Entertainment & Media Law Signal

"TURN IT DOWN!" - The CRTC publishes final regulations requiring Canadian broadcasters and distributors to control the loudness of TV commercials by September 1, 2012.

Sara Perry — Mon, 14 May 2012 08:40:43 -0500

In response to a steady increase in the number of complaints from Canadians over loud ads, the regulator of broadcast television in Canada, the Canadian Radio-television and Telecommunications Commission (“CRTC”), on September 13, 2011, announced that broadcasters must control the loudness of TV commercials by September 1, 2012. A CRTC news release included the following statement from then Chairman Konrad von Finckenstein:

“Broadcasters have allowed ear-splitting ads to disturb viewers and have left us little choice but to set out clear rules that will put an end to excessively loud ads. The technology exists, let’s use it.''

Just a few short months later in December, 2011, the CRTC published draft regulations for comment requiring Canadian broadcasters to ensure that both programs and ads are transmitted at the same volume. This means viewers will no longer have to reach for the remote when programming switches to commercial messaging. The regulations require Canadian broadcasters and distributers, who are also responsible for maintaining the volume of programs, to adhere to the technical requirements set forth in ATCS Recommended Practice A/85: Techniques for Establishing and Maintaining Audio Loudness for Digital Television, which provides standards for measuring and controlling television signals in order to manage audio fluctuations between programming and commercials. The Recommended Practice is published by the Advanced Television Systems Committee, the internationally recognized body that sets technical standards for digital television.

The final regulations were published by the CRTC on May 8, 2012, and come into force on September 1, 2012. In a May 8 CRTC press release Leonard Katz, Acting Chairman of the CRTC, confirmed that these regulations “bring us a step closer to our goal of eliminating loud TV ads” and “provide relief to viewers.”

Amendments implementing the above requirements were made to the Television Broadcasting Regulations, 1987, the Specialty Services Regulations, 1990, and the Broadcasting Distribution Regulations.

The amendments will not necessarily affect the ability or desire of viewers to fast forward through commercials altogether. However, as of September 1, 2012, the date when broadcasters will need to ensure commercials are received at an even volume in relation to their programming counterparts, Canadians may find they no longer need to reach for the remote in between breaks in programming to control unmanageable fluctuations in television loudness.

What's The Deal?

Michael Shedletsky — Fri, 11 May 2012 14:44:44 -0500

From Canada and the US to China and France, industry wide activity has been stretching globally.

AMC Entertainment, one of the largest theatre chains in North America, is in talks to sell the company to Wanda Group, owner of one of the largest theatre chains in China (Click here for more details). If this deal happens, we will see exhibitors in two of the largest film countries join forces. China has been very active in capitalizing on the lucrative American film scene, while also trying to expand exposure and distribution of Chinese films. It has been rumoured that AMC may be more attractive to Wanda without its Canadian theatre assets. The obvious player in such a transaction would be Cineplex, while Empire always remains a possible contender.
In other Chinese film news, Bona, a Chinese distributor, is increasing 3D production as it attempts to benefit from strong box office totals and the strong growth in the 3D film market. This news comes shortly after RealD 3D announces that it has surpassed the 20,000 3D movie screen mark worldwide, and still counting.
ABC just renewed for additional seasons of a few of its hit television shows, including “Grey’s Anatomy”, “Once Upon a Time” and “Modern Family”. Renewals for other shows are still in the works.

And, with Festival de Cannes 2012 less than a week away, come back soon for an update on the busy buyers and sellers!

Jim Russell Rocks the Cover of Lexpert

Bob Tarantino — Fri, 20 Apr 2012 12:29:07 -0500

Jim Russell, a partner in the Entertainment Law Group in the Heenan Blaikie Toronto office (and all-around awesome guy), is featured in the cover story of the April 2012 edition of Lexpert magazine. In the piece titled "Advising for the Digital Revolution", Jim discusses how the growth of digital media has changed the practice of law and considers the challenges facing content owners.

(Photo by Don Dixon, Cover image © Thomson Reuters Canada Limited)

As JIm notes in the article, “From the perspective of content producers, the challenge is to find the dividing line between granting away rights that broadcasters want and holding back the rights that allow producers to benefit from secondary and tertiary revenue sources that new distribution models and technologies might afford.” Also making an appearance in the article (but not on the cover) is partner (and also all-around awesome guy) Simon Chester.

The full article can be accessed at the Lexpert website.

OBA EM&C Luminary Lunch: Richard Stursberg and The Tower of Babble

Bob Tarantino — Fri, 20 Apr 2012 07:43:36 -0500

The Ontario Bar Association's Entertainment, Media and Communications Law Section is hosting its 2012 Luminary Lunch on Wednesday, May 2. The featured speaker will be Richard Stursberg, who will be discussing his new book The Tower of Babble: Sins, Secrets and Successes Inside the CBC. The ticket price includes lunch and a copy of the book. Further details and registration information for the event is available here.

The CRTC stands down on OTT programming services

Stephen Zolf — Wed, 18 Apr 2012 10:19:04 -0500

In a brief half-page letter issued on April 16, 2012, the CRTC has concluded that it will not conduct a second fact-finding exercise on the impact of over-the-top (OTT) programming services (e.g. Netflix) on the Canadian broadcasting system. This is a change of course for the CRTC: in its 2011 report on fact-finding exercise on the OTT services, the CRTC had decided to conduct a second fact-finding exercise in May 2012. However, as the CRTC explains in its latest determination, it has now conducted further “stakeholder consultations” and trend analysis of OTT programming services and their impact on the Canadian broadcasting system. Based on this data, the CRTC has altered its views, finding that OTT programming services “have not had an impact [on the broadcasting system] sufficient to warrant another fact-finding exercise at this time”. Of course, the Commission will continue to “closely monitor over-the-top services in the context of the evolving Canadian communications OTT services”. Standby!

Turn up the Heat: Ontario wades in on wireless "bill shock" legislation

Stephen Zolf — Thu, 12 Apr 2012 15:25:48 -0500

Last week's post outlined recent CRTC action to potentially oversee the establishment of a national consumer code for wireless services. The CRTC's proposal was supported by several wireless carriers, who are intent on avoiding a "patchwork quilt" of provincial strictures in this area. Now, the Ontario Government has turned up the heat, introducing legislation on April 12, 2012 to oversee aspects of wireless service provide contracts with consumers. Among the objectives of the Wireless Services Agreements Act, 2012 is to "make it easier to understand the costs and terms of wireless services agreements" through greater disclosure and clarity in contracts for wireless services. The legislation would allow consumers to cancel agreements at any time; require the express consent of the consumer to renew, extend or amend a contract; and introduce all-inclusive price advertising for service plans. The Bill also provides for a cap on the cost of canceling a contract and a maximum fee for walking away from fixed-term contracts. The Government's press release can be found here. Media coverage here.

What's The Deal?

Michael Shedletsky — Mon, 09 Apr 2012 16:34:44 -0500

After a short break to make some deals of our own – What’s The Deal is back!

miptv wrapped up last week in Cannes, so here is a quick recap of some noteworthy television deals:
- Charlie Sheen’s new show “Anger Management” adds Sweden, Norway and Denmark to its growing list of audiences as Lionsgate sold the rights to Modern Times Group. Lionsgate has already sold the U.S., Canada, Latin America and Germany rights.
- UK’s BSkyB acquired 3D rights to a few A&E Network titles, including “Titanic: 100 Years in 3D”
- Local Toronto animation studio 9 Story Entertainment sold several of its children’s programming titles, including “Camp Lake Bottom”, “Daniel Tiger’s Neighbourhood” and “Numb Chuks” to Luk International for Spain and Portugal.
- AB Groupe in France has picked up “Lilyhammer”, starring Steven Van Zandt as a New York mobster who moves to a small town in Norway through the witness protection program. The show has already aired on Netflix in North America with great success.

