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Lessons from the Drake-Jimmy Smith copyright dispute: Applying the US’s fair use summary procedures to Canadian fair dealing

Drake and others successfully defeated a claim for copyright infringement for sampling a jazz musician’s composition in the hit song “Pound Cake/Paris Morton Music 2” (“Pound Cake”).

In February 2020, the United States Court of Appeals for the Second Circuit released its summary order dismissing the appeal of the Estate of James Oscar Smith and Hebrew Hustle Inc. The Second Circuit upheld the lower court’s 2017 finding that Pound Cake’s sampling of “Jimmy Smith Rap” (“JSR”) constituted “fair use” (the American equivalent of Canada’s “fair dealing”). Though there are nuanced differences between fair dealing and fair use,[1] at their core, both concepts enable users to use copyrighted expression without the owner’s permission without being found liable for copyright infringement.

The litigation procedure used by the American court in this case informs available procedures that Canadian courts can adopt when dealing with claims for copyright infringement. If a case ultimately turns on whether the defendant’s use of copyrightable expression constitutes fair dealing, parties should be able to use summary proceedings to determine these issues, like Drake did.

Jimmy Smith was not a fan of Hip Hop

The late James Oscar Smith (aka Jimmy Smith) was a popular American Jazz musician. In 1982, he recorded the album Off the Top. The first six tracks are instrumental. The last track is JSR, a spoken word recording. In JSR, Jimmy Smith raps:

Jazz is the only real music that’s gonna last. All that other bullshit is here today and gone tomorrow. But jazz was, is and always will be.

In 2013, Cash Money Records and Universal Republic Records released Drake’s album Nothing Was the Same. Like JSR, the track named Pound Cake (featuring Jay Z) is the last song in the album. The opening to Pound Cake samples approximately 35 seconds of JSR. Jimmy Smith’s estate would not have granted a license for the composition because Jimmy Smith “wasn’t a fan of hip hop”. His estate sued for copyright infringement.

Summary judgment available

The parties brought cross motions for summary judgment. The court dismissed the plaintiff estate’s action. The court held that the transformative nature of Pound Cake brought it within the spectrum of fair use, which is an affirmative defence to copyright infringement. The court made this finding despite findings that it could not determine whether (i) the plaintiffs’ retained copyright in JSR or (ii) Pound Cake’s sampling copied the constituent original elements of JSR. Both issues would have been left for the jury if the court could not make an affirmative finding of fair use in the motion.

The court accepted the defendants’ argument that Pound Cake fundamentally altered the message of the original work. Drake edited the JFR recording from “Jazz is the only real music that’s gonna last” to “only real music is gonna last”. In doing this, the court found that Drake transformed Jimmy Smith’s dismissive comment about other trendy music into a statement on the relevance and staying power of “real music”, regardless of genre. 

Although the lower court cautioned that courts are typically wary about granting summary judgment in copyright matters, they will do so when there are no genuine issues of material fact in dispute. This was one such case in respect of the fair dealing analysis. The court noted that summary judgment in fair use cases may be appropriate where there is only a slight chance that additional, non-cumulative evidence will be presented at trial.

Applying Drake’s litigation tactic in the north

If the Pound Cake dispute had not been resolved at summary judgment, the parties would have spent significant resources trying to prove whether copyright subsists in a 40-year-old composition and whether the defendants engaged in any substantial taking. In this case, there was a dispute over copyright ownership in JSR. The main witness on ownership in the work, Jimmy Smith, was deceased. Because the case turned on whether Drake’s sampling of JSR constituted fair use, the court was able to adjudicate the dispute without making factual findings on Mr. Smith’s recording of JSR in the 80’s (or hearing lengthy evidence on this issue).

In Canada, courts are instructed to use procedures that provide for the just, most expeditious and least expensive determination of civil proceeding on the merits. Like fair use in the United Sates, if a Canadian court finds that the defendant’s use of the plaintiff’s copyrighted work constitutes fair dealing, the defendant will not be held liable for copyright infringement. If the court must undertake a fulsome trial of all issues, despite the case turning on the fair dealing analysis, all parties will have needlessly spent a tremendous amount of resources on issues that do not resolve the key fair dealing issue. In a copyright infringement lawsuit, parties can spend years and hundreds of thousands of dollars on discovery, production disputes, and damages quantification.

