Out-of-commerce regime does not solve access to 20th century heritage

The European Commission is reviewing the Copyright in the Digital Single Market  Directive 2019/790 (CDSM Directive). This may be followed by updates to the Directive based on the evidence gathered. The out-of-commerce works (OOCW) provisions in the CDSM Directive are crucial to the dissemination of cultural heritage. This post provides a critical look at what the OOCW provisions are doing in practice in the cultural heritage sector, on the basis of input gathered through the Europeana networks. We conclude that the OOC-regime does not (yet) achieve its intended goals.

The out-of-commerce works regime

Cultural heritage institutions (CHIs) across the EU have large collections of works that are no longer available on the market. These collections usually have no commercial value, but do have historical, scientific, and cultural value. They are also often orphan works as no rights holder is known or can be located. With the Orphan Works Directive (2012/28) not having provided a solution for their dissemination, they remain locked away from the public or made available at the risk of the CHI (see our 2023 blogpost for insights into the failure of the Orphan Works Directive).

The CDSM Directive introduced the most recent attempt to enable CHIs to make these – mostly twentieth century – works legally available to the public. Articles 8 to 11 of the Directive introduced a framework tailored for OOCW. Under this regime, a work is deemed out-of-commerce if it can be presumed in good faith that the work is unavailable to the public through customary channels of commerce after a "reasonable effort" assessment. A “reasonable effort” addresses the main failure of the Orphan Works Directive, which required a prohibitive ‘diligent search’ for rightsholders.

The regime introduces two options: a sufficiently representative Collective Management Organisations (CMOs) can grant non-commercial licences to CHIs that extend to non-mandated rightholders (an OOCW ECL). A statutory fallback exception comes into play if there is not such CMO. This exception permits CHIs to make OOCW available on non-commercial websites. Regardless of the option, a registration in the European Union Intellectual Property Office (EUIPO) OOCW database is required, and a 6 months waiting period is to be observed before the work can be made available. Rightsholders retain an "opt-out" mechanism, allowing them to exclude their works from either the licensing schemes or the exception at any time, even after the work has been made available. 

The 20th century black hole hasn’t closed

In 2015, the Europeana Foundation published a report that demonstrated the existence of a 20th century blackhole in its collections: collections that consist of works dating from the 20th century are available online to a much lesser degree than collections from the periods before or after the 20th century. More than ten years later a similar analysis shows that while there has been an increase of available heritage, the distribution of this data broadly follows the same pattern as in 2015. Materials from the second half of the 20th century (1950-1999) continue to have a particularly low representation (10.43%) within the whole Europeana.eu dataset.

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Statistics

2.7 million works have been registered to date in the EUIPO Out-of-Commerce Works Portal since the adoption of the Directive in 2019 and its subsequent transposition These registered works can be made available online under the OOCWregime. This seems like a large number, it is far from being representative, when considering how many libraries, archives and museums exist across the EU and how many works could be made available under the regime. 

The numbers show that only certain countries, and certain institutions within those countries, are successfully using the provisions. 92% of all registered works are concentrated in just three Member States: Slovakia (40.1%), the Netherlands (27.2%), and Czechia (24.9%). Furthermore, only 16 Member States have registered at least one work in the registry to date, and 11 have no registration at all. 

While the Directive prioritises the "license-first" model, its fallback exception accounts for approximately one in every three registrations in the EUIPO portal. The usage of the exception is again heavily concentrated: institutions from the Netherlands account for over 76% of all uses of the fallback exception. This Knowledge Rights 21 post provides insight why that is the case. 

Despite concerns regarding rights-holder control, the data shows that only 394 rights holders have opted out of these available works - a rate of just one opt-out for every 7,500 registered works. Additionally, the EUIPO has also noted six general opt-outs, that is, rights holders who have pro-actively opted out their entire repertoire. Looking at the public information on license fees, the licenses for the works in the three leading countries cost roughly 1.2 million euros in public sector funding per year. 

