Benches, we have absolutely no quarrel with the cultural sector. We believe that is an entirely appropriate and proper use of orphan works, and, indeed, will resolve some of the long-standing issues that the cultural sector has. The concerns of photographers and photographic libraries revolve almost entirely around the problems of commercial use. Some, such as the Getty library-rather late in the day, I admit-have put forward some extremely interesting ideas, so that a cultural body can be authorised, as an authorised body, for specified purposes, to use orphan works. However, this clause would be further circumscribed in those circumstances. I look forward to what the Minister has to say. I beg to move.

5.30 pm

Lord Howarth of Newport: My Lords, the noble Lord, Lord Clement-Jones, has just made some important points on behalf of photographers-and I do not depreciate them-but in tabling this amendment to leave out Clause 42, he has resorted to the nuclear option. This seems to be a strange resort for a Liberal Democrat. If we accept this amendment, we abandon any attempt to deal with the orphan works problem. As we noted in Committee, the scale of that problem is very significant indeed. It is estimated that there are some 50 million orphan works in museums, libraries and archives spread across the public sector, and the British Library is of the view that some 40 per cent of the material housed in its archives is made up of orphan works.

Under the law as we now have it, hugely time-consuming and expensive searches have to be undertaken or else vast amounts of material are effectively quarantined and left in limbo. Moreover, respectable academic and cultural institutions find themselves operating on the margins of the law. Nor should the House underestimate the economic significance of this. United Kingdom universities generated £59 billion for the UK economy in 2009, more than the pharmaceutical industry or the agricultural sector. We should not hamper the universities in making reasonable and proper use of the assets in their archives and libraries that are of potential scholarly, educational or cultural value-subject, of course, to all the safeguards in the Bill, as improved by the amendments that have been accepted and as it will be fleshed out by regulations.

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I turn to a more general point about the character of this Bill and the way Parliament has had the opportunity to examine it. I am frankly puzzled as to why the Bill was not constructed and designed to show a clear distinction between the treatment of orphan works with little or no commercial value but important scholarly, educational or cultural value, and commercially produced material that is in copyright. It would have facilitated our analysis of it and made it far easier for us to give a fair wind to the parts that everybody in practice has agreed should be supported. But the two elements of the Bill have been so inextricably tangled up with each other that we have found ourselves in considerable difficulty.

I suggest with great respect to the Minister that it would have been much easier for Parliament and the interests that are affected by this legislation had the Government exhibited draft regulations at the same time as they exhibited the Bill or, preferably, a draft Bill. Had they then consulted with all the stakeholders on the whole of this draft legislation together, they would have saved huge amounts of worry and parliamentary time.

Most of our debates on Clause 42 have reflected the legitimate anxieties of interest groups which do not know how their work and their livelihood will be affected and fear an inappropriate use of the large powers sketched out in the Bill. This anxiety, and the time that has been spent debating these fears, was really unnecessary. Should it not be the normal way of proceeding with technical legislation of this kind-on which there is not a party political difference and everybody is feeling their way forward-that all concerned have the opportunity to consider draft material at reasonable length? In that way, everybody would understand where they stood, the Government could listen to advice and we could then have legislation that was properly considered and approved by those who knew most about it. It would be far easier for Parliament to handle.

I do not think it is a good thing to take large, vague powers in primary legislation without at the same time specifying the practical applications that the Government intend, and showing how the regulations will limit an inappropriate use of those powers.

Viscount Bridgeman: My Lords, I say to the noble Lord, Lord Howarth, that it is not particularly constructive, which is a sad reflection, to say that had we had the consultation period, my concerns about a super-affirmative resolution would have been irrelevant. I say to the noble Lord, Lord Clement-Jones, that we will address the subjects of metadata and moral rights in the next amendment, but I would like to associate myself with his very comprehensive remarks on metadata before the Minister replies.

