One of the boldest proposals of the Hargreaves Report was the creation of a Digital Copyright Exchange:
In order to boost UK firms' access to transparent, contestable and global digital markets, the UK should establish a cross sectoral Digital Copyright Exchange. Government should appoint a senior figure to oversee its design and implementation by the end of 2012. A range of incentives and disincentives will be needed to encourage rights holders and others to take part. Governance should reflect the interests of participants, working to an agreed code of practice.
To explore the practicalities of implementing such a scheme, the UK government has asked Richard Hooper to conduct a feasibility study, which now has its own home page. As part of that study, Hooper is meeting with many groups to seek their views. One of them convened last week at London's TechHub, and the organisers, Coadec, kindly invited me to take part.
The central theme brought out by those around the table was frustration with the current copyright licensing system that is so complicated to navigate and expensive to deal with. The hope is that the DCE could offer a more rational approach that. But here I want to talk about a slightly different aspect of the DCE – one that I wrote about in my previous column on the consultation: orphan works.
One proposal is that the DCE could act as a central registry for works that people believe to be orphans. The idea here is that potential owners could then check that central database to see if there are any of their works that have been mis-identified for any reason.
I pick on this area because I believe it addresses the current feasibility study's key questions. These are articulated in (yet another) document, the Call for Evidence (sadly, only available as a Microsoft Word document - so much for open standards and level playing fields.)
Here is what it calls the "Hargreaves Hypothesis":
"Copyright licensing, involving rights owners, rights managers, rights users and end users across the different media types, in the three defined copyright markets, is not fit for purpose for the digital age."
Those "three copyright markets" are "large payers/large transactions" (BBC, iTunes, JK Rowling etc.); medium-sized payers/transactions; small payers/transactions involving both organisations and individuals (start-ups, eductional establishments etc.).
The hypothesis is justified by seven reasons:
Copyright licensing is:
expensive (both the licensing process and the cost of rights)
difficult to use
difficult to access
siloed within individual media types (at a time when more and more digital content is mixed media and cross-media)
victim to a misalignment of incentives between rights owners, rights managers, rights users and end users
insufficiently international in focus and scope
The implications of the hypothesis are claimed to be:
the size of the pie for rights owners/managers is smaller than it could be
the share of the pie going to rights owners is smaller than it could be
new digital businesses within the creative industries are being held back innovation is being held back
infringement of copyrighted content remains persistent
the end user is deprived of access to a significant amount of commercially and culturally valuable content, e.g. archive material
UK GDP should grow by an extra £2 billion per year by 2020, if barriers in the digital copyright market were reduced.
What I find particularly interesting about orphan works is that they are perhaps the perfect demonstration that the current copyright licensing scheme is not "fit for purpose for the digital age": after all, these are works that nobody can access because it's not possible to find out from whom – if anyone – licenses should be sought. It is therefore impossible to produce digital versions of them legally.
A corollary of this situation is that liberating orphan works from this copyright limbo is the easiest way to boost the digital market without needing to fight vested interests, since by definition there aren't any for works whose owners cannot be located.
Hence my interest in the DCE: we need a structure that will make that liberation possible, and in the absence of anything else, the DCE looks like it might fit the bill. The way I think that things might work is something like this.
After a diligent search for the copyright owners of a work, people would be able to register it as a presumed orphan work with the DCE. Then they could start using that work. If, subsequently, some long-lost owners turned up, they could use the DCE to find out who was using the works, and negotiate some back-payment for the use already made.
It would also be good if the DCE could establish rules for these kinds of situations. If copyright owners were given a free hand to demand unreasonable back-payments for the use of their works without permission – because they were believed to be orphan works – we might see the emergence of submarine copyright just as we see submarine patents. That is, rather than declare themselves immediately, copyright holders might wait until works had been used, and then pop up and demand exorbitant licences just as holders of submarine patents.
So that's the gist of what I will be submitting to this study. You can make your own contribution by sending it to [email protected] no later than 10 February 2012. I'll be writing about other aspects of my main submission on the Hargreaves Report in due course.