In other news, who said Google and Paramount could not get along? Although Viacom and Google have been battling in court regarding YouTube copyright issues (click here for more), Paramount was not afraid to license about 500 movies to be the first new titles on Google Play, including “Hugo”, “The Adventures of TinTin” and “The Godfather”. The films will also be available on YouTube. Click here for more.

Aframe, a cloud video production/software as a service platform (the Salesforce/ Dropbox of video production) from the UK, is setting up shop in North America very soon thanks to a $7 million venture capital investment from Octopus Investments, Eden Ventures and Northstar Ventures. They will operate on both the east and west coast with current clients including BBC and MTV.

The CRTC seeks public input on whether it should enforce a national consumer code for wireless services

Stephen Zolf — Wed, 04 Apr 2012 17:02:18 -0500

The CRTC launched a new proceeding on April 4, 2012 to consider whether it should intervene in the retail wireless (i.e. mobile phone) market by overseeing the establishment of a national consumer code for wireless services.

The proceeding is in response to applications filed in 2011 by consumer groups seeking CRTC prohibition of certain billing practices by the wireless carriers. Even the wireless carriers are seeking CRTC action: in March of 2012, Rogers applied to the CRTC to request that the Commission establish an internal working group process to develop and implement a national wireless services consumer code. The application by Rogers should be seen as pre-emptive in nature: the national wireless carriers have been displeased with developments in recent years in which several provinces have either passed or introduced amendments to their consumer protection acts that directly or indirectly have an impact on wireless services. Quebec’s Bill 60 is now in force, Manitoba recently passed Bill 35 and Ontario has introduced Bill 5. The provincial bills address “hot button” issues such as cancellation fees, consumer agreements, carrier changes and other aspects of the wireless service.

Rogers has proactively urged the CRTC to “occupy the field” by implementing a national code, to avoid what Rogers has described as “a patchwork quilt of different rules and regulations…[that] will not only complicate wireless agreements but will also …result in higher operating costs which will ultimately be passed onto the customer”. According to Rogers, a federal code would govern all wireless service arrangements in each and every province, eliminating the need for individual provincial rules and producing a “win-win” for both consumer and carriers: consumers will be protected by a single, easy to understand set of regulations allowing them to fully understand their rights and privileges, while wireless carriers can modify their procedures to ensure compliance with a single regulatory regime.

Rogers has received support for its uniform national approach to consumer standards from the Canadian Wireless Telecommunications Association (CWTA). This approach has also been supported by Telus although on a more conditional basis: in Telus’ view, Rogers’ proposals for a national code does not cover a sufficiently broad range of “transparency-oriented issues”. Hence, Telus urged the CRTC first conduct a more open process through a public consultation with participation by consumers, governments, carriers and other stakeholders.

So it appears the regulatory winds are blowing toward some form of CRTC-oversight of a national wireless services code. One might think that the next step is straightforward: the CRTC should move ahead and get public input on a national wireless service code. Well, dear reader, it's not that simple, as evidenced by the rather inscrutable title of the CRTC’s Notice of Consultation: “Proceeding to consider whether the conditions in the Canadian wireless market have changed sufficiently to warrant Commission intervention with respect to retail wireless services”. The CRTC is asking this threshold question because it currently views its own jurisdiction over wireless carriers as somewhat constrained by its previous determinations to “forbear” from regulating retail mobile services. In the mid-1990s, the Commission determined that it would forbear from further regulation of the Canadian wireless industry and would allow market forces to guide the industry’s growth. The rationale for those determinations was the Commission’s finding at the time that there were sufficient levels of competition in the Canadian wireless industry. Accordingly, pursuant to a series of policy rulings in the late 1990s (here and here), the CRTC “refrained from exercising” its statutory powers to regulate retail wireless services, pursuant to its “forbearance” power under section 34 of the Telecommunications Act. Moreover, the 2006 Federal Government’s Policy Direction requires, among other things, that “the Commission rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives set out in the Act and that where the Commission has to regulate, it does so “in a manner that interferes with market forces to the minimum extent necessary to meet these policy objectives”.

Given this history of “light regulation” (or lack thereof) of the retail wireless service sector, the CRTC expressed its view in this proceeding that: “before it can consider what form of intervention, if any, may be appropriate with respect to [a code for] retail wireless services, it must first determine whether there is evidence that Commission intervention in this matter is necessary and appropriate in light of the Commission’s forbearance from regulation of the wireless industry and the Policy Direction”. In other words, the CRTC is first seeking evidence from the public on whether the conditions that it identified more than fifteen years ago as the rationale for forbearance have now changed “sufficiently” to warrant Commission intervention in the development of a national retail wireless services consumer code.

Those who wish to participate in the CRTC proceeding must submit comments on or before May 3, 2012.

Sounds Like a Revolution - Trade-marking Sounds in Canada

Bob Tarantino — Fri, 30 Mar 2012 08:00:00 -0500

On March 28, 2012, the Canadian Intellectual Property Office (CIPO) announced that it is now accepting applications for "sound marks". As Lorraine Fleck points out in a guest post at the IPKat blog, the genesis of this change in Canadian trade-mark policy stems from an application by Metro-Goldwyn-Mayer (otherwise known as MGM) for a trade-mark for its "roaring lion" sound, which film fans will recognize from the opening credits of MGM films (the application can be seen here - give MGM props for perseverance: they first filed the application in 1992).

CIPO's announcement stipulates that applications for sound marks must include the following elements:

state that the application is for the registration of a sound mark;
contain a drawing that graphically represents the sound;
contain a description of the sound; and
contain an electronic recording of the sound.

The graphic representation of the sound will almost inevitably be a "spectrogram" and the "electronic recording of the sound" must be "in MP3 or WAVE format, limited to 5 megabytes in size, and recorded on a CD or DVD".

The change brings Canada into line with trade-marks practice in other jurisdictions such as the United States, Australia and the EU. What sorts of sounds have been registered as marks in the US? Helpfully, the US Patent and Trademark Office hosts a "Kids' Pages" directory which contains links to multiple registered sound marks. Among them:

the NBC chimes
the MGM roaring lion
the Lucasfilm THX logo theme
the General Mills' Green Giant "ho ho ho"
the Looney Tunes theme song
the Pillsbury Doughboy's giggle
Homer Simpson's "D'oh!"

The change has a number of interesting implications for Canadian entertainment lawyers. As Jeanette Lee points out, once registrations for sound marks start being issued, another element will be added to errors and omissions (E&O) clearance reviews: people who incorporate pre-existing works into their own works will need to be cognizant that a sound they are incorporating might be protected as a registered trade-mark.

