Report (3rd Day)
Digital Economy Bill [HL]
Lord Young of Norwood Green (Government Whip (technically a Lord in Waiting, HM Household); Labour)
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 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 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 regulations. In the light of these assurances, I hope that the noble Lord will feel able to withdraw his amendment.