Australia Moves to Introduce Orphan Works Copyright Scheme: What It Means for Creative Industries and AI Training

Have you ever avoided using material (a document or a photo perhaps) because you couldn’t locate the owner to request permission? Australia’s proposed orphan works scheme will change what is legally possible — but it comes with strict conditions.

On 5 November 2025, the Australian Government tabled to Parliament the Copyright Amendment Bill 2025 (Cth) (Bill), which, if passed, will establish Australia’s first orphan works scheme. 

Key Points:

• Under the proposed scheme, works with untraceable owners (orphan works) may be used if five strict conditions are met.
• Higher standards will apply for commercial use.
• The scheme is unlikely to enable bulk AI training.
• Copyright owners who later emerge can seek reasonable compensation (similar to a licence fee).
• The Bill is currently before a Senate committee, with their report due 19 December 2025. 

What Are Orphan Works?

Orphan works are works whose owners cannot be identified or located. Since the Copyright Act 1968 (Cth) (Copyright Act) requires permission from the owner before using works in which copyright subsist, these works have remained unusable without the user willing to bear the risk of an infringement claim. Following similar schemes in the UK, Canada, and the EU, Australia's proposed scheme aims to enable appropriate use whilst protecting copyright owners' interests.

The Five Conditions

Under the proposed scheme, users would be able to rely on a "limitation on remedies defence" when using orphan works if they meet five conditions:

1. Reasonably diligent search to find the copyright owner;
2. Timing: search conducted within a reasonable period before use;
3. Record keeping of the search for a reasonable period;
4. Owner not found at the time of use, owner(s) could not be identified or located; and
5. Notice: clear and prominent notice stating the owner could not be found and referencing Division 2AAA of the Copyright Act. 

Courts will assess whether there has been a "reasonably diligent search" by considering the nature of the work, the use, the purpose, whether the owner is likely overseas, impact on owners, search methodology, and relevant industry guidelines.

The Explanatory Memorandum clarifies that commercial uses, sensitive material, culturally significant works (particularly Indigenous Cultural and Intellectual Property), and foreign works require higher standards.

So, whilst the scheme opens doors for media companies and creators to use archival and historical content, commercial users will need robust compliance processes for searches, record-keeping, and notices required under the scheme.

Financial Risk: The "Reasonable Payment" Requirement

Even compliant users face ongoing financial risks. If a copyright owner later emerges, courts may require "reasonable payment" (essentially the licensing fee that would have been paid), though damages or account of profits cannot be ordered.

The only exceptions are for solely private and domestic use where the user either promptly ceases use or agrees terms with the owner.

This creates uncertainty that may discourage uptake, particularly for not-for-profit and research organisations lacking budgets for unexpected licensing fees. Critics are pushing for a "non-commercial use" exemption or complete removal of this requirement.

AI Training: Unlikely to Benefit

The Explanatory Memorandum explicitly states the scheme is unlikely to facilitate bulk uses like training AI large language models. This is because each orphan work requires:

• An individual reasonably diligent search;
• A clear and prominent notice for each work and each use; and
• Ongoing liability for "reasonable payments".

With AI training requiring millions of works, compliance would be administratively impractical. 

However, theoretically, there is a workaround: an AI training company could outsource the requirement for searches and notices to third-party experts whilst accepting liability for any reasonable payments that may arise if they are willing to take on that cost. 

What's Next?

As at the date of this article, the Bill has been read a first time in the House of Representatives and is currently with the Senate Legal and Constitutional Affairs Legislation Committee. Their report is due 19 December 2025.

The Intellectual Property team at Bird & Bird advises clients on all issues pertaining to copyright, including orphan works and generative AI. For questions about these reforms, please contact one of the contributors.

This article was written with the assistance of Monique Goyen.