Orphan works and collective management model, a bad legislative proposal Colombian style*

by Digital Rights LAC on June 12, 2013

Obras Huerfanas_Colombia

Like in the rest of the continent, orphan works in Colombia are not a public policy concern. It is a discussion subject in expert circles but has not been subjected to legislative proposals analysis. However, surprisingly we find that the collective management system reform, which is currently taking place in Congress, seems to approach the issue and proposes a fragmentary regulation of it.

By Carolina Botero, Fundación Karisma.

The concept “orphan works” identifies works for which the owner of the economic rights of copyright cannot be known or located. The problem arises when someone wants to use the copyrighted work and cannot obtain the authorization required. Over time the works on this condition are accumulated and its closing end up becoming a major barrier to cultural heritage circulation and reuse by human societies. This particularly affects institutions dealing with this heritage such as museums, archives and libraries.

Like in the rest of the continent, orphan works in Colombia are not a public policy concern. It is a discussion subject in expert circles but has not been subjected to legislative proposals analysis. In fact, up to date, no doctrinal or academic study addresses the problem locally. However, surprisingly we find that the collective management system reform, which is currently taking place in Congress, seems to approach the issue and proposes a fragmentary regulation of it.

Colombia is now facing a far-reaching reform of the collective management system of economic rights which originated in complaints made by a major concert entrepreneur on the way Sayco (main collecting society of copyright in the Colombian music industry) administered concert authorizations. The businessman accused the organization of informal practices and exorbitant rates. These complaints led to an avalanche of protests and claims aired through the media. The National Copyright Directorate, the authority within the Ministry of Interior that monitors these entities, initiated an audit process that has brought not only substantial changes in the entity’s management, but also in a law reform system process. In this framework, Congress handles of the draft law 202 of the House of Representatives that for these days will face its second hearing.

The essential idea behind the collective management is that members confer a mandate to the entities to charge and collect the money from the economic exploitation of the work (these entities are classified according to the types of works and licensing rights). Collective management streamlines the collection and distribution of this economic right.

In the world it is usual that these systems of collection and economic rights’ management are private. The entities that administer them are usually private societies and, therefore, their collection is limited to administering a catalog of works and the fee collected is distributed among its members. That’s the Colombian model. Thus, we have a private nature collector distributing its income to its members.

This entities´ practice, which only manages their catalog, is common to receive fees by works they cannot identify or whose owner cannot be located. Sometimes these are problems on how licensees report the information of the works they use and that serves to make the distribution. Then, these entities might raise fees by works from its catalog without being able to identify to whom they correspond or even if the works is in their catalog.

Evidently, management entities collect money for orphan works that generates them administrative difficulties. Apparently the practice is to distribute among its members such revenues after a certain number of years. This is alone the scopte that the system reform proposal seems to be addressing in Article 39.

Article 39, Project 202/12 of the House: Distribution on works or services of unidentified holders. The remuneration over works, artistic interpretations and performances, or phonograms of unidentified holders must remain on reserve for a term that shall not be less than five (5) years. Upon termination of the previous term without identifying the owner, the remuneration for such works, artistic interpretations and performances, or phonograms will increase the values to be distributed among members. Paragraph. For a work, artistic interpretation or performance, or phonogram can be considered as unidentified and in order to allow its publicity and to achieve its full identification, societies must make available, by the most expeditious means, to its members, represented and general public, lists of works, artistic interpretations and performances, or phonograms of unidentified owner (Text for the second hearing published in Gaceta 237 of 2012).

Undoubtedly, the article covers orphan works but does so only by addressing the issue of fees received improperly or incorrectly by societies (either by a mistaken fee outside the governed catalog or because although the work is part of its catalog, it is not sufficiently identified to determine the owner). This does not include the problem in a comprehensive manner for proposing a licensing model by the collecting societies on orphan works similar to the existing model in the Nordic countries, Hungary or, more recently, in France.

No provision is made in the draft law 202 on a mechanism by which the public, the Colombians, can use orphan works, there is no detailed provisions on how the owner’s search should be done and much less mechanisms to safeguard non-member’s rights. The way this project addresses the issue unknown the discussion that should be given over the orphan works’ problem. It is not raises a comprehensive proposed solution and focuses on only one of these aspects, considering natural that a private entity does not verify the funds’ ownership before distributing them among its members.

The project 202 of 2012 faces problems embedded in the collective management system, while seeks to recover its credibility, offers transparency tools, and shows an interesting reaction to the crisis. In this context, the right thing would be to remove this article and require to societies responding by the distributed fees, opening to public discussion their action vis-à-vis those funds whose owner cannot be identified. Only then the norm will make sense with the context in which the reform is moving forward. Now, in relation to orphan works, what should be done is to open the debate to the Colombian society, so that the problem can be assessed and the model and mechanism to address it can be decided.