Lord Young of Norwood Green: My Lords, Clause 42 allows for the authorisation of orphan works and extended licensing schemes. This includes a statutory obligation to consult those who are likely to be affected before setting the requirements for authorisation of these schemes. It may not be the perfect way of proceeding, but we believe that it provides an assurance. I tended to agree with my noble friend Lord Howarth, at least

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in the first part of his contribution, that the amendment of the noble Lord, Lord Clement-Jones, was rather a nuclear option.

On the other point made by my noble friend about commercial versus non-commercial, the key point is to ensure fairness to rights holders. It is not an arbitrary distinction between commercial and non-commercial use; it is about ensuring that there is an adequate regulation of organisations running orphan works or extended licensing schemes. The Government are aware that different sectors have different needs, and these provisions will give them the flexibility to tailor the details of licensing schemes so that they are appropriate for different areas. If it proves impossible to devise a scheme for a particular area that does not unfairly disadvantage rights holders' interests, the Government will have the flexibility to not authorise any scheme to be set up in those areas.

The noble Lord, Lord Clement-Jones, also spoke about possible damages in the US. Licences will only affect the UK, so I am advised that there is no possibility of US damages.

For clarity, I should explain that extended licensing does not remove the owner's control of copyright or performers' rights. Rights holders who are members of licensing bodies will be able to influence whether these bodies adopt extended licensing. Rights holders who are not members will be able to opt out by giving notice. The noble Lord, Lord Clement-Jones, has been a champion of photographers' rights; I can reassure him that we have listened to the concerns of photographers and other copyright owners, and I want to make six points.

First, we have met with representatives of the photographic sector, including the Royal Photographic Society. We found the meetings helpful and have tabled amendments to address the concerns raised. We will continue to work with photographers and other rights holders and creators as we develop these proposals through consultation.

Secondly, the orphan works framework incentivises diligent searching, so no financial advantage should be gained from the misidentification of a work as orphan. Deliberate or negligent misidentification must carry appropriate sanctions. Thus, if a person fails to comply with their authorisation, for example by not carrying out a diligent search, they could be subject to regulatory sanctions including a financial penalty and the revocation of the authorisation. They may also be subject to actions for breach of statutory duty. Furthermore, we have outlined the requirements for diligent searching. These are in line with best practice, including the European High Level Expert Group on Digital Libraries. We will develop these further in our consultations, and if we find that there are no means to carry out a suitable search in a sector, that may be a strong indicator that the powers to authorise the use of orphan works should not be used in that sector.

Thirdly, the orphan works provision does not affect the licensing arrangements that photographers have in place and does not affect their ability to grant licences on an exclusive or any other basis in the future. This, I know, was a matter of grave concern to the noble Lord, Lord Clement-Jones. It is unlikely that these

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sorts of managed high-value images will become orphan. Where the rights holder can be identified, whether or not metadata accompany the work, they will be traceable by the diligent searching process. At present, if photographs are used without the consent of the rights holder or creator, they would need to take legal action to gain redress. The difference for the rights holder whose work is wrongly used under an authorised orphan works scheme is that there will be a clear point of contact and a simple process by which they can check for use of their works and claim any money being held for them.

Fourthly, some have argued that the orphan works provisions breach the Berne convention and TRIPS. The clause does not introduce exceptions to copyright or performers' rights, so Article 9 of the Berne convention and Article 13 of TRIPS do not apply. However, we confirm that the introduction of the orphan works provisions do not alter rights owners' ability to license their copyright or performers' rights on an exclusive or any other basis.

Fifthly, we recognise the problems caused by metadata being removed from works. This is something we need to take into account when considering whether digital images should be capable of being licensed under orphan works regulations. We will ask this question in the consultation, but for now I want to make it absolutely clear that the removal of metadata does not render a work orphan. I stress the point. It is now mandatory for treatment of royalties to be regulated in regulations permitting the use of orphan works. We envisage that the licensing of orphan works will be at the market rate where one exists. In any case, we intend that as far as possible, rights holders will get a similar return regardless of who licenses their work. This will guard against the unfair distortion of existing markets. These provisions will allow licences to be granted only in certain specific circumstances. There will be no change to privacy law, no change to contract law, and no change to the existing law on moral rights.

