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Online Endorsements and “Astroturfing”

Having warned consumers: “Don’t buy into fake online endorsements” last year, the Competition Bureau sent a strong message to the media and marketing industry against astroturfing yesterday.  The Bureau announced that it has entered into a consent agreement with Bell Canada addressing employee-generated reviews and ratings of Bell apps on the iTunes App Store and the Google Play Store.  While Bell reportedly moved quickly to have the reviews and ratings taken down, the Competition Bureau evidently considered that the damage was already done:

“these reviews and ratings created the general impression that they were made by independent and impartial consumers and temporarily affected the overall star rating for the apps.”

Bell has agreed to pay an administrative monetary penalty of $1.25 million and has committed to enhance its corporate compliance program.  The company also proposes to host a workshop to promote “Canadians’ trust in the digital economy”, including online review integrity.

The Canadian Competition Act contains criminal and civil prohibitions against materially false or misleading representations.  The general impression conveyed by the review, rating, tweet, post or other representation is a key element of determining whether it is misleading.

As part of its education, outreach and enforcement programs, the Bureau recently devoted its first edition of The Deceptive Marketing Practices Digest to online advertising, with a focus on online reviews.  The Bureau made a point of noting that “astroturfing is a problem that crosses borders” and highlighting its “excellent working relationship” with its international partners, including the US Federal Trade Commission.   In yesterday’s announcement, the Bureau invited consumers who believe that they have been misled by fake online reviews to call the Bureau’s Information Centre or to file a complaint on its website.

The recent activity and statements around online reviews make it very timely to revisit (or develop) internal compliance policies.  These can include examples of acceptable and unacceptable practices for reviews and ratings, endorsements, disclaimers, and special promotions such as sponsorships and contests.

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Online Endorsements and “Astroturfing”

The Complexities of Canada’s Extension of Copyright Protection for Sound Recordings

On June 23, 2015, Royal Assent was given to Parliament’s Bill C-59, otherwise known as the Economic Action Plan 2015 Act, No. 1, otherwise known as the federal government’s 2015 budget. Contained in the legislation are provisions which amend the Copyright Act (Canada) to extend the duration of Canadian copyright protection for sound recordings. For how long has copyright protection been extended? Well… it’s complicated – most reports have described the change as extending protection from 50 years to 70 years; but that description is incomplete. A more complete description would say that copyright protection for sound recordings has been extended from 50 years from the end of the calendar year in which recording (or “fixation”) occurred to 70 years from the end of the calendar year in which publication occurs. But even that remains incomplete – here is a chart which attempts to summarize the changes (which are found in Sections 81 and 82 of Bill C-59, and which replace Sections 23(1)(b) and 23(1.1) of the Copyright Act):

Duration of Canadian Copyright in Sound Recordings


Copyright Act

Recorded (but no publication)


Before June 23, 2015 50 years 50 years
After June 23, 2015 50 years Earlier of (i) 70 years from publication and (ii) 100 years from recording


“Publication” is defined in Section 2.2 of the Copyright Act as meaning “making copies of a sound recording available to the public”; but the provision goes on to say that “publication” does not include “the performance in public, or the communication to the public by telecommunication” of a sound recording. That has some interesting implications for what I’ll call “amateur” or “non-commercial” sound recordings. As you can see from the foregoing table, while most “commercial” sound recordings (such as the recordings released by a major record label) will benefit from a term of protection of at least 70 years from the year of publication (i.e., the year in which the record was “released” for commercial sale to the public), a 70 year term will not apply to many “amateur” or “non-commercial” sound recordings unless copies of them are made available to the public. So, for example, the sound recording that you create when you play a cover song in your bedroom and then upload to YouTube – that will only be protected for a period of 50 years from the year of recording, because uploading a clip to YouTube does not constitute “publication” for purposes of the Copyright Act (in order to obtain the full 70 year term of protection, you’d have to make copies of the recording “available to the public”, for instance by offering CDs for sale (or files for digital download). It is therefore dangerous to assume that all sound recordings will benefit from a 70 year term of protection – some will have only a 50 year term (i.e., recordings for which “publication” never occurs, or only first occurs more than 50 years from the year of recording), while others will be protected for 70 years from the year of public release, which may be much later than the year of initial recording.