There will certainly be an expansion in the number of "things" which can be trade-marked, which may make lawyers and trade-mark agents salivate at the thought of additional filings, though proposed sound marks will still need to meet the usual thresholds for trade-mark registration of not being functional and/or clearly descriptive or deceptively misdescriptive. When it comes to "entertainment products", however, policy issues are raised where there is an overlap between a copyrighted work and a proposed sound mark. (As an example, in the US, the composition "Sweet Georgia Brown" is a registered mark of the Harlem Globetrotters in connection with "entertainment services in the nature of basketball exhibitions".) Canadian courts have expressed some reservations about using trade-marks to extend intellectual property protection over copyrighted works (see Drolet v. Stiftung Gralsbotschaft, 2009 FC 17), since the time-limited quasi-monopoly provided by copyright could be skirted by the possibly-perpetual protection afforded by trade-mark registration. As Ivy Tsui speculated at IPilogue (The “Unconventionality” of Sound Marks), could the "Hockey Night in Canada" theme song be trade-marked, thereby trumping a transfer of copyright?

The immediate effect of the CIPO announcement is to expand the possibility of IP protection for sound-based assets - what will play out in the long-term will be the question of quite where the boundaries should exist between trade-mark and copyright protection for those same assets.

"No Animals Were Harmed": Using Live Animals in Canadian Film and TV Productions

Bob Tarantino — Thu, 29 Mar 2012 07:33:03 -0500

The HBO television series Luck was recently cancelled after three horses died during production. News reports indicate that the animal deaths were simply bad luck: the producers had engaged the American Humane Association (the organization which authorizes the use of the reknowned "No Animals Were Harmed" certification mark), which oversees the use of animals in US movie productions, and had evidently been following the AHA's guidelines. A short history and evolution of the AHA's guidelines can be found here, and the AHA also provides access to the full Guidelines for the Safe Use of Animals in Filmed Media. As Annie Berlin, writing at the Biederman Blog, notes, the Screen Actors' Guild (SAG) requires that any motion picture which engages SAG actors also must engage the AHA.

In Canada, the legal implications and requirements surrounding the use of animals in filmed projects is multi-layered. At the federal level, we can start with the basic criminal law prohibition of cruelty to animals, found in Sections 444-447 of the Criminal Code. The Health of Animals Act, and its Regulations (in particular Part XII, which speaks to the transportation of animals), provides additional elements of the basic legal framework. After that, the issue of animal treatment tends to be addressed by a welter of provincial- and municipal-level laws and voluntary guidelines. (I should note that any Canadian production which engages SAG talent would be obliged, by virtue of the having to sign SAG's Global Rule One paperwork, to observe the SAG-imposed requirement that the AHA be engaged and their guidelines observed.) For those wishing to film wildlife on federal land, there may also be Parks Canada guidelines which apply, such as the Mountain National Parks Film and Photography Guidelines.

Provinces in Canada generally have their own legislation addressing prevention of cruelty to animals, usually with attendant regulations setting out the details of animal treatment. In Ontario, for example, the Ontario Society for the Prevention of Cruelty to Animals Act and its Regulations govern the matter. Also in Ontario, the Ministry of Labour has issued Guideline No. 40: Animal Handling | Safety Guidelines for the Film and Television Industry in Ontario, which sets out detailed instructions for using animals on set, including number of trainers required to be present, the use of sedation, responsibility and chain of command for the animals, the availability of nets and other safety equipment, etc. The Guidelines note that the AHA Guidelines are not in force in Canada but, in the absence of equivalent Canadian guidelines, are "generally accepted and observed by" the Ontario Society for the Prevention of Cruelty to Animals. While the OSPCA does not appear to have any specific guidelines regarding the use of animals in filmed entertainment, the Canadian Federation of Humane Societies has issued a position statement which states that the CFHA "opposes the use of animals in all forms of entertainment or displays which may cause them to suffer", though the statement does not specifically address filmed entertainment, and seems generally aimed more at events such as circuses and rodeos.

In British Columbia, after an on-set incident in 2007 in which a number of dogs died due to an infection, the British Columbia Film Commission has issued its Animals in Film Guidelines,which are a particularly useful source of information since they provide additional legal background on the various federal, provincial and municipal laws and regulations which govern producers working with animals in BC.

Moving down to the municipal level, using the City of Toronto as an example, while the City has Chapter 349 of its Municipal Code, which deals with the treatment of animals within city limits, 349-3(F) exempts from its application "areas of the City in which professionally produced films are being made by film professionals and film production companies, and only temporarily during filming". Thus, at least in the City of Toronto, producers must look to provincial and federal law, and the contractual obligations they have agreed to by signing guild or union agreements, in order to guide their conduct. The municipal code in each relevant municipality where filming with animals is occurring should be checked to discern whether there are any applicable provisions (or whether an exemption is available).

Finally, the ACTRA Independent Production Agreement stipulates that performers must be informed in advance of the presence of any animals on set (Article A2006) and that "No Performer shall be required to work with dangerous animals without a qualified handler or trainer being present on the set" (Article A2608(h)).

Canadian producers who wish to make use of animals in their film and TV projects thus have a variety of different legal obligations with which they must contend, ranging from contractual to regulatory to criminal. Because the precise legal obligations are determined so much by the locale in which they are taking place, sufficient lead-time should be allowed for in order to enable producer's counsel to properly review and assess which legal requirements must be observed.

Saskatchewan Ends Film & TV Tax Credit

Bob Tarantino — Thu, 22 Mar 2012 09:40:32 -0500

The Saskatchewan government has announced that it is eliminating the Saskatchewan Film Employment Tax Credit Program. From the CBC news report:

Finance Minister Ken Krawetz announced Wednesday that the province can't afford the film employment tax credit and so the program will be wound down.

The subsidy provides a tax credit of up to 55 per cent of the labour costs in film and video productions.

Sitcoms like Corner Gas and TV movies like Prairie Giant: The Tommy Douglas Story, were among the Saskatchewan productions made with the help of the program.

Tax credit incentive programs remain in flux in a variety of jurisdictions: as Saskatchewan winds down its program, many US states are re-assessing the advisability of their existing programs (Despite Budget Crunch, the Great Film Production Incentives Race Continues) and the UK has just announced the creation of a new targeted television tax credit.

UK To Introduce Tax Credits for TV, Video Games and Animation

Ken Dhaliwal — Thu, 22 Mar 2012 09:37:13 -0500

This week, the UK government announced that it plans to offer tax credits to high end television productions, video games and animation.

After a successful campaign by industry stakeholders, the government has acknowledged that it needs to do something to keep the UK competitive with other jurisdictions, particularly in the area of television production which has not been eligible for any incentives - unlike film. The film tax credit is generally acknowledged as being a success, and the hope is that this can be replicated in the areas of TV, video gaming and animation.

In the television sector, there was concern expressed by industry players that the lack of an incentive in the UK would mean the loss of productions to neighboring countries that did offer something.

The UK government is planning to enter into industry consultations to determine how these proposed incentives will work, and it could be 10-12 months before legislation appears.

This announcement is also good news for international partners who wish to co-produce television productions with the UK, particularly Canadians who have a long history co-producing with their British colleagues. However, since the elimination of the sale-leaseback structures for television in 2002, the level of Canada-UK television productions has dropped, with the UK slack being taken up by other countries such as Ireland.

This announcement does provide a glimmer of hope that the future of Canada-UK co-productions may be different than the recent past, and that would be a good thing.

Rush and Rush: Using Music in Political Activities (Redux)

Bob Tarantino — Thu, 15 Mar 2012 14:16:00 -0500

News reports that Rush (the band) have demanded that Rush (the Limbaugh) desist from using the band's music in his radio broadcasts have re-raised an issue we have considered here at the Signal on few different occasions. The story appears to have been broken by US blogger Bob Cesca (EXCLUSIVE: Rush Pulls Music from Limbaugh Show) and Cesca also provides a copy of the "cease and desist" letter sent by Rush's management company to The Rush Limbaugh Show. According to Cesca, The Rush Limbaugh Show had used various Rush songs as "bumpers out of ... commercial breaks" and a Rush song had been playing while Limbaugh had made various controversial statements about a woman named Sandra Fluke.