Sixthly, the Government are aware that different sectors have different needs. These provisions give us the flexibility to tailor the regulations so that they are appropriate for licensing different types of copyright works or performers' rights. As explained in Committee, if we find through consultation that certain types of works such as contemporary photography cannot be included in this framework without causing harm to rights holders, we will have the flexibility to exclude them, which addresses another point of concern expressed by the noble Lord, Lord Clement-Jones. I also want to emphasise that we have addressed concerns about the breadth of these powers by introducing a requirement that the first exercise of powers under proposed new Sections 116A and 116B of the 1988 Act and the equivalent provision for performers' rights is to be subject to the affirmative procedure.

Finally, I hope the flesh that we have put on these proposals will give the noble Lord the assurances he asked for at Second Reading and in Committee. I hope he will also agree that we have struck the right balance between making it clear in the Bill how these powers are to be exercised while not pre-empting the outcome of the existing consultations that will precede the

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regulations. In the light of these assurances, I hope that the noble Lord will feel able to withdraw his amendment.

5.45 pm

Lord Clement-Jones: I thank the Minister for that very comprehensive and somewhat reassuring reply, although I shall come back on a number of points. I thought that the noble Lord, Lord Howarth, was going to give me a hard time in his speech, but in the end I admit that I ended up agreeing almost completely with his comments about the way in which this clause could have been drafted. As in the music hall joke, we would not have started from here if we had had half a chance. It is unfortunate, but this is the clause we have. The nuclear option is not really a nuclear option because I do not plan to divide the House on this. However, it was fairly successful on the last occasion in the debate on whether the clause should stand part of the Bill which elicited quite a lot of amendments from the Government. I hope that the Government will look further at this, and certainly at some of the issues they will consult on, particularly in the light of our debates.

There is absolutely no question in my mind about the benefits of this to universities, cultural and education institutions. It is a common factor across the House. It is about particular sectors, and I am glad to say that the Minister has picked up on that entirely. We are not trying to destroy the whole concept, but there are some tricky economic factors at work here, and in the end it will depend on some extremely careful and sensitive consultation.

Even though both Ministers at this stage and in Committee have protested that this is not a question of commercial versus non-commercial, the vast bulk of the people reading this clause believe that there is a very strong distinction between them. The Minister says that it is a matter of fair regulation and appropriate licensing, not a question of commercial and non-commercial. But when the Minister starts consulting on orphan works, he will find that that is very much the division. I take enormous comfort from the fact that he has said that if it proves impossible in the course of negotiations to find an appropriate scheme that protects a particular sector-photography is one that I am particularly concerned about in this context-the schemes will not be authorised. All I would suggest to the Minister is that "contemporary photography" is not necessarily the right term because it is very difficult to establish. It may be better to consider "commercial photography" as being a particular sector that might be ripe for exemption.

I turn to the question of US damages. My view is that in many cases, US law is extra-territorial, so when the consultations are taking place over a scheme that involves commercial photography, it would be extremely wise for people to check the extra-territoriality of that scheme. I also warmly welcome the way in which there will be diligent searches, that there will be sanctions, and that best practice will be founded on certain key work that has already been done.

I do not understand one comment from the Minister about the effect of the ability of photographers to

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grant exclusive licences. I do not know whether that is the impact of statute overriding contract. As far as I can see, nothing in the Bill states that exclusivity is overridden and therefore a photographer is not liable in circumstances where, against their own contract, they have been forced to grant a licence over an orphan work. I do not know what the legal situation is, and again, just as in the international context, in the course of the consultations that the department will be carrying out, it also needs to be bottomed out. I say that because over and over again, the whole area of exclusivity is a source of considerable concern to photographers. I refer also to the rights of those who are the subjects of photographs and who have given their image rights for certain purposes and not for others.

The Minister said that it was unlikely that high-value photographs would become orphan works. I do not know the answer to that; it is pure speculation, if I may say so. The Minister again makes a legal point when he says that he does not believe that the orphan works proposals are in breach of the Berne convention because they do not introduce exceptions to copyright. I hope that that also will be soundly bottomed out when the time comes.

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