The new provisions also cap the duration of protection: not every sound recording which achieves “publication” will benefit from 70 years of protection from the year of its publication – there is an “outside date” of 100 years from the year of recording. Let’s imagine a sound recording which takes place in 2015 in the course of the creation of a new album by, say, current Canadian star Shawn Mendes; we’ll call the track “Party’s Over”. Upon recording (or “fixation”) of the track, “Party’s Over” will benefit from a period of copyright protection equal to 50 years (i.e., copyright would expire on December 31, 2065). If “Party’s Over” gets released by Shawn’s record company to the public in 2015, then the track will benefit from a period of copyright protection equal to 70 years (i.e., copyright would expire on December 31, 2085). But let’s imagine that the record company is unhappy with “Party’s Over” for some reason, and elects not to release it to the public – instead they elect to “keep it in the vault” so to speak. In the absence of publication, the track will still benefit from the “default” period of protection of 50 years, unless and until copies of it are made available to the public (i.e., “publication” occurs), in which case it will benefit from a period of copyright protection expiring on the earlier of 70 years from the year of publication or 100 years from the year of recording. So, if “Party’s Over” gets released to the public as part of a Shawn Mendes “Greatest Hits” package in, say, 2020, then it will be protected by copyright until 2090 (i.e., 70 years from publication) – but if the track doesn’t get released until, say, 2050 (as part of career retrospective, let’s say), then it will be protected until 2115 (i.e., 100 years from fixation), not 2120 (i.e., 70 years from publication). Trust me, this kind of thing is going to be giving lawyers conniptions for decades to come.

There are two other aspects to the amendments to the Act which bear attention:

  • there is no “revival” of copyright in sound recordings whose protection had expired on December 31, 2014 – anything which was in the public domain on June 23, 2015 remains in the public domain
  • the amendments also have the effect of extending the duration of copyright protection in certain performer’s performances which are fixed in a sound recording – while the “default” duration of protection for performances remains at 50 years, if a sound recording in which the performance is fixed is published before the copyright expires, the copyright in the performances continues until the earlier of (i) the end of 70 years after the end of the calendar year in which the publication occurs and (ii) the end of 100 years after the end of the calendar year in which the fixation of the performance (i.e., the recording) occurred

UPDATE: June 25, 2015 – I have revised the table to correct a possible misinterpretation: the left-most column is not intended to set out the year of the recording, but rather the year of the Copyright Act, with the goal of showing the change as between the Copyright Act before the 2015 budget, and the Copyright Act after the 2015 budget. For clarity, any sound recording which was still protected by copyright in 2015 will be subject to the new regime – the analysis is not different for sound recordings created before the budget implementation bill received Royal Assent on June 23, 2015.

The Complexities of Canada’s Extension of Copyright Protection for Sound Recordings

Trivial Thoughts on Substantial Parts

What constitutes a “substantial part” of a copyrighted work is an endlessly diverting question – both because copyright law tends not to draw “bright lines” (meaning that lawyers are forever doomed to conducting “quantitative” and “qualitative” analyses) and because clients routinely want definitive answers which drive lawyers to distraction (“what do you mean you don’t know whether a fifteen-second clip from a movie infringes copyright?”). Canadian courts have been remarkably (but understandably!) coy in fashioning their interpretations of that portion of Section 3(1) of the Copyright Act which states that copyright means “the sole right to produce or reproduce the work or any substantial part thereof“. The Copyright Board’s recent decision (released May 23, 2015) in the Access Copyright (Provincial and Territorial Governments) 2005-2014 tariff provides some examples of a decision-maker assigning some numbers to the notion of a “substantial part”.