The experience of the cultural heritage sector

5 years since the latest transposition, it has become clear that the OOCW-regime is not working properly in most jurisdictions. From conversations with colleagues who have looked into this across countries, the reasons vary.

Bottlenecks in licence negotiations

The system currently establishes that if there is a sufficiently representative CMO of the type of material in question, the exception does not apply, regardless of whether the licence is successfully concluded or not. However, some negotiations have led to a dead end because of little interest from CMOs who do not have anything to lose by not granting a license, and little to gain by granting it. 

In many cases, granting the license has not been officially refused – Sweden being a noteworthy exception – but bringing forward conditions that are impracticable by a CHI essentially leads to the same result. For example, some negotiations have taken up to four years, which is something that only large CHIs can afford to undertake. The system should not only work for national libraries and national archives alone.

Historians, museum curators and librarians who embark on the digitisation of OOCW understand the materials, and the value they bring to society. The fact that some OOCW cannot be disseminated because a CMO that does not represent most or any of the works in question decides it to be so, feels discouraging and alienating to these professionals, and takes away their trust in EU legal solutions.

Legal uncertainty around representativity

Many works have multiple layers of copyright and related rights. Audiovisual works and musical works are the most well-known examples in rights clearance complexity, but even a monograph has multiple copyright-protected contributions, such as text, images contained in it, the edition and cover design, etc. 

These rights are managed separately by different CMOs, which means that a CHI might need to negotiate with two, three or more CMOs for a single work or collection. If these organisations are not able to come together in the negotiation, this also means that the CHI might have to pay multiple fees, and manage different conditions for the same type of materials.

Failed and non-existing stakeholder dialogues

For many countries, ECL or presumptions of representation are a new system. Most CHIs also have little experience in obtaining licenses from CMOs, as their services do not offer solutions for most clearance needs. When a CHI is left alone to approach a CMO (by rightly identifying one which is ‘sufficiently representative’ in the specific case), and to negotiate a license, there is an immediate deterrent effect. This is particularly the case if the CMO is not publishing upfront a licensing offer for OOC. 

To combat this, the CDSM Directive introduced in article 11 an obligation for Member States to set up stakeholder dialogues on OOCW ‘ (...) to foster the relevance and usability of the licensing mechanisms (...)’. However, they have not taken place in most Member States, and the parties are left alone to agree on various conditions. 

The way forward

Just like the Orphan Works Directive, the OOCW regime has failed to support the making available of cultural heritage from the twentieth century. We believe that the CDSM Directive needs to be modified to establish that sufficiently representative CMOs are obliged to offer suitable licences covering the needs and specificities of CHIs, and that these are made easily available on the market, for all of the types of materials for which they are representative. These should be made transparent to the public. Failing to do that, CHIs should be able to rely on the exception for OOCW.

There are many benefits to such an approach:

• It would make CMOs more proactive in proposing licenses,

• CHIs would be much more comfortable approaching a CMO given the transparent conditions

• CHIs would be able to operate according to their processes and organisational objectives, because more adequate conditions would be in place.

• CHIs would know when the exception applies, by having more clarity to the representative of the CMO thanks to the license offered.

The obligation to publish licensing conditions upfront is not new in EU lawmaking. Article 5 of the CDSM Directive on the ‘use of works and other subject matter in digital and cross-border teaching activities’ already establishes the obligation to offer suitable licenses if the exception or limitation to copyright does not apply.

In addition to that, we would welcome a clarification of what fair conditions fall under ‘suitable licenses’, which should include: 

• a reasonable fee adapted to the public sector, 

• no subsequent payments for works that have already been paid for once, and 

• the possibility of disseminating the works outside of the Member State.

These changes would substantially increase CHI's ability to digitise and make available works that are no longer in commerce but hold great social, political and cultural value - progressively reducing the 20th century black hole.

Based on the earlier Europeana post.

Photo credit: Early depiction of a ‘Dutch telescope’ from the “Emblemata of zinne-werck” (Middelburg, 1624) by Adriaen van de Venne