The relevant portions of the letter read as follows:

... Rush Limbaugh, Premiere Radio Networks and The Rush Limbaugh Show have been using Rush’s recorded music as part of what is essentially a political broadcast.

The use of Rush’s music in this way is an infringement of Rush’s copyrights and trademarks. The public performance of Rush’s music is not licensed for political purposes and any such use is in breach of public performance licenses and constitutes copyright infringement. There are civil and criminal remedies for copyright infringement, including statutory damages and fines.
(see sections 501-513 of Title 17 of the United States Code http://www.copyright.gov/title17/92chap5.html)

In addition, the use of Rush’s music in this manner implies an endorsement of the views expressed and products advertised on the show, and is in breach of not only copyright and trademark rights, but also, of section 51 of the New York Civil Rights Law (excerpt attached).

Long-time readers of this blog will recall that Rush has appeared here before in somewhat similar circumstances: nearly two years ago Rush demanded that US politician Rand Paul stop using their music at public appearances and stop quoting lyrics in speeches (see: Signal coverage from June 2010; Ben Sheffner's discussion of the matter; and the May 2010 cease and desist letter).

So - can Rush (the band) prevent Rush (the Limbaugh) (or any other radio show) from using its music on a radio broadcast? (I'm going to focus on the copyright issues here, since those are of broader application, rather than the New York State-specific right of publicity claims or the trade-mark claims.)

As discussed in our earlier post (Canadian Copyright and Campaigns - Moral Rights Edition) the band might have an easier time of things trying to stop a Canadian political radio show from using their music: in Canada they (i.e., the composers of the songs in question) could try to assert their moral rights in the songs, found in Sections 14.1 and 28.2 of the Copyright Act (Canada). Such a claim would involve arguing that Limbaugh's use of their compositions constitutes "use in association with a product, service, cause or institution" which "prejudices" their honour or reputation". They might face some hurdles in demonstrating the first part of that formulation: it's not immediately clear that what Limbaugh does on his radio show constitutes a "cause", though one could make a relatively cogent argument that it falls within the borders of "product" or "service". However, Limbaugh's show is produced and broadcast in the US, where moral rights do not apply to musical compositions.

Is there some other basis on which Rush could be asserting their infringement of copyright claim? The letter from Rush's lawyer states "public performance of Rush’s music is not licensed for political purposes and any such use is in breach of public performance licenses". Radio stations in the US obtain public performance licenses for compositions from ASCAP, BMI and SESAC. To the best of my knowledge, none of their standard licenses (ASCAP;BMI; SESAC) include any carve-out for "political" uses. Nor does the standard SOCAN license (on the basis that Rush is Canadian, I'm guessing that their public performance rights are granted to SOCAN, which in turn has an affiliation agreement with each of the US performing rights organizations (PROs), and Rush will have chosen to affiliate with one of them - based on Ben Sheffner's blog, at least some of their compositions are licensed via SESAC). It's possible, though it would be to my knowledge a unique situation, that Rush has somehow carved out "political" uses from its grant of rights to SOCAN (and therefore the US PRO).

We should also be sure to draw a distinction between the terms of a "music publishing" agreement (which composers enter into with a music publisher such as EMI Music Publishing or Warner/Chappell) and an agreement with a PRO. While music publishing agreements regularly contain a carve-out requiring the composer's express permission for certain types of licenses, such as licenses for political activities, certain types of merchandise (e.g., firearms, alcohol, hygiene products, etc.), as mentioned above, it is almost unheard of for a grant of rights to a PRO to contain any similar sort of restriction. Radio stations generally don't obtain licenses from music publishers, they obtain licenses from PROs.

Based on the foregoing, the best copyright-based argument that Rush could make to prevent the use of its songs by Rush Limbaugh must originate somewhere other than in a violation of the PRO performing licenses.

Here's a possible way for a band like Rush to frame their argument: while a public performance license might confer the right on a radio station to publicly perform compositions, they can't function to confer a right on a producer to "synch" or otherwise use a composition in connection with a production created by someone who does not have a public performance license. While a radio station's in-house production team might be able to "shelter" under the public performance license obtained by the station, an independently-produced show, such as Limbaugh's, argubaly needs a separate set of licenses (from the owners of the publishing rights in the composition and possibly the rights in the sound recording) in order to clear the rights in the show they produce which they then "deliver" to the radio station for broadcast. It's possible that The Rush Limbaugh Show might have its own ASCAP, BMI and SESAC licenses which it has obtained. There's also the possibility that Limbaugh relies on a "fair use" argument if the excerpts of music which he uses are sufficiently short. But for music which is prominently featured in the broadcast, in the absence of TRLS having its own licenses in place, there may be a plausible claim of copyright infringement to be made. Such an argument would be much stronger in a case where a radio production company produces a recorded show which it then provides to broadcasters for transmission - it might be a little tougher to make that argument where a show is broadcast live (as the Limbaugh show appears to be).

The foregoing argument is, of course, speculative - no court that I'm aware of, whether in Canada or the US, has considered a similar argument. The consensus among US attorneys appears to be that an artist cannot legally prevent a radio show from using music if that show (or the station on which it is broadcast) has obtained the necessary PRO license (see, from Rolling Stone magazine, Can Rush, Peter Gabriel Legally Order Limbaugh to Cease Using Their Songs?). That doesn't mean, however, that an artist has no ability to prevent the usage: public declarations of disapproval can serve as moral suasion, inciting (or "shaming") the makers of a radio show to drop the songs in question. Depending on how the music is used in a particular show (e.g., if it is used as a theme song for a show, or is constantly played on the show to the extent that it becomes "identified" with the show in some manner) there might be some kind of trade-mark or right of publicity claim which could be advanced (which would be somewhat similar to the Canadian "moral rights" claim). And claims backed by assertions of legal rights might persuade the recipient to stop the usage simply because they don't have the time, energy or money to contest the legal claim.

Canadian Government Announces New Telecom Ownership Rules and Spectrum Policy

Stephen Zolf — Thu, 15 Mar 2012 09:49:43 -0500

How do you put concepts such as telecommunications policy, spectrum caps and foreign investment restrictions in the same sentence with “supporting Canadian families”? The federal Government has cracked that nut with the March 14, 2012 announcement by the Minister of Industry to shake up the rules in the telecom sector with a view to “providing Canadian families with more choices at low prices for wireless services”. The announcement is significant in that it has addressed some long-standing issues that stakeholders in the telecommunications industry have had before this Government and previous governments.

Among the Government’s stated objectives in announcing the new rules are to ensure sustained competition and robust investment and innovation in the wireless telecommunications sector.

The key measures announced by the Minister are:

1. Changes to the telecom foreign ownership rules

The government will amend the Telecommunications Act to exempt telecommunications companies with less than 10 percent of total telecommunications Canadian market revenue from foreign investment restrictions in the Act. According to the Government, this change will “promote competition by improving access to capital…and encourage long-term investment in Canada's telecommunications industry.”