“Substantial part” could be seen to operate as a euphemism – in some ways it’s simply a substitution for “non-trivial”, “important” or “significant”. Thus, the Supreme Court of Canada in the CCH v LSUC (2004 SCC 13) decision stated, in its discussion of fair dealing, that where “the amount taken from a work is trivial, the fair dealing analysis need not be undertaken at all because the court will have concluded that there was no copyright infringement” – “substantial part” operates as a threshold matter for whether we are in the realm of copyright infringement at all. If something less than a “substantial part” has been copied, the copier has not encroached on the exclusive rights of the copyright owner in the first place. The concept of “substantial part” bears impressive gate-keeping powers. It is usually wielded via impression: the Supreme Court itself has described it as “a flexible notion … a matter of fact and degree”, to be decided “by its quality rather than its quantity” (see Robinson v Cinar, 2013 SCC 73 at para. 26). It is thus noteworthy when we are provided with a decision which seems to indicate where we can “draw the line” so to speak in determining what constitutes a “substantial part”.

In its Access Copyright tariff reasons, the Copyright Board stated the following in the context of determining a “substantial part” of a literary work (emphasis added):

[115] In this matter, without the benefit of a qualitative analysis of each of the copied works, and without even knowing which portions of a work were copied, in our opinion the amounts proposed by the Consortium, being 1 to 2 pages of a work, are reasonable approximations in establishing non-substantiality. However, since 1 to 2 pages of a short work can amount to a great portion of that work, we further limit this approximation by requiring that the copying of 1 to 2 pages not constitute more than 2.5 per cent of the entire work, the percentage equivalent to what the Board had previously considered not to be substantial reproductions in its Satellite Radio Services decision.

The final reference there is worth highlighting, as it offers a lens into a different type of work – for that we turn to paras. 97-98 of the Copyright Board’s reasons for its decision in Statement of Royalties to Be Collected by SOCAN, NRCC and CSI in Respect of Multi-Channel Subscription Satellite Radio Services (6 May 2009, Corrected Version):

[97] Thus, the question is reduced to whether the 4 to 6 second buffer is a substantial part of an entire work. The rolling 4 to 6 seconds of a musical work is not an aggregate of an entire work. At no time does a subscriber possess a series of 4 to 6 second clips which when taken together would constitute a substantial part of the work. It matters not that over time the totality of all works transmitted are reproduced. We are dealing with a rolling buffer and at no time can we line up all of the fragmented copies amounting to one complete copy of a musical work. At no point in time can one extract from the RAM of the receiver more than 4 to 6 seconds of a song (or more accurately of a signal). More importantly, at no time is there a choice as to what goes in there or when it comes out.

[98] In our opinion, the 4 to 6 second buffer fails to satisfy the substantiality requirement. It is not a substantial part of the protected work.

To summarize: in the view of the Copyright Board, 4-6 seconds of the average pop song with a duration of a few minutes is not a “substantial part” of a musical work/sound recording, and 1-2 pages of a literary work falls below the substantiality threshold, so long as that 1-2 pages does not constitute more than 2.5% of the work in question. I don’t want to make too much of these holdings – Copyright Board decisions are not court decisions, and the Access Copyright decision, in particular, is qualified in the Board’s own words as being without the benefit of a quantitative analysis. The 2015 Access Copyright decision may yet be appealed to the Federal Court. Assessing the “substantial part” of a musical work is inherently going to be a much more impressionistic exercise (because the “valuable” part of the song, such as the chorus, is usually more finite than the valuable part of a literary work). But for the moment, these two decisions at least provide some indication of where the substantiality threshold might lie, or, at worst, an indication of where to begin the assessment.

