The Battle for Middle Earth

While Tolkien fans may be excused for thinking that the battle for Middle Earth was fought and won in the Lord of the Rings (LOTR) trilogy, they would have missed the most recent drama that unfolded around the prequel to LOTR which could have had impacted the real-world location of the Shire.

The Hobbit is the long delayed (cursed?) 2 part production which finally has a green light and a director.  The film is being co-produced by MGM and Warner Brothers' New Line. To the relief of many an Orc, Dwarf, Elf, Wizard and Hobbit aficionado, the director is none other than Sir Peter Jackson the New Zealander who brought us the LOTR.

This new drama began with a shot heard round the (union) world when the Media, Entertainment, Arts Alliance (MEAA) (of which the New Zealand Actors Equity is a part) issued a global blacklist of The Hobbit.   While there has not been much explanation on the reasoning behind the blacklist, later events would seem to indicate it was a misstep by an overly eager guild leadership.  Others with a more cynical disposition could view it as a magnificent miscalculation - akin to bringing a (pen) knife to a (machine) gunfight. 

Act 2 saw the tension mount with the guilds drawing the ire of (Saint - as he is viewed by some Kiwis) Jackson, and press releases from the studios stating the location for filming of The Hobbit had not been officially settled.   There were also rumors that Warner Bros. was considering moving the shooting to the newly vacant Harry Potter stages in the UK.  In a nation which has benefited tremendously from the LOTR, in employment and the ongoing tourism and filming booms), and is tied to the Tolkien kingdom of Middle Earth through LOTR, the possibility of the Shire moving to Hogwarts-land was the cause of much consternation - or as was noted in DHD-  "Ire in the Shire".  The results were marches in the streets and a really nifty Youtube video.

Act 3 concluded dramatically with in-person meetings between studio executives and the New Zealand government which resulted in the surprisingly quick the passage last week of emergency legislation that amended New Zealand's employment laws and gave the studios behind The Hobbit a few extra million in tax breaks.  Some observers declared the results just good business, while others viewed it as caving in to corporate bullying.

Regardless of where you end up on the outcome here, the numbers at stake are worth considering:

-US$225M: suggested investment by New Zealand in LOTR;

-US$57M: estimated amount of New Zealand incentives and tax breaks for The Hobbit;

-US$1.5B: estimated benefit to New Zealand from The Hobbit (presumably from employment and tourism);

However, perhaps the most telling numbers are the following -and specifically, the small difference between them:

-US$36B: market capitalization of Time Warner Inc. (the parent of Warner Bros.)

-US$129B: GDP of New Zealand.

In the end, these last numbers may provide an insight into why events unfolded the way they did.  After all, you don't become a multinational, multi-billion dollar entity without knowing a thing or two about negotiation.

 

 

 

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It's Alive! Heenan Blaikie's Condo Reporter Blog Is Up and Running

I'm pleased to announce that our friends and colleagues in Heenan Blaikie LLP's Condominium Legal Team have launched a blog - Condo Reporter.  From posts about hoarders to short-term leasing to how condo boards should handle police requests, Condo Reporter looks to provide condo corporations, developers, buyers, sellers and anyone else interested in condominium law with timely info.  Welcome to the blogosphere, guys!

The CRTC announces a revised set of conditions for "Category B" specialty and pay TV services

The CRTC has issued a revised Broadcasting Regulatory Policy (BRP) setting out standard conditions of licence and expectations for new “Category B” pay and specialty services. The term “Category B” service is the new terminology introduced by the CRTC in 2008.  All existing Category 2 services and any new services that the Commission may choose to license without access rights will be referred to as Category B services.  This terminology will be incorporated into the revised distribution regulations to be enacted on or before September 1, 2011.

Here are the highlights of the revised Category B standard licence conditions:

Maximum of five applications from any one applicant: The CRTC will only be prepared to consider five applications for new Category B services, in any language, from any one applicant at a given time, that is, at any stage in the process during which such applications are considered. 

Deadline for approved Category B services to commence operations: An approved Category B service will be required to launch within four years of the date of the decision in which the proposed service is approved. 