But the devil is in the details:

This measure is aimed directly at benefiting new entrant wireless players such as Wind Mobile whose market share is significantly under the newly announced 10 per cent threshold. On the other hand this 10 per cent solution is a significant policy loss for the incumbent telcos who have argued vehemently for competitive equity with respect to changes in the foreign ownership rules.
Companies that grow their market shares in excess of 10 percent of total Canadian telecommunications market revenues other than by way of merger or acquisitions will continue to be exempt from the restrictions.
Based on the wording of the Government’s announcement, the changes in the ownership rules would extend to all “telecommunications companies” not just wireless companies notwithstanding that the overall announcement is oriented to the wireless sector.
Restrictions on foreign ownership under the Broadcasting Act would remain for all companies with broadcasting distribution activities. So any company with less than a 10% market share who enters the broadcasting business (either as a content provider or a broadcasting distributor, will have to ensure that these businesses continue to comply with the more restrictive ownership rules which preclude non-Canadian control and limit the amount of voting interest by non-Canadians in a domestic broadcaster.
The provisions of the Investment Canada Act will continue to apply as is the case with any direct foreign investment.

2. Spectrum caps not “set aside”

The government will apply caps in the upcoming spectrum auctions that will enable four or more service providers in each region to obtain spectrum in both the 700 MHz and the 2500 MHz bands. Here are the key details on the spectrum caps:

The 700 MHz band is “prime real estate” spectrum that has been re-harvested from analog broadcasters: services using this part of the spectrum have the ability to penetrate buildings and travel longer distances.
A limit will be imposed on the incumbent wireless providers for the 700 MHz spectrum.
While the Government has stated that its adopted approach of caps will be equivalent to a “set-aside” of spectrum (which it implemented in the 2008 Advanced Wireless Spectrum auction), the spectrum cap approach is clearly not the preferred approach of the new players, such as Wind Mobile and Mobilicity who have lobbied the Government to set aside spectrum that only they could bid on. Many are now speculating that the caps will push companies in the sector to merge, effectively introducing more market uncertainty in this sector.
Unlike a set-aside, the measures will not require Industry Canada to identify specific blocks of spectrum, allowing companies to bid according to their business plans.
The 700 MHz auction will be held in the first half of 2013, followed by the 2500 MHz auction within a year.
The Government has stated its expectation that companies will begin rolling out network coverage—and delivering benefits to Canadians—in a timely fashion after acquiring this new spectrum.

3. Spectrum licence obligations

The government will require companies having access to two or more blocks of paired spectrum in the 700 MHz band to cover 90 percent of the population of their current high-speed population coverage within five years and 97 percent within seven years of licensing. In addition, general rollout requirements will be applied to both the 700 and the 2500 MHz bands, as in previous auctions (requiring between 20- and 50-percent population coverage, depending on the region, within 10 years).

4. Roaming policies

Industry Canada will improve and extend current roaming policies. In the 2008 Advanced Wireless Spectrum auction, the Government required all carriers to offer roaming, including some provisions that were only available to new entrant service providers. These requirements were put in place for five years and are set to expire in 2013. In the March 14^th announcement, the Minister has extended roaming provisions indefinitely and expanding them to all carriers. It will also shorten the timelines for initiation of arbitration and the arbitration process between companies negotiating roaming agreements.

5. Antenna tower sharing

In the 2008 auction, Industry Canada mandated antenna tower and site sharing. This policy was introduced to reduce the proliferation of antenna towers and to facilitate the entry of new competition into the wireless market. The Government will continue these measures and will take steps to improve the current policies by requiring carriers to make available basic information on all towers to improve transparency and expedite the sharing process. It will also require shortening the timelines for initiation of arbitration and the arbitration process.

Stakeholder input will be sought on the proposed changes to roaming and tower sharing policies.

The new framework for mobile broadband services for the 700 MHZ band can be found here. The Proposed Revisions to the Frameworks for Mandatory Roaming and Antenna Tower and Site Sharing can be found here.

Co-Production Updates

Ken Dhaliwal — Mon, 05 Mar 2012 18:47:46 -0500

Two items of note relating to the issue of international treaty co-productions which I believe indicate their re-emergence as a way of producing (especially in the current financial climate).

First, Telefilm Canada recently announced some changes to its Canada Feature Film Fund ("CFFF") guidelines - and one in particular should be welcomed by the producers in this country who participate in international treaty co-productions which access the CFFF.

Prior to these announced changes, a project which received CFFF funding did so by way of a recoupable equity investment. In exchange for making this recoupable equity investment, CFFF required that a portion of the copyright in the subject production be transferred to it. In the context of an all-Canadian production, this was generally not a problem as the participants (distributors, bonders and financiers) had a very good sense of who and what CFFF (and Telefilm) was and their role in the industry.

However, in the case of international co-productions, the fact that the Canadian co-producer was transferring part of its copyright to a third party - and especially a Government body - did not always sit well with the other co-producers, and in some cases foreign lenders. I have personally spent many hours on a number of files over the years explaining to these concerned parties the role of CFFF and Telefim, the rationale behind the taking of a copyright interest, and why such a thing should not cause the concerns it was causing. In many of these cases, the issue was resolved with a combination of reassurance and a leap of faith. However, in some cases, the issue went beyond faith and matters evolved (or devolved) into time consuming discussions on the importance of copyright in different jurisdictions - all of which was very intellectually stimulating to the lawyers, but did not go over too well with the clients.

The "fix" announced by Telefilm is something which seems to make complete sense and should be welcomed by most producers. The CFFF investment can now be taken by producers as either : (i) a recoupable equity investment as was previously the case with an accompanying transfer of copyright; or (ii) a recoupable advance which eliminates the transfer of copyright. The recoupment in either option is the same and remains unchanged i.e. a revenue corridor or open territories assigned to Telefilm.

One factor producers must evaluate in determining which option suits them is the potential impact on their tax credits- but beyond this issue, I believe that this change is a very helpful move by Telefilm.

On a related note, I recently participated in a panel in Berlin during the most recent edition of the Berlinale film festival. The event was hosted by our friends at Unverzagt Von Have, a leading German media law firm and was extremely well attended with people from Europe, North America and Asia. The panel focused on international co-productions and related developments in the UK, Canada, India and Poland. Most of the participants prepared materials which can be found here.

The materials I prepared relating to Canada were: (i) an updated paper on co-producing with Canadians; and (ii) a short overview on the benefits of co-producing with Canada.

By Ken Dhaliwal

Morals Clause? Unlikely for Bad Boy Charlie Sheen

Sara Perry — Mon, 05 Mar 2012 16:15:22 -0500

While advertiser’s traditionally spend a significant amount of money, effort and time to protect their brands from the potential negative implications of aligning with scandalous celebs, Charlie Sheen’s bad boy image and controversial behaviour seems to have been exactly what attracted advertiser’s Fiat and DirecTV to the star.

Advertisers pay huge dollars to tie their products or services to successful celebrities and athletes in order to create, alter or reinforce a particular brand image that aligns with and leverages the personality, image and success of the celebrity. But what happens when the celebrity behaves badly? How does a brand save itself from the negative effects of the association? The answer: a “morals clause”. Morals clauses recognize the potential negative effects that a star’s off camera activities can have on the brand with whom the star is associated. To guard against this risk, the morals clause gives the advertiser the contractual right to terminate an endorsement deal in the event the celebrity engages in certain offending conduct or behaves in a manner that would reflect poorly upon the individual’s character, and, by association, that of the brand.

