Out of Commerce Works FAQs: key concepts in the Directive

The Directive describes out of commerce works as any type of materials that are in the permanent collections of a cultural heritage institution and are out of commerce. The Directive clarifies that these could be owned or permanently held, ‘for example as a result of a transfer of ownership or a licence agreement, legal deposit obligations or permanent custody arrangements’.

By ‘out of commerce’, the Directive includes materials that were never in commercial circulation, such as unpublished manuscripts, sound recordings, photographs, amateur films, personal correspondence, etc., and materials that were in commerce, but no longer are. This determination can be done on the item as a whole, rather than by checking every possibly protected work or material contained in the item. Importantly, the Directive makes a few precisions in this regard, including:

• materials that are in commerce only to a very limited extent (e.g. in second-hand shops, or the theoretical possibility to obtain a licence) can be considered to be out of commerce

• an item can be considered to be out of commerce even if there are adaptations of it (e.g. translations, derivative works) available in commerce

• And an item should not be considered to be out of commerce if a version of it (e.g. subsequent edition) is still available in commerce

The Directive excludes sets of items consisting predominantly of materials from outside of the European Union.

A more detailed overview of these conditions is available in this presentation at the EUIPO datathon (slides here) as well as in the Communia guidelines, the Guide for Libraries and Library Associations by EBLIDA, IFLA, LIBER and SPARC Europe and the IFRRO guide.

Article 8 of the CDSM Directive opens the possibility for member states to establish a cut-off date. The Directive does not go into any detail of what these could look like, but these should be generally understood as dates before which certain types of materials are presumed to be out of commerce. Cut-off dates simplify the ‘out of commerce determination’ that the cultural heritage institution needs to do by minimising the need to make a ‘reasonable effort’ to determine that materials are out of commerce.  

The Directive clarifies that such requirements should not ‘extend beyond what is necessary and reasonable, and shall not preclude being able to determine that a set of works or other subject matter as a whole is out of commerce, when it is reasonable to presume that all works or other subject matter are out of commerce’. This could be, for example, the case of books in print where it is reasonable to believe that some are in commerce if the effort to conduct a search is reasonable, for example via automated processes when checking certain databases.

While some countries have recognised cut-off dates directly through the transposition text, some consider adopting them through further regulatory measures, and others, such as the Netherlands, are discussing possible options via the stakeholder dialogues to implement them through memoranda of understanding.

Not all countries that have transposed the Directive have adopted a cut-off date, but there are a few examples so far, and they generally consist of one of the following types:

• ‘Static date’: a specific date before which certain types of works are considered to be out of commerce. The date always remains the same. For example, in Hungary, literary works last published in Hungary on or before 31 August 1999 are out of commerce, unless the contrary is proven. 

• ‘A moving wall’: a number of years before which certain types of materials are presumed to be out of commerce. The date will therefore move as years pass, opening the door to more materials being presumed to be out of commerce. For example, in France, all types of materials are considered to be out of commerce if their first publication or communication to the public dates back thirty years or more.

Differently from the two types of cut-off dates described above, in which the presumption is for the out of commerce status, some countries have established a ‘static’ date after which certain types of materials are presumed to be ‘in’ commerce (‘Limited window’). For example, all books that have been published less than 10 years before a specific date are considered to be in commerce unless the contrary is proven. 

Beyond the ‘types’ identified above, member states have brought in various specifications. For example, the Hungarian example contains a reference to ‘last’ published that requires an additional check for that date of publication. On the other hand, Italy refers to a cut-off date which in practice does not act like any of the cut-off dates described above, as it presumes that materials that are not available in commercial channels for at least 10 years are out of commerce, which in practice still requires making an out of commerce determination.

Generally, a ‘moving wall’ is recommended over a ‘static date’, given that, as described above, as time moves forward more and more materials will likely become out-of-commerce. Using a specific date only produces a one time benefit for the cultural heritage institution, whereas a moving wall is a recurring benefit.

It is reasonable to expect that the duration of a cut-off date is adapted to the type of work, whose nature will determine the probability that it is out of commerce at a sooner or later stage. For example, Estonia’s cut-off dates are moving walls of 50 years for works in general, 20 years for serial publications, and five years for ‘pamphlets’.

Determining what is and is not a sufficiently representative collective management organisation is a crucial aspect. When no ‘sufficiently representative’ collective management organisation exists, cultural heritage institutions can make out of commerce works available online on the basis of an exception to copyright. Instead, when a ‘sufficiently representative’ collective management organisation exists, cultural heritage institutions can only publish out-of-commerce works by concluding a licence with such organisation.

While it is for each member state to define what ‘sufficiently representative’ exactly means, we can confer from the text of the Directive that the collective management organisation must represent a significant number of rights holders in the relevant types of work, that this has to be determined on the basis of its mandates, and for one, some or all of the rights mentioned in the Directive.

In order to be able to make such a determination in a way that is fair, transparent and non-debatable, it is important that clear objective criteria on the basis of accessible information are defined. This way, there can either be a joint agreement on which collective management organisations are considered representative on that basis, or cultural heritage institutions have sufficient information to make that determination by themselves and have a clear understanding on the situations in which they should seek to conclude a licence and the situations in which they shouldn’t, without facing any legal insecurity. 

