Thursday, May 08, 2008

Orphan Works Bill: Legal Opinions Vary

Two key photo industry attorneys, Nancy Wolff and Carolyn Wright, weigh in on 2008 Orphan Works legislation in an article that just appeared in Media Post's Selling Stock, a online news magazine that reports on the stock photo industry. Selling Stock has generously granted SAA permission to post the article here.
[We have added bolding]

Orphan Works Bill: Legal Opinions Vary
Posted to Selling Stock, May 7, 2008 by Julia Dudnik Stern, Managing editor/reporter

According to Nancy Wolff, the legal counsel of the Picture Archive Council of America, the congressional version of the Orphan Works Bill of 2008 is an improvement. Wolff specializes in intellectual-property and digital-media law as a partner at New York-based law firm Cowan, DeBaets, Abrahams & Sheppard and says legislators listened and dealt with issues raised by various affected groups.

By contrast, Atlanta attorney Carolyn Wright and author of Photographer's Legal Guide thinks both the House and Senate versions of the bill pose an extreme threat to copyright owners. "While the House version is not as bad as the Senate's, and both are an improvement over the 2006 bill, we still should work to oppose both of them-or at least attempt to make significant revisions," said Wright, a lawyer with big-firm litigation experience, a professional photographer and the woman behind the popular PhotoAttorney blog.

Among the problems Wright sees in the proposed law is the potential availability of an orphan-works defense to commercial users. She quotes the U.S. Copyright Office's orignal announcement, which said the purpose of new legislation was to address the concern that the uncertainty of orphan-works ownership might needlessly discourage their use in new productive efforts, such as making works available to the public. "This can be accomplished without giving advertisers and merchandisers free reign to commercially use photographs," said Wright, who thinks that modifying the fair-use statute would be a better way to address many of the concerns that have purportedly prompted the orphan-works proposal.

Another issue characterized by Wright as major is the determination of reasonable fees, which the new law mandates be paid to the copyright owner, if found. "If the infringer and the photographer disagree on what is reasonable compensation, the photographer will have to file suit to pursue higher payment," she explains, "but the photographer will not have the potential benefit of having costs and attorneys' fees paid if the court determines that the orphan-works defense has been established.

Under the current law, courts can award costs and attorneys' fees, based on variety of factors." Since the filing fee of $350 is arguably more than some reasonable license fees, Wright thinks such lawsuits are likely to be cost-prohibitive, forcing photographers to accept lower fees. "Each bill's mandate for a study on remedies for small copyright claims won't help photographers with these problems in the interim," she elaborates.

Wright agrees with the Stock Artists Allance's analysis of the legislation and supports the organization's proposals for amendments. The American Society of Media Photographers, the Graphic Artists Guild, the Illustrators Partnership of America and Advertising Photographers of America are among other organizations that have issued formal statements. ASMP has endorsed the House version of the orphan-works bill, the Guild is taking a neutral position and the IPA and APA vehemently oppose both versions of the legislation.

PACA is not opposing the bill. Wolff is currently working with a Washington-based attorney to suggest modifications to some of the language. Overall, the view of PACA's legal counsel is positive and pragmatic. She said: "Taking an extreme position can lead to Congress saying, 'We are never going to make you happy, so we are not even going to listen to you.'" Wolff also thinks that concerns over upcoming leadership changes are valid and the bill may face a tougher audience if delayed until the next session of Congress.

Among improvements introduced since the 2006 proposal, Wolff points to the increased requirements on users, who now have to file prior notice with the U.S. Copyright Office and conduct a reasonably diligent search for the copyright owner. The burden of proving due diligence is on the user, should a lawsuit ever come to pass. The House bill also limited the previously over-broad safe-harbor provision.

According to Wolff, the provision for reasonable compensation is a good thing. "Companies that fail to negotiate compensation in good faith and within a realistic timeframe can lose the orphan-works defense," she said. Addressing the most-often raised criticism of the bill, Wolff points out that "what constitutes 'reasonable compensation' is not an orphan-works problem, but a damages and valuations problem you run into when trying to negotiate" licensing fees for image use or court-awarded damages for copyright infringement.