Morals clauses were initially introduced in the early 1920’s (allegedly following the scandal of silent film comedian Roscoe "Fatty" Arbuckle) in Hollywood studio agreements with their contracted actors. Morals clauses were also initially employed in agreements between major sports leagues and their athletes (e.g., Babe Ruth). Today, morals clauses are ubiquitous in talent and endorsement agreements. Morals clauses can be drafted broadly to apply to behaviour that may shock, insult or offend public morals or decency, or which may bring the actor (and the brand by association) into public hatred, contempt, or disrepute, or behaviour that is simply embarrassing or inconsistent with the image of the brand (e.g., alcohol abuse or extramarital affairs). Others, however, usually following significant negotiations, can be more specific allowing contractual cancellation only in certain instances. For example, if the celebrity is convicted of a crime (e.g., dog fighting or sexual assault) or is involved in a scandal alleging particularly offensive conduct such as drug abuse, pornography or domestic violence. Without a morals clause, advertisers may still attempt to protect their image by pulling any advertising featuring the star and by deciding not to renew a contract upon its expiration. However, without a morals clause, and depending on the terms of the arrangement, advertisers may still be required to pay hefty sums to the engaged talent following a scandal despite publically distancing the brand from the talent.

While we do not know the specific details of these separations, morals clauses likely played a part in sponsorship cancellations following these high profile celebrity scandals. In 2005, after images surfaced of Kate Moss apparently using cocaine, Kate was publically dropped by Burberry, Chanel and H&M. Following the 2008 Summer Olympics, images of Michael Phelps allegedly smoking marijuana resulted in cereal maker Kellogg's dropping its Frosted Flakes endorsement deal with Phelps and claiming that “Michael's most recent behavior is not consistent with the image of Kellogg”. Similarly, after the scandalous extramarital affairs of Tiger Woods surfaced in the media in 2009, global consulting giant Accenture was the first of many brands to end its sponsorship with the world’s most famous golfer claiming that he was “no longer the right representative for its advertising”. For these and other celebrities whose naughty behaviour has landed them in the public eye, it is likely that any endorsements they attract from now on will be subject to broad non-negotiable morals clauses that protect the advertiser’s ability to easily terminate the endorsement arrangement… Or will they?

What happens where the scandalous activities or rebellious image of a particular celebrity is exactly what the brand wants to leverage? Bad idea or simply brilliant marketing? The latter according to Fiat and DirecTV, two brands that have recently engaged bad boy Charlie Sheen as the star in their new ad campaigns. Charlie Sheen, no stranger to negative publicity, has received significant media attention for drug use, domestic abuse, prostitution and generally strange behavior. While such behavior may be severely off-putting for some, Sheen has received a bit of fan fare for his crazed antics including his “winning” tirades, references to drinking “tiger blood” and his “violent torpedo of truth” tour. These antics have resulted in parodies on YouTube, a roast on Comedy Central and now, television commercial deals with at least two major brands. In fact, it seems like Fiat and DirecTV are relying upon just that kind of questionable behavior to improve the brand image of their respective products and services.

In the Fiat “House Arrest” commercial, Charlie Sheen aggressively drives a Fiat inside his mansion, which is full of partying guests and beautiful models. Sheen emerges from the vehicle with a visible ankle monitor claiming “I love being under house arrest. What do I get for good behavior?” The DirecTV “Platoon” commercial cautions against the perils of choosing cable TV, which decision results in unhappiness and, subsequently, a series of bad decisions leading the main character down a nasty spiral where he meets Sheen at a Turkish bath house and ends up playing out a scene from Platoon with Sheen. The brand comedically cautions against such bad decision making and states “Don’t reenact scenes from Platoon with Charlie Sheen. Get rid of cable and upgrade to DirecTV”. While brands typically avoid aligning their products and services with controversial celebrities with negative public images, and even take significant steps to negotiate contractual outs in the event of bad behaviour, these brands have embraced the rebellious, out-of-control bad boy that is Charlie Sheen just when we thought we’d seen enough of him. For Fiat, the edgy, bad boy image of Sheen may help give the vehicle maker a more rebellious, rule breaking and fun image than it currently occupies in the minds of consumers. DirecTV’s approach relates the bad decision of engaging in Sheen’s world with the bad decision to choose cable instead of DirecTV.

Whether either of these partnerships will pay off is yet to be determined. One can assume, however, that the agreed upon morals clause between Charlie Sheen and the respective advertisers, if any, is not reflective of those traditionally enshrined in commercial endorsement deals. Perhaps a reverse-morals clause was even considered.

Supreme Court of Canada rules that ISPs are not "broadcasting undertakings" by Stephen Zolf

Michael Shedletsky — Wed, 29 Feb 2012 17:04:41 -0500

NOTE: What follows is an informative and well-written article by Stephen Zolf recently published by Heenan Blaikie's Nota Bene and discussing a very recent Supreme Court decision ruling that ISPs are not considered "broadcasters":

On February 9, 2012, the Supreme Court of Canada confirmed that Internet service providers (ISPs) do not act as “broadcasting undertakings” in providing end-users with access to broadcasting content through the Internet. This ruling is significant as it addresses the scope of the regulatory jurisdiction of the Canadian Radio-television and Telecommunications Commission (“CRTC”) under the Canadian Broadcasting Act. The Supreme Court of Canada has now clearly demarcated the respective roles of various entities involved in the chain of Internet transmission, some of which communicate broadcasting content and some of which merely provide the means of communication.

The legal nature and scope of ISP activity from the standpoint of broadcasting law came before the Supreme Court of Canada in view of the increasing amount of broadcasting content (television programs, feature films, etc.) available over the Internet. This trend led the CRTC in 2009 to reconsider its 1999 New Media Exemption Order pursuant to which all new media content, including broadcasting content on the Internet, was exempt from CRTC licensing and the corresponding requirements to contribute to Canadian content.

In the 2009 proceeding, the CRTC reaffirmed its approach that it would not impose licences or any other material regulatory obligations on any providers of film and television content delivered and accessed over the Internet referred to as “new media broadcasting undertakings”.

However, during the CRTC hearing, several parties had submitted opposing views on whether ISPs were subject to the Broadcasting Act. A coalition representing the Canadian cultural industry argued that ISPs are integral to the transmission of broadcasting and should be viewed as equivalent to the role played by cable and satellite broadcasting distributors who are subject to regulation as broadcasters under the Broadcasting Act. The coalition proposed that the CRTC impose a levy on ISPs to fund the creation of new Canadian broadcasting content for new media platforms (similar to the levy paid by conventional Canadian broadcasters). The ISPs in opposition argued that their role was distinct from that of a programming or distribution undertaking and akin to a telecommunications common carrier (and therefore subject to regulation under the Telecommunications Act, rather than the Broadcasting Act).

In its determination following the 2009 hearing, the CRTC determined that a levy was unnecessary from a policy perspective. Nevertheless, it wished to resolve the legal question of whether ISPs are “carrying on a broadcasting undertaking” and are therefore subject to the Broadcasting Act. Rather than ruling on whether ISPs were broadcasting undertakings, the CRTC referred the issue to the Federal Court of Appeal for determination, asking the following question by way of “reference”: “Do retail Internet service providers (ISPs) carry on, in whole or in part, ‘broadcasting undertakings’ subject to the Broadcasting Act when, in their role as ISPs, they provide access through the Internet to ‘broadcasting’ requested by end-users?”