Trivial Thoughts on Substantial Parts

Ontario “Grandfathers” Tax Credit Rate Changes

When Ontario announced its 2015 budget (for earlier Signal coverage see here), one particular proposed change was met with… well, let’s call it “concern” from the Ontario film and television production community: the reduction of the OPSTC and OCASE tax credits from 25% and 20% to 21.5% and 18%, respectively, was effective immediately (i.e., on April 23, 2015). In a production environment which prides itself on the stability of its tax credit regime, and given the long lead-times by which production scheduling occurs, a reduction with immediate effect would have had significant, in some cases even catastrophic, impact on film and TV projects (to say nothing of sending a cold wind blowing through the accountants’ offices where decisions about whether to film in Ontario are made). Following vigorous lobbying, however, the Ontario government has implemented a “grandfathering” mechanism which will apply the old rates to certain productions.

Grandfathering of OPSTC (Ontario Production Services Tax Credit)

The rate of 25% will apply to qualifying production expenditures  incurred after April 23, 2015 and before August 1, 2016 if the following criteria are satisfied:

  1. The production company must have entered into at least one qualifying written agreement in respect of a qualifying production expenditure.
  2. The qualifying written agreement must be entered into with a person at arm’s length with the production company.
  3. The qualifying written agreement must satisfy one of the following criteria: (a) an agreement for the services of a producer, a director, a key cast member, a production crew or a post-production crew; (b) an agreement in respect of a studio located in Ontario or a location in Ontario; or (c) the agreement “demonstrates, in the opinion of the Minister of Tourism, Culture and Sport, that the corporation has made a significant commitment to production activities in Ontario”.
  4. The production company must apply to the OMDC for a certificate in respect of the production.
  5. Principal photography or key animation must commence before August 1, 2015.

Grandfathering of OCASE (Ontario Computer Animation and Special Effects Tax Credit)

The rate of 20% will apply to qualifying production expenditures  incurred after April 23, 2015 and before August 1, 2016 if the following criteria are satisfied:

  1. The production company must have entered into at least one qualifying written agreement in respect of a qualifying production expenditure.
  2. The qualifying written agreement must be entered into with a person at arm’s length with the production company.
  3. The qualifying written agreement must satisfy one of the following criteria: (a) it is in respect of digital animation or digital visual effects for use in the eligible production; or (b) the agreement “demonstrates, in the opinion of the Minister of Tourism, Culture and Sport, that the corporation has made a significant commitment to production activities related to the eligible production in Ontario”.
  4. Before August 1, 2015, the corporation has notified the Ontario Media Development Corporation in writing of its intent to apply for a certificate in respect of the eligible production. (NB: note the difference here between OPSTC and OCASE on this point – for OPSTC the application itself must actually have been filed by August 1, 2015, but for OCASE there only must be written notice of intent to apply for a certificate)
  5. Before August 1, 2016, the corporation has applied to the Ontario Media Development Corporation for a certificate in respect of the eligible production.
  6. Principal photography or key animation must commence before August 1, 2015.

“Transitional Grant” Program

The government also announced that productions which commence principal photography/key animation on or after August 1, 2015 (i.e., too late to access the grandfathered rates noted above) but before December 1, 2015 (i.e., the last day on which principal/key can be commenced is November 30, 2015), and which otherwise meet the criteria identified above, will have access to “a separate transitional mechanism outside of the Taxation Act” – details to follow.

[The foregoing information is taken from an OMDC bulletin circulated on Monday, May 25, 2015, and available online here.]

Ontario “Grandfathers” Tax Credit Rate Changes

I Didn’t Say That – The Ability of Actors to Control Their Performances Under Canadian Copyright Law

When the United States Ninth Circuit Court of Appeals issued its 2014 opinion in Garcia v Google (the original order and opinion is here; the amended order and opinion is here), its tentative conclusion that actors might enjoy copyright protection in their on-screen performances was met with vociferous criticism from movie producers and online content providers – the criticism was so fierce, and the arguments marshaled so convincing that on May 18, 2015 the US Ninth Circuit Court of Appeals en banc reversed the earlier decision (the May 18, 2015 opinion is available here). But Canadian copyright law has protected performer’s performances for nearly two decades, without much trouble or even attention – is there an explanation for the discrepancy in reactions?