The judgment of what is reasonable will be up to the courts, which will take into consideration market conditions. "Microstock outlets license images for $1, but if your work is only licensed at traditional prices or is rights-managed, the court will consider that," Wolff said.

The proposed bill could also offer photographers the opportunity to pursue copyright infringement in a small claims court. While some consider this an ineffective venue, Wolff thinks it goes a long way toward limiting photographers' expenses. "The legislators recognize that if you are going to limit remedies by depriving copyright owners of statutory damages, you also have to limit the owners' expenses in trying to collect."

Wolff and Wright agree that legal costs of copyright enforcement are often prohibitive. Both attorneys also share other orphan-works concerns, such as the role of privately developed databases that can monopolize the registration process and enforce high fees. In addition, both see the legislation having far-reaching effects if passed.

Wright says that specific applications will only become known through the development of case law and/or future amendments to the statute, which can take years. "Similar to the challenges of determining whether a use qualifies as fair use, I and other attorneys will have to tell photographer clients that we don't know what we can expect to recover for infringements, and that we can't represent them without charging our expensive hourly fees," she elaborates.

Wolff describes a series of immediate but indirect consequences, such as photographers and stock agencies working with industry groups to define best practices. She also points to a higher burden of being found, suggesting an increasing need for registering work, new databases and business models. Wolff hopes that the PLUS Coalition can offer technical assistance.

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1 comment:

Lloyd Shugart said...

1. Lloyd Shugart - May 30, 2008

There are many issues with the law as proposed…mainly it just further creates hardship and litigation…….the only reason it won’t overwhelm the Fed Court system is that it will not be financially feasible to pursue protection of the copyrights, because the bill guts any damages and the attorney fees. As it stands now it will promote USE FIRST, and ONLY AK FOR PERMISSION if you get caught.

The only true way to slow the creation of Orphans issue is MANDATORY ATTRIBUTION, since our laws lack any moral rights, and Morals can’t be legislated to any effect. At least with Attribution, and google the living Artist will be able to be found. As Tammy indicates in her letter to congress the current proposal will only create further morass.

Lloyd Shugart
Unintended victim


full copy of Tammy’s letter here

I read your letter on a Techdirt #12 posting, and I must say that of all of my readings on this issue. Your letter is on point of the real effects of this legislation, as it relates to creators, especially the visual artist.

I am the POSTER CHILD for why this is bad for the copyright creators.

I come from an experience that is real. I am in year 3 of a copyright litigation that, my legal bill now exceeds $500,000.00 USD.

US copyright laws currently lack “MORAL RIGHTS”…. before any “ORPHAN WORKS LAW” should be considered the copyright laws need to address at least “Mandatory Attribution” bc I don’t think that moral rights can be enforced by law.

My case involves thousands of images that were marked with my “CMI” embedded into each and every image, with metadata….client removed said data, and then licensed my images to hundreds of third parties who then licensed my images to thousands of additional third parties under their “Affiliate Marketing Programs”

So if you are an artist and are concerned with your artwork then you better be concerned with this proposed legislation, and the impacts it will have on your ability to sustain yourself.

As an aside, although I was the copyright owner, I was the defendant in this lawsuit. I was forced to incur $500,000.00 USD in legal fees to protect my copyrights. As a result I now have thousands of images being used by thousands of people whom are all using my images to make money….they have not paid one red cent for these assets…I can not pursue each and every one of them….and those that I do can claim as a defense that the work is either in public domain or an orphaned work, or that it was an innocent infringement.

How many readers have the kind of USD it take to protect your copyrights, even under the laws as they now stand? If the orphan works law passes as now proposed it will cost more to protect your rights both in real dollars and in your personal time, and emotions.

Propet USA v. Lloyd Shugart WD WA. Federal Court