US Copyright office proposes limits on damages, injunctions, for Orphan Works, contradicting TPP language

The US Copyright Office has proposed limitations on damages and injunctions, when "orphan" copyrighted works are infringed. The report, released June 4, 2015, and available here, includes a recommendation for new amendments to the US copyright law, to expand access to orphan works, in order to exploit opportunities for "the diffusion of creativity and learning." The Copyright Office "concludes, as it did previously, that the orphan works problem is widespread and significant," noting "anyone using an orphan work does so under a legal cloud, as there is always the possibility that the copyright owner could emerge after the use has commenced and seek substantial infringement damages, and injunction, and/or attorney's fees." In presenting its proposal, the Copyright Office said:

A limitation on liability addresses the needs of both commercial and noncommercial actors alike, and appropriately takes into account global developments. It has the benefit of providing considerable legal certainty to those users who want or need it for certain projects, while being fully compatible with fair use. In sum, the proposed orphan works legislative framework would do the following:

* Establish a limitation on remedies for copyright infringement for eligible users who can prove they have engaged in a good faith diligent search for the owner of a copyright and have been unable to identify or locate him or her;

. . .

* Limit monetary relief for infringement of an orphan work by an eligible user to "reasonable compensation" – the amount that a willing buyer and a willing seller would have agreed upon immediately before the use began;

* Bar monetary relief for infringements of orphan works by eligible nonprofit educational institutions, museums, libraries, archives, or public broadcasters, for noncommercial educational, religious, or charitable purposes, provided the eligible entity promptly ceases the infringing use;

* Condition injunctive relief for infringement of orphan works by accounting for any harm the relief would cause the infringer due to its reliance on its eligibility for limitations on remedies;

* Limit the scope of injunctions against the infringement of an orphan work if it is combined with "significant original expression" into a new work, provided the infringer pays reasonable compensation for past and future uses and provides attribution;

But wait, there is a problem. In still secret negotiations, the USTR has proposed sweeping provisions on damages, injunctions and court costs that run counter to the Copyright Office proposal for orphan works.

Here are provisions in the legislation proposed by the Copyright Office dealing with limitations on damages, costs and injunctions.,

Orphan Works Act of 20__

__th CONGRESS __ Session

AN ACT
To provide a limitation on judicial remedies in copyright infringement cases involving orphan works.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Orphan Works Act of 20__".

Sec. 514. Limitation on remedies in cases involving orphan works

(a) DEFINITIONS.

. . .

(3) REASONABLE COMPENSATION.--The term "reasonable compensation" means, with respect to a claim of infringement, the amount on which a willing buyer and willing seller in the positions of the infringer and the owner of the infringed copyright would have agreed with respect to the infringing use of the work immediately before the infringement began.

. . .

(c) LIMITATIONS ON REMEDIES.--The limitations on remedies in an action for infringement of a copyright to which this section applies are the following:

(1) MONETARY RELIEF.--

(A) GENERAL RULE.--Subject to subparagraph (B), an award for monetary relief (including actual damages, statutory damages, costs, and attorney's fees) may not be made other than an order requiring the infringer to pay reasonable compensation to the owner of the exclusive right under the infringed copyright for the use of the infringed work.

(B) FURTHER LIMITATIONS.--An order requiring the infringer to pay reasonable compensation for the use of the infringed work may not be made under subparagraph (A) if the infringer is a nonprofit educational institution, museum, library, archives, or a public broadcasting entity (as defined in subsection (f) of section 118), or any of such entities' employees acting within the scope of their employment, and the infringer proves by a preponderance of the evidence that--
(i) the infringement was performed without any purpose of direct or indirect commercial advantage;
(ii) the infringement was primarily educational, religious, or charitable in nature; and
(iii) after receiving a notice of claim of infringement, and having an opportunity to conduct an expeditious good faith investigation of the claim, the infringer promptly ceased the infringement.

(C) EFFECT OF REGISTRATION ON REASONABLE COMPENSATION.--If a work is registered, the court may, in determining reasonable compensation under this paragraph, take into account the value, if any, added to the work by reason of such registration.