The Federal Court of Appeal released its decision on the CRTC’s reference question in July 2010. The Court first clarified that it was not examining the CRTC’s earlier determination in the 1999 new media proceeding that “broadcasting” does occur on the Internet. Rather it noted the following:

…the issue to be decided is whether, when providing access to the “transmission of programs …”, ISPs are broadcasting. The answer to this question hinges on a consideration of the findings of the CRTC as to how programs are transmitted on the Internet on the one hand, and the exact purport of the definition of the word “broadcasting”, on the other.

The Federal Court of Appeal noted the CRTC’s description in the reference question that in providing access to broadcasting, “ISPs do not select or originate programming or package or aggregate programming services” in providing for the transmission of content requested by their end-user Internet customers. This characteristic led the Court to conclude that an ISP is not carrying on a “broadcasting undertaking” under the Broadcasting Act as it has no control or input over the content made available to the end-user. Therefore, it does not “transmit” the program for reception by the public as per the statutory definition in the Broadcasting Act.

The cultural groups sought leave to appeal to the Supreme Court, which was granted in March 2011. In a relatively rapid timeframe, the Supreme Court heard oral argument in January 2012 and released its ruling on February 9, 2012. In brief reasons, the Supreme Court upheld the Federal Court of Appeal’s finding that the activities of intermediaries such as ISPs cannot be said to “transmit” the content when their role is limited to providing the means of transmission. In these circumstances, ISPs are exempt from the operation of the Broadcasting Act.

Among the key determinations of the Court were:

• The Broadcasting Act makes it clear that “broadcasting undertakings” are assumed to have some measure of control over programming which an ISP does not when it merely provides the mode of transmission;
• An ISP does not engage the policy objectives in the Broadcasting Act which focus on content goals (i.e., cultural enrichment of Canada, the promotion of Canadian content, programming standards and diversity) when it merely provides the mode of transmission;
• When providing access to the Internet, ISPs take no part in the selection, origination, or packaging of content. The term “broadcasting undertaking” does not contemplate an entity with no role to play in contributing to the Broadcasting Act’s policy objectives; and
• While cable television companies have control over content, by contrast ISPs have no such ability to control the content of programming over the Internet.

However, it is significant that the Court elected not to decide whether the nature of ISP activity (i.e., use of “routers”) prevents them from being characterized as a “telecommunications common carrier”. The Court determined that it did not need to decide this question in order to make its finding that ISPs were not “broadcasting”.

The Supreme Court’s Decision has provided much needed guidance on this contentious issue in Canadian broadcasting law.The Court’s ruling has implications not only for the issue of who among various entities involved in Internet broadcasting are subject to regulatory obligations under the Canadian Broadcasting Act but also with respect to the harmonized approach to copyright law over the Internet. With respect to the latter issue, the Supreme Court cited its previous determination with respect to copyright liability of ISPs in SOCAN v. CAIP 2004 SCC 45, in particular that ISPs merely act as a conduit for information provided by others and, therefore, they could not themselves be held to implicate the communication right under Canadian copyright law.

References:

Broadcasting Public Notice CRTC 1999-84;

Broadcasting Regulatory Policy CRTC 2009-329

Broadcasting Order CRTC 2009-660;

Re Canadian Radio-television and Telecommunications Commission 2010 FCA 178;

Re Broadcasting Act, 2012 SCC 4.

DOC Proposes Documentary Filmmaker Exception to Bill C-11

Bob Tarantino — Wed, 29 Feb 2012 09:34:00 -0500

Kudos to The Documentary Organization of Canada (DOC), which has released a proposed Exemption for Documentary Filmmakers to Circumvent Technical Protection Mechanisms in Bill C-11. I commend their efforts to do something which is not as common as it could be in Canadian copyright debates: actually proposing statutory language to address their concerns.

The DOC proposal is in response to the "technological protection measures" (TPM) provisions of Bill C-11, which, subject to certain limited exceptions, would make it an act of infringement to circumvent a TPM. Suffice it to say that the TPM provisions of the bill are the most contentious in the draft legislation. DOC argues that incorporating protection for TPMs into the Copyright Act (Canada), and more particularly making their circumvention constitute copyright infringement with no allowance for a fair dealing exception to such deemed infringement, constitute a "serious problem" because they "prevent documentary filmmakers from accessing the materials they need in order to produce their works". The DOC proposal goes into detail about the technical problems faced by documentary filmmakers who wish to make use of, for example, short clips from DVDs for inclusion in their documentaries and who would be forced to employ non-circumventing means to access the clips (basically, they would have to re-film the clip - which is apparently a lot more technically complex, and expensive, than you might have imagined).

This is the text of DOC's proposed "documentary filmmaker" exception to Bill C-11's TPM provisions:

41.1X (1)Notwithstanding Paragraph 41.1.(1)(a)herein, documentary filmmakers, may circumvent technological protection measure in order to incorporate copyrighted material into new works for the purposes of Fair Dealing (outlined in section 29 of the Copyright Act) provided that:

a. The documentary filmmaker is not able to to access the copyrighted material after reasonable attempts to do so and must therefore circumvent the technological protection mechanism; and

a. i) the documentary filmmaker has lawfully obtained the work, the performer’s performance fixed in a sound recording or the sound recording that is protected by the technological protection measure; or

ii) if an orphaned work or a work that is unavailable for purchase to the public that is protected by the technological protection measure, the documentary filmmaker has made best efforts to legally obtain the material; and in all cases

b. the documentary filmmakers has reasonable grounds for believing that circumvention is necessary to fulfill the purpose of the use of the material in the documentary.

(2) However, a person acting in the circumstances referred to in subsection (1) is not entitled to benefit from the exception under that subsection if the person does an act that constitutes an infringement of copyright or an act that contravenes any Act of Parliament or any Act of the legislature of a province.

(3) Paragraph 41.1(1)(b) does not apply to a person who offers services to the public or provides services for the purposes of circumventing a technological protection measure if the person does so for the purpose of incorporating the material into a new documentary work for the purposes of fair dealing.

(3) [sic] Paragraph 41.1(1)(c) does not apply to a person who manufactures, imports or provides a technology, device or component for the purposes of circumventing a technological protection measure purpose of incorporating the material into a documentary work for the purposes of fair dealing; and uses that technology, device or component only for that purpose.

One might quibble with the specifics of the drafting (e.g., I'm not entirely sure how subclause (2) is intended to operate, since it seems to short-circuit the effect of subclause (1)), but I think the proposal, like DOC's Guidelines to Fair Dealing Practices for Documentary Filmmakers, is a productive exercise and should be applauded. Hopefully the proposal will engender many responses.

The proposal would, if enacted, certainly be beneficial to documentary filmmakers. My biggest concern (and this is not a criticism of DOC, who are doing their job by advocating for their members and other stakeholders) is that proposals like this clutter the Act - to the extent possible, we should avoid particularism in copyright statute drafting even if only to make the Act less byzantine (if you're ever bored, take a waltz through the "libraries, archives and museums" provisions of the Act; to witness the reductio ad absurdum of copyright drafting, see Section 32.2(2) of the Act, the "agricultural or agricultural-industrial exhibition or fair" provision). We would be better served by principles-based exceptions (e.g., circumvention of TPMs is not an infringement if done for a fair dealing purpose) - but since such an approach goes against the trend-line, the DOC proposal is likely the best we'll be able to do in the short term.

This Sponsortunity brought to you by Wheat Thins.