The Federal Court of Canada has a robust case management regime, which allows parties to agree to have the court adjudicate some or all of the issues in dispute. Summary judgment and summary trials in the Federal Court are designed to promote affordable, timely and just adjudication of civil claims. The Federal Court is the preferred (though not exclusive) jurisdiction to resolve copyright disputes because its jurisdiction covers the entire country, not just one province.

When cases turn on a single issue that is not fact-driven, parties can and should submit that issue for summary adjudication. If the allegedly infringing work constitutes fair dealing, there is no need to quantify damages, assess whether there is a substantial taking, or verify the chain of title in the copyright. This can save parties years of headache, uncertainty, and substantial legal bills.

[1] For example, fair dealing has a “closed” list of enumerated purposes unlike fair use; fair dealing has open-ended set of 6 “fairness” factors which may or may not be used in every analysis, and fair use has statutorily-prescribed set of 4 factors; and fair use analysis has been informed by First Amendment/free speech considerations, and fair dealing has not engaged in this analysis at length.

Lessons from the Drake-Jimmy Smith copyright dispute: Applying the US’s fair use summary procedures to Canadian fair dealing

COVID-19-related resources brought to you by Dentons

As the entertainment industry in Canada and internationally struggles with the implications of dealing with COVID-19, we are entering uncharted territory. Beginning last week, major studios, streamers and broadcasters from around the world announced that they would be shutting down or suspending their productions in an effort to deal with the widening pandemic and slow its progress. Indie Wire online has provided a sobering summary of all of the productions impacted by COVID-19.

The situation is rapidly evolving and Dentons has established some resources for clients to provide helpful insights on COVID-19-related issues in a number of countries around the world. 

The Dentons Global COVID-19 hub can be found here – https://www.dentons.com/en/issues-and-opportunities/covid-19-coronavirus-hub

The Dentons Canada COVID-19 hub can be found here – https://www.dentons.com/en/issues-and-opportunities/covid-19-coronavirus-hub/canada-covid-19-coronavirus-hub

A recent article on the Dentons Canada COVID-19 hub may be useful to clients grappling with the issue of force majeure and whether COVID-19 qualifies as such an event. The article can be found here.

Another article on the Dentons Canada COVID-19 hub outlines the US travel restrictions for those clients with international ties. The article can be found here.

COVID-19-related resources brought to you by Dentons

What makes a good “morals clause”?

Last Wednesday, a jury found that former talk show host Tavis Smiley violated the morals clause in his contract with a broadcaster. The verdict reinforced the notion today that morals clauses can be vital when dealing with a public figure.

Due to a growth in damaging revelations surrounding celebrity misconduct in the #MeToo era, morals clauses have become a staple in the media and entertainment industries. A morals clause is a contractual tool intended to give hiring parties a way out of their agreements if the hired party becomes a liability to their business through their actions or inactions.

Producers hiring talent for their productions, and brand owners looking to secure endorsement deals for their products, have a particular interest in perfecting these now common provisions. So what makes a robust morals clause?

1. What

A morals clause should contain a full and detailed description of what constitutes the type of behaviour that allows the hiring party to terminate or modify the agreement in question. Although it is ideal to cover off a broad scope of activities in these clauses, the devil can be in the lack of details. If the description of behaviours is too broad, it leaves the language open to interpretation and dispute among the parties – this could prolong the contractual relationship in question to the detriment of the hiring party.

2. When

A morals clause should state that the prohibited behaviour may have occurred at any time – i.e., before or during the engagement in question, while rendering services and during personal time. Commonly, morals clauses will address behaviour during the engagement, but neglect to cover off prior activities, which may not be widely known. The nature of the hiring party’s relationship with the hired party will dictate how willing they are to restrict the scope of time covered under a particular morals clause.

3. Where

A morals clause should state that the prohibited behaviour may have occurred in any and all jurisdictions, as applicable. Given the increasing global nature of audiences and markets, it would erode the value of a morals clause if it did not apply to conduct in a foreign jurisdiction, or conduct in a domestic jurisdiction that only affected foreign audiences.