Garcia v Google – Facts and Procedural Background

The May 18, 2015 decision  brings to an apparent close one of the stranger copyright cases in recent memory. The decision appears to definitively state that, under US copyright law, actors are not entitled to copyright in their on-screen performances – a conclusion which was vigorously argued over by a remarkably long list of intervenors in the case. The facts in Garcia are fairly straightforward: an actor responded to a casting call for movie titled “Desert Warrior” and appeared on-screen uttering two lines in the low-budget movie; unbeknownst to the actor, the producers of the movie dubbed her lines in the final version of the movie so that she appeared to be saying words she didn’t actually speak and re-titled the movie to “Innocence of Muslims“; worse, the movie, the trailer for which was uploaded to YouTube, proved to be incredibly controversial – in the words of the court, “the film fomented outrage across the Middle East, and media reports linked it to numerous violent protests”. The procedural history of the case is a bit more convoluted. The actor, seeking to have her participation in the trailer and film excised, sued Google and the producers of the movie and issued DMCA take-down notices, arguing, amongst other claims, that the defendants had infringed her copyright. Seeking an injunction forcing the removal of the footage from YouTube, she was unsuccessful in the district court, but a panel of the Ninth Circuit Court of Appeal reversed and granted the injunction. The court’s reasons seemed to indicate that Garcia had a protectable copyright interest in her performance as captured in the producer’s movie. That conclusion excited much debate and the case was re-heard by the Ninth Circuit Court of Appeal sitting en banc, which, as noted above, reversed the earlier Court of Appeal decision (Judge Alex Kozinski, who authored the original, controversial decision, stuck to his guns and dissented from the reasons of the en banc majority).

The initial 2014 Ninth Circuit Court of Appeals decision was controversial because it seemed so incongruous with established American copyright practice. American copyright law has historically not recognized any copyright interest on the part of an actor in their performance; indeed, when Garcia tried to register a copyright claim with the United States Copyright Office, the Office rejected the application, explaining that “longstanding practices do not allow a copyright claim by an individual actor or actress in his or her performance contained in a motion picture”. There seemed to be doctrinal and practical obstacles to recognizing performances as copyrightable, not least of which would be that, to again quote the Ninth Circuit’s en banc decision, “treating every acting performance as an independent work would … be a logistical and financial nightmare”.

In any event, for purposes of US copyright law, the “nightmare” now appears to be over (at least until the Supreme Court decides to take up the matter…). All that being said, Canadian copyright law does offer copyright protection to actor’s performances – so how have we avoided the “nightmare”?

Performer’s Performances in Canadian Copyright Law

As an initial observation, the Canadian Copyright Act required some significant amendments, introduced in 1997, in order to enable the protection of what the Act terms “performer’s performances”. Prior to those 1997 amendments, performances were not protected by Canadian copyright law, as they failed to constitute a “work” for purposes of copyright law; post-1997, they still aren’t a “work”, but rather are protected as other subject-matter.

Sections 15(1) and 15(1.1) of the Copyright Act state that (subject to various threshold matters, found in Sections 15(2), (2.1) and (2.2), such as where the performance occurred) “a performer has a copyright in the performer’s performance”. “Performer’s performance” is a defined term in the Act (found in Section 2), and it means:

(a) a performance of an artistic work, dramatic work or musical work, whether or not the work was previously fixed in any material form, and whether or not the work’s term of copyright protection under this Act has expired,

(b) a recitation or reading of a literary work, whether or not the work’s term of copyright protection under this Act has expired, or

(c) an improvisation of a dramatic work, musical work or literary work, whether or not the improvised work is based on a pre-existing work;

“Performance” itself as also defined in Section 2 and means “any acoustic or visual representation of a work, performer’s performance, sound recording or communication signal, including a representation made by means of any mechanical instrument, radio receiving set or television receiving set”.

Readers will note that the definitions are impressively broad: virtually any motion or sound created by the human body seems to qualify as a “performer’s performance”, including dance, mime, recitations of lines or extemporaneous utterances – clause (c) of the definition, which allows for the protection of “improvisations” seems particularly expansive. Further, it should be highlighted that there is no requirement that any performer’s performance be “original” – thus, even that low bar does not apply and thereby restrict the scope of protection for performer’s performances.