New streamlined procedures:  Any application deemed incomplete by Commission staff will be returned to the applicant. This practice would only apply to applications that are clearly deficient (for example, those for which the nature of service definitions contain insufficient detail or are incomprehensible). Staff will continue to ensure that applicants are provided with sufficient guidance so that they may determine, for example, what constitutes a “complete” application or a “sufficiently specific” nature of service definition. 

Filing of program supply agreements and/or licence or trademark agreements:  The Commission has amended its standard condition of licence to require that licensees submit copies of the programming supply agreement and/or licence or trademark agreement it has entered into with a non-Canadian party within 30 days of its execution, for the Commission’s review. The Commission may also request any additional document(s) that could affect control of the programming or management of the service. 

Continued consideration of Category B pay services: The CRTC will continue to license Category B pay television services with specific standard conditions of licence, expectations and encouragements for such services. Unlike Category B speciality services, Category B pay services will be expected to propose Canadian content exhibition and expenditure commitments comparable to those of existing pay services. The Commission will also expect such applicants to demonstrate why a licence for a pay service would be more appropriate than a licence for a specialty service.

Length of Broadcast Day:  Applicants for Category B services will continue to be given the option of choosing either an 18- or 24-hour broadcast day. 

Accessibility: In Broadcasting Regulatory Policy 2010-355, the CRTC established standard conditions of licence, expectations and an encouragement concerning accessibility of programming for Category 2 services, which include a condition of licence relating to the closed captioning of advertising, sponsorship messages and promos. These standard conditions will remain unchanged. However, In regard to audio description, the Commission recognized that it may be difficult to ensure that all news and information programming, in particular, programming acquired from non-Canadians, is audio described. Therefore, the requirement of Category B licensees to provide audio description for all the key elements of information programs, including news programming, has been limited to Canadian programs. 

The complete and updated standard conditions of licence, expectations and encouragements for Category B specialty and pay services are found in Appendix 1 and Appendix 2, respectively, to the BRP.

Globe and Mail v Canada - More Case-by-Case Privilege for Journalists and Confidential Sources

The Supreme Court of Canada's October 22, 2010 decision in Globe and Mail v. Canada (Attorney General) (2010 SCC 4) prompted a flurry of responses (Omar Ha-Redeye's post at slaw (Wigmore Criteria Upheld for Journalistic Sources) is one of the best sources for a concise summation of the decision).  Available online are the factums of both the Globe and the Attorney-General of Canada.  

The decision is perhaps best seen as a companion decision to the R. v. National Post (2010 SCC 16) decision released earlier this year (earlier Signal coverage of the R v National Post decision can be found here).  The Court described the relationship between the two cases in the Globe and Mail decision:

[25] While this appeal raises issues similar to those addressed in National Post, the context is nevertheless different. This case involves civil litigation, not the criminal investigative process. It involves testimonial compulsion, and not the production of documents or other physical evidence. The parties’ dispute is subject to the laws of Quebec and the Quebec Charter. These factors must be considered in determining how, and to what extent, the majority reasons in National Post are equally applicable to the issues raised by this appeal.

The Court concluded that, while the contexts might be different, the applicable law was nevertheless the same: Canadian law does not recognize a class-based journalist-source privilege, nor does the Charter guarantee of press freedom entail such a privilege; that being said, there is a common law (and, in Quebec, civil law) basis for recognizing a case-by-case privilege - a privilege which is available in both civil litigation matters and criminal prosecutions, in both Canadian common law and civil law jurisdictions.  

The criteria to be met in order to shelter under the protection of the privilege are the following, derived from the academic writings of John Henry Wigmore (see paras. 22 and 53 of the Globe and Mail decision):

  1. the relationship must originate in a confidence that the source’s identity will not be disclosed
  2. anonymity must be essential to the relationship in which the communication arises
  3. the relationship must be one that should be sedulously fostered in the public interest
  4. the public interest served by protecting the identity of the informant must outweigh the public interest in getting at the truth

In effect, then, Globe and Mail confirms and extends R v National Post - and,

as I noted about the earlier decision

, perhaps the most significant element of the two decisions is that they confirm that the concept of "journalist" is now so amorphous and so incapable of being restrictively defined that the courts are adopting a case-by-case approach to assessing whether privilege will be accorded in a particular instance.

