By Jacqueline Clover and Ezra Steinhardt

On September 13, 2012, the European Parliament approved the text of a new draft Directive that sets out permitted uses of orphan works (the “Directive”).  However, the law’s text — which was informally agreed between the Parliament and European Council earlier this summer — has yet to receive the Council’s formal approval, so remains a draft for now.

Once law, the Directive will enable certain public institutions, such as archives and museums, to convert orphan works (that is, works protected by copyright, whose owners cannot be located or identified) to digital formats, in order to make them more accessible to the public, and to use them for other limited non-profit purposes (such as selling them in gift shops to fund further efforts in order to find and digitise other orphan works).

Before being permitted to digitise and make such works available, institutions will be required to demonstrate that a work (a book or film, for example) is an “orphan” by performing a diligent, good faith search for rightsholders in the EU Member State where the work was first published (or broadcast).  If the search fails to find a rightsholder, then the work will become an “orphan” under the Directive, and the other Member States will also be required to recognise the work as an orphan.

The Directive provides only limited guidance as to what constitutes a “diligent” and “good faith” search.  Instead, it envisages that Member States will designate national organisations to verify searches performed in their jurisdictions as sufficiently “diligent”.  (The UK Government has already confirmed its support for a new independent authorising agency to verify searches performed in the UK.)

Rightsholders, for their part, will be able to come forward and identify themselves to put an end to a work’s orphan status, and to claim “fair remuneration” for the prior use of their work as an orphan under the Directive.  Details of how rightsholders will be compensated, however, are omitted from the Directive, and will need to be worked out separately by each Member State.