(2) INJUNCTIVE RELIEF.--

(A) GENERAL RULE.--Subject to subparagraph (B), the court may impose injunctive relief to prevent or restrain any infringement alleged in the civil action. If the infringer has met the requirements of subsection (b), the relief shall, to the extent practicable and subject to applicable law, account for any harm that the relief would cause the infringer due to its reliance on subsection (b).

(B) EXCEPTION.--In a case in which the infringer has prepared or commenced preparation of a new work of authorship that recasts, transforms, adapts, or integrates the infringed work with a significant amount of original expression, any injunctive relief ordered by the court may not restrain the infringer's continued preparation or use of that new work, if--

(i)the infringer pays reasonable compensation in a reasonably timely manner after the amount of such compensation has been agreed upon with the owner of the infringed copyright or determined by the court; and

(ii) the court requires that the infringer provide attribution, in a manner that is reasonable under the circumstances, to the legal owner of the infringed copyright, if requested by such owner; however

(iii) The subsection (2)(B)(i)-(ii) limitation on injunctive relief shall not apply if--

(I) the owner of the work is also an author of the work;

(II) the owner requests such injunctive relief; and

(III) the owner alleges, and the court so finds, that the infringer's continued and intentional preparation or use of the new work would be prejudicial to the owner's honor or reputation, and this harm is not otherwise compensable.

(C) LIMITATIONS.--The limitations on injunctive relief under subparagraphs (A) and (B) may not be available to an infringer or a representative of the infringer acting in an official capacity if the infringer asserts that neither the infringer nor any representative of the infringer acting in an official capacity is subject to suit in the courts of the United States for an award of damages for the infringement, unless the court finds that the infringer--

(i) has complied with the requirements of subsection (b); and

(ii) pays reasonable compensation to the owner of the exclusive right under the infringed copyright in a reasonably timely manner after the amount of reasonable compensation has been agreed upon with the owner or determined by the court.

(D) RULE OF CONSTRUCTION.--Nothing in subparagraph (C) shall be construed to authorize or require, and no action taken under such subparagraph shall be deemed to constitute, either an award of damages by the court against the infringer or an authorization to sue a State.

(E) RIGHTS AND PRIVILEGES NOT WAIVED.--No action taken by an infringer under subparagraph (C) shall be deemed to waive any right or privilege that, as a matter of law, protects the infringer from being subject to suit in the courts of the United States for an award of damages.

(d) PRESERVATION OF OTHER RIGHTS, LIMITATIONS, AND DEFENSES.--This section does not affect any right, or any limitation or defense to copyright infringement, including fair use, under this title. If another provision of this title provides for a statutory license that would permit the use contemplated by the infringer, that provision applies instead of this section.

(e) COPYRIGHT FOR DERIVATIVE WORKS AND COMPILATIONS.--Notwithstanding section 103(a), an infringer who qualifies for the limitation on remedies afforded by this section shall not be denied copyright protection in a compilation or derivative work on the basis that such compilation or derivative work employs preexisting material that has been used unlawfully under this section.

(f) EXCLUSION FOR FIXATIONS IN OR ON USEFUL ARTICLES.--The limitations on remedies under this section shall not be available to an infringer for infringements resulting from fixation of a pictorial, graphic, or sculptural work in or on a useful article that is offered for sale or other commercial distribution to the public.

(g) TECHNICAL AND CONFORMING AMENDMENT.--The table of sections for chapter 5 of title 17, United States Code, is amended by adding at the end the following:

514. Limitation on remedies in cases involving orphan works.
(h) EFFECTIVE DATE.--
(1) IN GENERAL.--The amendments made by this section shall take effect on January 1, 20__.

This are some relevant provisions in the May 16, 2014 version of the TPP IP Chapter (for the whole chapter, see: http://keionline.org/node/2108) that directly contradict the Copyright Office proposals:

Article QQ.H.4: {Civil Procedures and Remedies / Civil and Administrative Procedures and Remedies}

1. Each Party shall make available to right holders155 civil judicial procedures concerning the enforcement of any intellectual property right covered in this Chapter.