4. Who

A morals clause shouldstate who will be considered when determining whether the hired party has caused harm as a result of their actions or inactions. Hiring parties may not be the only entities requiring protection from the threat of poor public relations due to celebrity misconduct. For example, distributors, brand partners and financial backers may wish to be named amongst those who might suffer damage due to breach of a morals clause.

5. “And then what”

A morals clause should provide clarity on the remedies the hiring party may have, should a hired party breach the morals clause. Remedies may involve termination (with or without a cure period), removal of credit (subject to guild or union requirements), reduction in payment, arbitration/mediation and discipline (more commonly seen for athletes), among other solutions. The key is to consider all actions the hiring party may want to take upon breach and lay out a detailed plan on how such actions will be taken. A defined plan will reduce the likelihood of procedural arguments over how a morals clause may be enforced, should it be necessary.

Many morals clauses will not encompass each of the elements above, depending on the balance of negotiating leverage between the parties and the parties’ overall relationship. Nevertheless, aiming for clarity and comprehensive contingencies in a morals clause will increase any producer or brand owner’s chance at saving time, money and face in the future.

For more information, please contact Caitlin Choi or another member of Dentons’ Media and Entertainment group.

What makes a good “morals clause”?

“Lights, Camera…Take-off”: Legal Considerations When Hiring a Drone Services Operator for Filming

The entertainment industry was one of the first to put drones into use and take advantage of the “better, faster, cheaper” solutions they provide for filming. While the appeal of using the technology is undeniable, hiring a competent drone services operator to film on set is not without its potential pitfalls.

One of the biggest issues for producers is confirming that the drone operator hired has sufficient experience and knowledge to perform the required tasks with expert precision and skill. Transport Canada’s recently enacted regulatory amendments to Part IX of the Canadian Aviation Regulations (the “CARs”) require drone pilots to meet specific knowledge criteria in order to be licensed to fly – a clear step towards “professionalizing” the drone piloting industry. However, flying skill and knowledge of air rules is not all that make a competent drone services operator; they must be attuned to the specific challenges and risks associated with filming on set.

The importance of hiring a competent drone operator is tangible. It directly contributes to more efficient and cost-effective filming. The preparedness and professionalism of a competent operator will also, in many cases, avoid potential accidents that may cause delays in filming or even lawsuits for damage or losses incurred. In the unfortunate situation where an accident occurs, the due diligence steps taken by a production company in hiring reputable and qualified drone operators will assist the production company in defending allegations of negligence made against it.

Here are some key questions to consider before hiring a drone services operator to assist with filming on a production set:

  1. Do they have the right drone for the job?

There is no “one size fits all drone”. Drones have different take off mechanisms, greater levels of versatility, and can carry different payloads, making some more suited than others for filming in the specific conditions required by the production company. Speak to your intended operator about what equipment they recommend to complete the job to get a sense of whether they are exercising their professional judgment to determine what meets the production company’s needs rather than simply trying to make their existing drone fit for the job.

2. Do they have standard operating procedures and emergency procedures?

A drone operator that has in place standard operating procedures (“SOPs”) for dealing with the many variables applicable to operations are generally more trustworthy. Further, emergency procedures in place ought to give the production company similar confidence that the operator “expects the unexpected” and has an action plan in place to keep the crew, actors, production equipment and any bystanders safe from harm. While the CARs do not currently require drone operators to have SOPs or a safety management system in place, competent operators will have already turned their minds to this.

3. Do they have insurance?

While holding liability insurance is no longer a regulatory requirement in Canada, there is good reason to require the drone services operator you hire to hold insurance. In aviation, accidents happen and the litigation arising from an accident can be costly and time-intensive. Many qualified drone services operators continue to hold liability insurance (and other forms of insurance) for their operations. Ensure the intended operator holds insurance, and seek to have the production company added as an additional insured to the policy.

4. Will they enter into a written agreement for their services?

The hallmark of a professional operator is one who regularly uses written agreements in their dealings with their customers. Key aspects of any agreement from drone services specify that the operator will be responsible for complying with all applicable laws (including the CARs, the Aeronautics Act, municipal bylaws, and provincial trespass to property acts), detail of the scope of the work and the deliverable, and include copyright provisions, hold harmless clauses in favour of the production company, and data collection and protection process provisions.