The issue of representativeness is also an important discussion point in the context of government-organised stakeholder dialogues. In the Netherlands, for example, cultural heritage institutions argue that if there is no collective management organisation that a cultural heritage institution would generally reach out to obtain a licence for works that are in commercial circulation, the collective management organisation in question should not be seen as being sufficiently representative for that same type of work when it’s not in commerce. The LIBER Copyright & Legal Matters Working Group published a statement on out of commerce works arguing that ‘LIBER is convinced that collective management organisations are not, and should not be, representative of the makers of works that have never been in commerce and/or were never intended to be in commerce’. 

Under the Directive, Member States are “free to establish specific rules applicable to cases in which more than one collective management organisation is representative for the relevant works or other subject matter, requiring for example, joint licences or an agreement between relevant organisations”. There is concern that if a cultural heritage institution is required to reach out to more than one collective management organisation for the same collection of works, this would make the process unnecessarily burdensome. 

An approach that has worked effectively is where one collective management organisation is the contact point and will re-distribute royalties with the other relevant collective management organisations, so that cultural heritage institutions only have one contact point. In Germany, for example, the collective management organisations for text (VG WORT) and visual arts (VG BILD-KUNST) have worked together to facilitate the licensing of books and printed works to ensure that the entire content of a book with text and illustrations can be combined in ‘one licence’. In this process, VG WORT assumes the ‘leading part’ by taking over the billing, technical tasks and internal affairs between the collecting societies.

The lack of commercial availability of an item needs to be determined on the basis of checking ‘customary channels’ of commerce. According to article 8 of the Directive, ‘a work (...) shall be deemed to be out of commerce when it can be presumed in good faith that [it] is not available to the public through customary channels of commerce, after a reasonable effort has been made to determine whether it is available to the public’.

No definition or list of channels is provided by the Directive, but it does establish that ‘customary channels’ should take into account ‘the characteristics of a particular work’. While we recommend that if any channels of commerce are identified as relevant, these are not established as mandatory, but as good practice, in order to avoid reaching a situation similar to that of the orphan works exception. As described in the question ‘How are ‘out of commerce’ works defined?’, second-hand shops should not be considered as a customary channel of commerce. 

For books, a books-in-print database, in particular using ISBN numbers, could be considered a reasonable source to check, although it leaves out early works that were not catalogued.

For sound recordings, Spotify, Deezer, and YouTube could be an option, and for audiovisual or film works, Netflix and similar platforms, as well as local streaming platforms. However, in order for this search to create the least burden possible, a source should ideally be open, free to use, and machine readable for it to be considered a suitable option, which is unfortunately not the case for streaming platforms.

As regards other types of works: ISSN numbers could be checked for periodicals, ISMN for sheet music, and ISTC for textual works, as well as ISNI. In the field of visual arts, image libraries, image collective management organisations and auction house catalogues could also be consulted. Collective management organisation’s catalogues can also assist when they contain information about when works have been used in customary channels.

The Directive clearly states that the determination of whether a work is out of commerce should be done on the basis of the ‘work as a whole’. This is a crucial concept that helps avoid a situation in which the determination of the ‘out of commerce status’ would be too burdensome. 

As a result, in principle, it would not be necessary to check the out of commerce status of photographs contained in a newspaper or of music contained in a film, for example. However, there might be situations in which the cultural heritage institution has ‘easily available information’ about a work contained in the ‘main’ work being in commerce. If this is the case, the cultural heritage institution could consider looking at the status of the works contained in the (main) work. This is as long as the process does not become unreasonably onerous or disproportionate.

The notion of the ‘work as a whole’ is used in the Directive to refer to the determination of the ‘out of commerce status’. It is unclear whether this notion applies in other circumstances: for example if an author of a ‘work contained in a work’ decides to opt out. 

Furthermore, the notion of ‘main’ work might require some consideration on a case by case basis. It could be questionable, for example, to consider a ‘collection of poems’ as the ‘main work’, leading to a situation where the commercial availability of the underlying poems is ignored, even if they may have also been published separately in the past and could be considered a ‘main work’ in themselves. The individual poems might be in commerce even though the compilation is not (and vice-versa). Cultural heritage institutions should make best efforts and act in good faith when doing these case by case analyses.

The Directive establishes that out of commerce materials can be shared via non-commercial websites, regardless of whether they are made available online under the terms of the licence or under the exception. The Directive does not place any limitations on the website having to be that of the cultural heritage institutions: it is therefore possible to display the materials on a third-party website, such as that of an aggregator, as long as it is non-commercial. More permissive approaches might be established in certain member states through the transposition laws.

According to the Directive, cultural heritage institutions can legally share the materials in all of the European Union. When using the materials under the exception, a specific mandatory provision guarantees that this is the case, and it does so by creating a legal ‘fiction’ according to which any use of the out of commerce materials should be understood as taking place in the member state in which the cultural heritage institution is established. When using the materials under the licence, the licence should be able to cover uses in any European Union member state but not outside of the EU where the works might be still in commerce and where the EU legislation does not have jurisdiction.