If policy makers in Colombia were seriously thinking the issues of orphan works they should be looking at how this is dealt in other jurisdictions, the models that are being developed to face the problem, and especially they will be evaluating the one that uses Collecting Societies as the core. With the intention to contrast the current Colombian situation with the existing trends in the world this document will present a general landscape on those current legislative models.

Regulatory models to recover orphan works

In recent years we have seen various stakeholders advancing on proposed solutions that allow use of orphan works. David Hansen, who is part of the proposed copyright for digital libraries at the University of Berkeley, has identified at least 4 models:

1. A first model is based on the user interested in reusing the work, which performs a diligent search of the owner. The law proposes that in these cases the potential liability should be limited if such a search complies with detailed requirements. This legal model is advancing in the United States and is the pillar of the proposed European Directive on orphan works that would benefit public organizations such as libraries.
2. A second model is the one that implements a centralized copyright board that grants authorizations of specific reuses of works to users. Canada pioneered in implementing this model, while other countries such as Japan, South Korea, England and India are analyzing it.
3. The third model refers to a system that proposes that the search is made for a licensing body as the one dealing with collective management of economic rights in the Nordic countries. It was also the model used in a recent legislative reform in France.
4. Professor Hansen refers to the fourth model as a hybrid that combines different participant groups at diverse stages. This model includes systems that distinguish mechanisms of mass digitization and, in general, mass usages from those facilitating the individual uses of orphan works. Such systems are under discussion in England.

The license model through collective management

I will refer in this document to the third Hansen’s model that have being implemented in Hungary, the Czech Republic and Nordic countries: Norway, Sweden, Denmark, Iceland and Finland. Recently a version of this model was also developed in France.

The licenses offered by collecting societies on orphan works cover specific uses “where the high costs of obtaining rights are thought to restrict socially beneficial uses”, such as educational reproductions, cable transmissions, uses for the benefit of users with disabilities, and the re-use of archived broadcasts. Accordingly to the country, there are other uses of the works covered.

In this system, the Nordic countries rely on existing agreements for the collective management of economic rights with specific entities. What it has been done in these countries is to legislatively expand the scope of collective management organizations, allowing them to represent owners who are non-affiliated. The system is efficient since entities authorize corresponding uses, releasing the consumer from liability for unauthorized use. The key feature of the law is that establishes a series of provisions to regulate the relationship of the entity with non-members, who, of course, might be put in disadvantage. However, according with Hansen the system has the flaw of being limited by the extent of the rights that the management entity provides.

In these cases, finding the owner rests on the management entity and not the user. Thus, the collecting societies should take measures to identify the owner after receiving the license application and fee. Since this search is made after receiving the money, Professor Hansen reiterates that legally collecting societies should treat members and non-members equally in relation to fees. On the other hand, he recognizes that this situation can generate a potential conflict of interest among collecting societies when the owner cannot be identified after a specified time. In such cases funds generated by the unclaimed works revert to the entity. The conflict can occur due to the little incentive the scheme offers to the collecting entity in searching for its non-members. It is worth mentioning that the French system allows, after a few years, free use of such works to libraries.

The licensing model through collecting societies, like any other system designed for orphan works, has as main purpose that unclaimed works can be reused in the creative process. That is, it seeks to promote the circulation of knowledge in a current legal framework that creates barriers. The designed mechanisms add the solution into existing standards, forcing us to think in an ecosystem that, on one hand, establishes definitions, determines responsible parties, rights and actors, as well as the different conditions for searching prospective owners and, on the other hand, institutes the definition and, if appropriate, a possible eventual compensation management.

Finally let me insist that in Latin America the subject has not gone further from being a concern in specialized circles. It is still far from being a legislative concern. Only in Argentina there is a law that states an exception for editing after the author has died, under this umbrella some aspects of the orphan works are dealt by. On the other hand as we have seen the Colombian case is nothing like this, in fact there is a proposal that includes elements of the third Hansen’s model inside the collective society’s legal reform, but it is not presented under the orphan works frame and the consequences of not doing so are so perverse that it must be withdrawn from the draft and a serious discussion should be taking place in the Colombian society.

*The first version (shorter) of this article was published in “Open Business Latin America & Caribbean”.

Carolina Botero es directora de Derecho, Internet y Sociedad de la Fundación Karisma
E-mail: carobotero (at) gmail.com