From Citizendium, the Citizens' Compendium
Orphan works are texts or other copyrightable works whose copyright owner cannot be identified and/or located. In the most common situation, the inability of a potential user of such a work to locate the copyright holder produces uncertainty about the use of the work, since it is possible, however remotely so, that a copyright holder or their heir may surface after the use has begun and bring an infringement action, leading to the possibility of compensatory damages against the user and distributor of the work. In locales where the use of an orphan work is not subject to a strong fair use or fair dealing claim, use of the work effectively stops before it even starts. It is thought that progressively strong copyright protections over the past decades in most countries (with a corresponding decrease in the number of works entering the public domain) have created the problem of orphan works unintended, since past content creators planned only for the copyright schemes of their time, thus explaining why their works have become orphaned.
Although the problem of orphan works is most acute in the United States, the issue is global, particularly as regards photographs, silent films, and works by creators who are not famous regardless of the type of work. Large repositories of orphaned works are frequently held by libraries, museums and other collections-holders, and they may be studied on-site; however, they are not dispersed or permitted for copying and publishing out of fear of an infringement suit to which the distributor may be party. It is thought that the uncertainty surrounding the dispersal and use of orphan works seriously inhibits public good that would otherwise result from their use, if substantial protections were afforded.
Canada and the United Kingdom have enacted relatively narrow laws in attempts to free up use of its orphan works, but various economic disincentives built into the laws have meant that few orphaned works have been freed for use. The United State's Copyright Term Extension Act of 1998 enacted minor protections for users of orphan works, but they were not enough to induce significant dispersion and usages. In 2003, the Public Domain Enhancement Act, an attempt to address orphan works, was debated in the U.S. Congress but never passed. In 2005, the U.S. Copyright Office at the urging of numerous representatives of the United States Congress who were attempting to revisit the Act studied the issue of orphan works, and strongly concluded that substantial legislative action was warranted to free them beyond the often uncertain bounds of fair use, to include protection from damages in infringement suits that might result from their use. The problem of orphan works was again not acted on, although U.S. courts by then had already effectively ruled to afford protection from compensatory damages resulting from their use, allowing the remedy of only a nominative license fee when the user had first demonstrated reasonable diligence to locate the copyright holder. It is thought that future legislative action will likely follow the course taken by the courts.