2. Each Party shall provide156 that in civil judicial proceedings its judicial authorities have at least the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of an infringement of that person's intellectual property right by an infringer who knowingly, or with reasonable grounds to know, engaged in infringing activity.157

3. At least in cases of copyright or related rights infringement and trademark counterfeiting, each Party shall provide that, in civil judicial proceedings, its judicial authorities have the authority to order the infringer, at least as described in paragraph 2, to pay the right holder the infringer's profits that are attributable to the infringement.158

4. In determining the amount of damages under paragraph 2, its judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or service measured by the market price, or the suggested retail price.

5. Each Party shall provide that its judicial authorities have the authority to order injunctive relief that conforms to the provisions of Article 44 of the TRIPS Agreement, inter alia, to prevent goods that involve the infringement of an intellectual property right [MY propose: in that Party's jurisdiction] from entering into the channels of commerce [VN propose: pursuant to that Party's law]. 155 For the purposes of this Article, the term “right holder” shall include those authorized licensees, federations and associations that have the legal standing and authority to assert such rights. The term “authorized licensee” shall include the exclusive licensee of any one or more of the exclusive intellectual property rights encompassed in a given intellectual property.

. . .

7. In civil judicial proceedings, with respect to infringement of copyright or related rights protecting works, phonograms, and performances, each Party shall establish or maintain a system that provides for one or more of the following:

(a) pre-established damages, which shall be available upon the election of the right holder; or

(b) additional damages.159

. . .

9. Pre-established damages under paragraphs (7) and (8) shall be set out in an amount that would be sufficient to compensate the right holder for the harm caused by the infringement, and with a view to deterring future infringements.

10. In awarding additional damages under paragraphs (7) and (8), judicial authorities shall have the authority to award such additional damages as they consider appropriate, having regard to all relevant matters, including the nature of the infringing conduct and the need to deter similar infringements in the future.161

11. Each Party shall provide that its judicial authorities, where appropriate162, have the authority to order, at the conclusion of civil judicial proceedings concerning infringement of at least copyright or related rights, [US oppose: patents,] and trademarks, that the prevailing party be awarded payment by the losing party of court costs or fees and appropriate attorney's fees, or any other expenses as provided for under that Party's law.

12. Each Party shall provide that in civil judicial proceedings:

(a) At least with respect to pirated copyright goods and counterfeit trademark goods, each Party shall provide that, in civil judicial proceedings, at the right holder's request, its judicial authorities have the authority to order that such infringing goods [VN propose; US/JP oppose: disposed of outside the channels of commerce in such a manner to avoid any harm caused to the right holder, or] destroyed, except in exceptional circumstances, without compensation of any sort.

(b) Each Party shall further provide that its judicial authorities have the authority to order that materials and implements that have been [VN propose; US oppose: predominantly] used in the manufacture or creation of such infringing goods, be, without undue delay and without compensation of any sort, destroyed or disposed of outside the channels of commerce in such a manner as to minimize the risks of further infringements.163

=========================================
156 A Party may also provide that the right holder may not be entitled to [AU oppose: either] [AU propose: any] of the remedies set out in [AU oppose: 2 and 3] [AU propose 2, 3 and 8] in the case of a finding of non-use of a trademark. It is understood that there is no obligation for a Party to provide for the possibility of the [AU: any of the] remedies in 2, 3, 7 and 8 to be ordered in parallel.

157 Negotiator's Note: US is withdrawing reasonable royalties for patent infringement ad ref pending outcome.

158 A Party may comply with this paragraph through presuming those profits to be the damages referred to in paragraph 2. Without Prejudice

159 For greater certainty, additional damages may include exemplary or punitive damages.

160 For greater certainty, additional damages may include exemplary or punitive damages.

161 US withdraws ad ref Article QQ.H.4.Y on patents/treble damages pending outcome.

162 [CA propose: For the purposes of this Article, “where appropriate” shall not be limited to cases where a Party
acted in bad faith.]

163 Negotiator's Note: This subparagraph was previously closed, but VN would like to insert “predominantly” before
“used in the manufacture” in subparagraph b.

There is more in the TPP, but this provides a pretty good look into the problems, as regards orphan works.

USTR and USPTO have been pushed to address these issues in the TPP negotiations,particularly by KEI but also by others, since the very beginning, but for for whatever reason, nothing has been done yet to ensure that the TPP will allow laws such as the one proposed by the Copyright Office today.


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