If you wish to discuss this post or its possible implications for your business, please contact Kathryn McCulloch at Dentons.

“Lights, Camera…Take-off”: Legal Considerations When Hiring a Drone Services Operator for Filming

Marking your Territory: Key Amendments to the Trademarks Act and the Effect on the Entertainment Industry

On June 17, 2019, long-awaited amendments to the Canadian Trademarks Act came into effect. Since that time, several non-traditional trademarks were filed, including eight applications for a sound, 15 applications for a taste, and four applications for a scent.

This article outlines three key changes to the Trademarks Act and how these changes affect members of the entertainment industry.

1. Goodbye Use, See You in Three Years

Use of a mark is no longer a requirement for registration. Prior to June 17, 2019, to proceed to registration, an applicant needed use of the mark in Canada or a previously registered foreign trademark. With this legislative amendment, applications can now proceed to registration, regardless of whether the applicant has use of the trademark in Canada or a foreign registration.

Because of this change, applications can proceed to registration faster: applications will not be held in abeyance pending confirmation that the applicant has use of the trademark in connection with each of the goods and services listed in the application. Correspondingly, more marks will likely proceed to registration.

To respond to the increase of registered marks, we anticipate an increase in Section 45 non-use expungement proceedings in the next few years. These are summary proceedings in which a person asks the Trademark Office to remove older marks from the register that have not been used in the last three years. This proceeding aims to clear the “deadwood” from the trademark register.

Anyone can ask the Trademark Office to forward a Section 45 notice (i.e. the requirement that the registered trademark owner furnish evidence of use of the trademark) to a person who owns a trademark that has been registered for at least three years after paying the $400 government fee. Upon receipt of this notice, the trademark owner must furnish evidence that it has used the trademark in the preceding three years, failing which, the Trademark Office will expunge the trademark.

2. Classify Goods and Services: It’s Nice

The amendments to the Trademarks Act also made it mandatory for applicants to categorize the goods and services listed in the application in accordance with the Nice Agreement. The Nice Agreement governs an international system that categorizes goods and services into 45 different categories. With this change, applicants must also pay a government fee for each additional class of goods and services listed in their trademark application. Prior to June 17, 2019, there was a single fee for a trademark application, regardless of the number of classes of goods and services included in the application.

While this classification system increases the cost of a trademark application, it reduces the risk of a proliferation of marks on the register. The increased cost (hopefully) deters trademark trolls from filing trademarks in connection with a litany of goods and services. 

3. Unique Marks Can Proceed to Registration

Trademarks are no longer limited to typical word or design marks. Applicants can also apply to register “signs” that include three-dimensional shapes, holograms, moving images, modes of packaging goods, scents, tastes and textures. If an applicant is going to register a “sign”, it must also furnish satisfactory evidence that this sign was distinctive on the date it filed the application.

Conclusion: Use It, Don’t Lose It, or Miss Out On It

With these amendments to the Trademarks Act, producers and other participants in the entertainment industry must be vigilant when selecting marks for their projects. Given the potential of a proliferation of trademarks on the register, applicants must be mindful as to whether trademarks on the register filed in connection with other goods, such as clothing and electronics, limit their ability to generate merchandise revenue.

To get ahead of this issue, producers may consider filing comprehensive trademark applications in several classes of goods and services before their projects air or grow in popularity. While a multi-class trademark application may increase the upfront cost of the trademark application, this cost pales in comparison to the cost associated with fighting with unscrupulous applicants who try to capitalize on a project’s goodwill.

Members of the entertainment industry should also take stock of their intellectual property portfolios to consider whether they want protection of any unique marks such as sounds, three-dimensional shapes, or moving images, which are now protectable.

Regardless of the nature of the trademark, trademark owners must remember to use the mark in the three years following registration, failing which, they risk losing the trademark in connection with the unused goods or services, lest they become the “deadwood” that the Trademark Office clears.

Marking your Territory: Key Amendments to the Trademarks Act and the Effect on the Entertainment Industry