The exact nature of the rights accorded to performer’s in their performances are found in Sections 15(1) and (1.1): the copyright in the performance includes the rights to fix the performance and to reproduce the fixation of the performance.

At first glance, then, the situation under the Canadian Copyright Act seems like a particularly robust example of what the full Ninth Circuit was concerned about: if copyright protection extends that far, it seems designed to make for logistical nightmares in the administration of copyright. But the Canadian film and television production industry has not ground to a halt in the face of this tsunami of copyright claims – why not?

I think there are two partial answers. On a practical level, most of the problems are addressed by simple contractual arrangements – producers ensuring that everyone who appears on-screen signs some kind of waiver/release/transfer of rights. But if that doesn’t happen (which is more often the case in small budget projects – the Garcia reasons state “low-budget films rarely use licenses”), there remains a “fail-safe” mechanism in the Canadian Copyright Act: Section 17(1). What the Act gives with one hand (Section 15), it takes away with another: Section 17(1) states that when a performer “authorizes the embodiment of [his or her] performer’s performance in a cinematographic work, the performer may no longer exercise … the copyright [in that performance]”. In other words: if a performer authorizes the inclusion of their performance in an audio-visual project, the performer loses the right to control the exploitation of their performance in that project. And note what the language does not say: it does not say that the performer has to “authorize” the embodiment in writing. Thus, if there’s no need for the performer to memorialize their authorization in a written instrument, it becomes much easier to conclude that a performer authorized the embodiment of their performance simply by agreeing to be present in front of the camera (of course, that argument works only when the performer is aware that the camera is present and recording).

One final consideration which bears mention, and which is the more troubling: what about moral rights? The Copyright Modernization Act, enacted in 2012, added Sections 17.1 and 17.2 to the Copyright Act, which extended moral rights to some performances (for earlier Signal commentary on the topic, see Moral Rights Extended – But How Far?). It’s not immediately clear whether moral rights apply to an actor’s performance (or all actor’s performances) – the language of Section 17.1 states that it gives moral rights to “a performer of a live aural performance or a performance fixed in a sound recording”; that seems to indicate an intention to grant moral rights to what we might call “musicians”, and possibly “singers”… but actors? Most actors do generate an “aural performance” (by speaking lines) but is what they do a “live aural performance”? (What is a “live” performance anyways? What role is “live” playing in that phrase? What would a “non-live” performance look like? Is there a distinction for these purposes to be drawn between actors performing on the theatrical stage and actors performing for embodiment in a film?) The easier position is to conclude that the moral rights provisions in Sections 17.1 and 17.2 don’t extend to film/TV actors. But if that is incorrect, and actors do enjoy moral rights in their performances, then the position of producers becomes more complicated. Moral rights cannot be assigned, but they can be waived (Section 17.1(2)); there is no requirement that the waiver be in writing, but presumably for there to be a waiver there must be some turning of the mind to the matter – which, I think it’s safe to conclude, isn’t something that happens very often on set. One could try to rely on industry practice resulting in an implied waiver of moral rights, but even that seems a bit of a stretch. More fruitful might be the inherent limitations on moral rights: the right of association (i.e., the right to be identified as the performer of the performance) is limited to when it is “reasonable in the circumstances”; the right of integrity (i.e., the right to control the distortion, mutilation or modification of a performance and the right to control the use of the performance in association with a product, service, cause or institution) is limited to uses which “prejudice” the performer’s honour or reputation. Interestingly, Garcia might have had more luck with her claims under Canadian law, relying on moral rights infringement on the basis that, when the producers dubbed her lines and included her performance in a motion picture which was apparently different from what she originally understood herself to be participating in, her performance had been modified in a manner which prejudiced her honour or reputation.

I Didn’t Say That – The Ability of Actors to Control Their Performances Under Canadian Copyright Law