Sara Perry — Tue, 28 Feb 2012 13:41:43 -0500

On Feb. 23^rd, Stephen Colbert included an integrated sponsorship on The Colbert Report. Colbert refers to these product integrations as brand-funded requests from the network and this most recent “Sponsortunity” was brought to you by Nabisco’s “Wheat Thins” crackers. Colbert goes on to satirically discuss the product and the brand’s ‘important’ role in our everyday lives based on a directional memo provided by the brand. While viewer’s may have been ‘cracking’ up over the broadcast some of the references may have had Nabisco execs tuning out.

Colbert refers to an “actual memo” he received from the makers of Wheat Thins for the purposes of the sponsorship, which details what the role of the Wheat Thins brand is (and is not) and provides instruction for how he should (and should not) interact with the product on the show. Colbert quotes from the memo sarcastically referencing the importance of Wheat Thins in our lives as the “snack for anyone who is actively seeking experiences” and that “Wheat Thins keep you on the path to, and proud of, doing what you love to do no matter what that is…” For example, “driving kids to practice, watching a movie” and “arson”, as added by Colbert. He goes on to discuss further descriptions in the memo, including that “Wheat Thins are not a creator of isolated, un-sharable experiences; they are a connector of like-minded people encouraging sharing”. And Wheat Thins are “not an exclusive or exclusionary brand” so, as Colbert jokes, “blacks, jews get in here!” In addition, Stephen reads from the memo that the Wheat Thins cracker brand is “not a crusader or rebel looking to change individual paths (or the world)”. The memo further goes on to caution against showing over consumption and requests that Colbert not show (as in a bowl), or eat, more than the recommended serving size of 16 crackers. This leads Colbert to obnoxiously stuff 16 crackers in his mouth at one time and then, in a rebellious move, to attempt to add a 17^th cracker, which results in the broadcast cutting out citing “technical difficulties”. The scene is followed by a ‘fauxpology’ – an apology made to appear as though it was either network or brand-mandated but which is clearly incorporated into the sketch as a continuation of the brand mockery. The skit is likely to be perceived as nothing more than a good natured jab at the brand for its attempts to control the parameters of the sponsorship. For all execs participating in branded entertainment, however, it is also a good reminder of the potential pitfalls involved in engaging in product integrations.

Product placements in film, television and other entertainment vehicles are not uncommon. They come in many different forms, from passive product placement, where products can been visually seen or are referred to in commentary or dialogue, to active integration and usage by the hosts and/or characters of the entertainment program. A classic and well known example of product integration is Coca-Cola’s product placement on American Idol where large Coca-Cola branded glasses are shown prominently placed in front of each judge and from which the judges drink (presumably a Coke product) for the duration of the show. Product integrations provide another avenue by which brands can reach consumers, and they can be enormously successful (e.g., Reese’s Pieces in E.T.; Ray Bans in Risky Business; Mini Cooper in The Italian Job). On the flip side, however, they also bring certain inherent risks and additional concerns. There is no specific model for product integrations. Brands may pitch to have their product included in a particular program or the producers may (with or without permission) include a brand as a fundamental element of the script and/or character development. Product integrations are secured in a number of ways. For example, they can be paid for by the brand, the products themselves may be offered in a barter exchange for inclusion in the program without any payment, or the placement may be provided at the producer’s cost – this usually occurs when the inclusion of the product is an essential element of the plot or will add some value to developing the strength of a show’s character.

With traditional advertising, the advertiser has complete control over the messaging, content and placement of the advertisement. This includes what is said about the product, when it is said, and how and when the product is used (or not used). In contrast, product placement deals (depending on the particular arrangement between the brand and the producer) usually require at least some relinquishment of control over these factors. Too much control can cause the integration to appear opportunistic and transparent, which may degrade the authenticity and creativity of the programming and alienate viewers. On the other hand, having no parameters over the use of the product may backfire resulting in the product being used in a derogatory or inappropriate manner, which can have a significant negative impact on the value of the brand and, ultimately, the bottom line. So, regardless of whether it’s an integration in online, film or television, or the genre is live action, comedy or drama, or the program is scripted, unscripted, news or reality-based, brands engaging in product integrations must participate in a bit of a balancing act between relinquishing control and taking on risk.

The parameters of the agreed upon deal are usually governed by contract. Typically speaking, however, product integration contracts will include a bar against injunctive or equitable relief, so that any claim a brand may have for a violation of the terms of the integration will be limited to an action for damages and the show will continue to be marketed, sold and distributed without alteration or removal of the offending product integration.

Colbert’s presentation of Wheat Thins in the “sponsortunity” segment appears to be an example of a brand’s failed attempt to limit or control the form of the integration. That said, Wheat Thins must have been comfortable assuming the risk of Stephen Colbert himself. Anyone who has ever watched The Colbert Report knows that Colbert doesn’t often do what he’s told. Colbert ends the segment by saying “join me next time when I will read the memo from someone else who gave me money.”

You're Getting Sued for What? An E&O Odyssey (Pt 7)

Bob Tarantino — Tue, 28 Feb 2012 13:27:00 -0500

This post is part of an occasional series highlighting the type of risks which film and TV producers face and which are supposed to be covered by E&O insurance, and which aims to demonstrate that what might seem to a producer to be paranoia on the part of their lawyer is, in fact, well-founded. These posts will point to actual lawsuits which have been filed against film/TV producers for various alleged rights infringements (whether copyright, trade-mark, right of publicity, or otherwise) - and which inform the nit-picking approach taken by producer's counsel.

Eriq Gardner at Hollywood, Esq. is reporting that visual artist Maya Hayuk is suing RCA Records and Sony Music over the inclusion of one of her works of art in a music video. The lawsuit has been filed in Massachusetts federal court. The work in question, entitled "Sunshine", is a mural which appears to be painted on a wall in Brooklyn (this page has what purports to be a picture of the work, the picture apparently being a still from a different music video in which the work appeared). The video in which the infringing copy appears, for a song called "Only Wanna Give It to You", can be found here - the purportedly infringing depiction of "Sunshine" can be seen at around the 2:00 and 3:00 marks.

A few items to note about the lawsuit:

the mural only appears for an aggregate of about ten seconds in the clip, and does not appear to ever show up in its entirety in the video - the shots are all fairly tightly focused on the performers, with only portions of the mural viewable on the wall in the background
the mural is on the side of a building, viewable from the public sidewalk - it would be virtually impossible to film the building (at least from this particular angle) without depicting the mural

What might potential defences, under Canadian copyright law, be to such a claim? One could try to argue that the "incidental inclusion" provision found in Section 30.7 of the Copyright Act (Canada) applies. As I explained in detail in this post at IPilogue, that would be a difficult argument to succeed with: the section requires that the inclusion of the copyrighted work be both "incidental" (arguably met in this case) and "not deliberate" - which is almost certainly not the case here, since the director of the video clearly intended to shot the scene at the particular location with the mural in the background. None of the "fair dealing" exceptions found in the Act would apply. What about the fact the mural is in a "public place"? Still not going to help us: Section 32.2 of the Act which allows the reproduction in a "cinematographic work" (which would include a music video) of a work that is "permanently situated in a public place or building" only applies to sculpture and works of "artistic craftsmanship" - and a mural is decidedly not a sculpture or a work of artistic craftsmanship.

The launching of the lawsuit offers a timely reminder for those conducting E&O clearance on a film clip: the inclusion of virtually any copyrighted work (or an identifiable portion thereof) should prompt an assessment of whether the depiction of the work has been properly licensed or whether a fair dealing or other exception to infringement might apply.