Consumer Rights in Copyrighted Works

IP Osgoode has announced the winners of its 2010 IP Writing Challenge.  Pascale Chapdelaine's winning entry in the Graduate Students category, "The nature and justification of the consumer’s ownership rights in the copy of a copyrighted work", should be of particular interest to entertainment lawyers.  As can be gleaned from its title, the paper addresses the theoretical analysis underlying what kinds of rights consumers obtain when they purchase an entertainment product, such as a CD or digital file.  We've talked earlier here at the Signal about Canadian law and what is, in the US context, referred to as the "first sale doctrine" (First Sale Doctrine and Canadian Law) and Chapdelaine's article provides some insight into similar areas.

UPDATE (December 1, 2010): Pascale has posted further thoughts on the matter at IPilogue: What is Mine is Not Yours and What is Yours is in Fact Mine: Copyright, Consumers and First Sale.

Life and Times of S. Carter

John Jurgensen in the Wall Street Journal has written a fascinating piece on the business practices which have made Shawn Carter (occasionally referred to as Jay-Z) once of the richest music moguls in the world: The State of Jay-Z's Empire.

Jay-Z is notable not just for the breadth of his business activities (from book publishing to sports team ownership to executive roles at music labels), but for the savvy manner in which he structures the deals he enters into:

Jay-Z's music career began in 1996, when no major labels wanted to sign the 26-year-old local rapper. He and two partners formed an independent label, Roc-A-Fella Records, by necessity. That move eventually strengthened his bargaining position. Mr. Liles, who was an executive at the iconic rap label Def Jam, recalls Jay-Z declining an offer of a traditional signing deal. "He looked at me and said 'I own the company I rap for.' " Instead, Roc-A-Fella entered a joint venture with Def Jam.

... In 2005, Jay-Z took the job of president and CEO of Def Jam while rival labels courted him. What clinched the deal with the label—by then owned by Universal Music Group—was a contract clause giving the rapper full ownership of his past recordings for Def Jam. These rights revert to him starting in 2014.

... By the time he left Def Jam in 2007, he had begun quiet negotiations with Live Nation for his next move. ... With financing from Live Nation that included about $25 million up front and $5 million annually in overhead, the rapper started Roc Nation, an umbrella for his own output and an incubator for new talent. In exchange, Live Nation shares in all new business done by Roc Nation. That ranges from a percentage of potential "Decoded" earnings to publishing revenue from the songwriter Philip Lawrence, a Roc Nation signee who has had two No. 1 songs this year, including "Just the Way You Are" by Bruno Mars.

Diversification of revenue streams, in other words, is a project not just forbusiness ventures in the music industry, but for individual artists as well.

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CRTC approves Shaw-Canwest; announces a review of its "vertical integration" framework

Shaw Communications Inc.’s purchase of the Canwest Global Communications Corp. television properties was approved by the CRTC on October 22, 2010On the same day, the CRTC announced that it will hold a public process in 2011 to review its regulatory framework relating to “vertical integration”. The CRTC’s rationale for the policy review is what it refers to as “growing trend of industry consolidation and vertical integration taking place in the Canadian broadcasting industry”. The CRTC cited acquisitions that have taken place over the last decade, including the transfer of control of TVA to Quebecor Media Inc. in 2001, the transfer of the Citytv stations to Rogers Media Inc. in 2007 and the 2010 Shaw-Canwest acquisition. The CRTC also pointed to the announcement by BCE on September 10, 2010 that it would acquire sole control of CTVglobemedia Inc.

What’s interesting is that the transactions cited by the CRTC represent consolidation of programming and distribution undertakings (with the exception perhaps of Quebecor which also has a significant production arm). However for the purposes of its policy review, the CRTC has defined “vertical integration” to include the combination of programming undertakings and production companies. This is somewhat puzzling given that the broadcaster-producer integration is no longer as prevalent as it was in the last decade when entities such as Canwest-Fireworks and Alliance Atlantis were vertically integrated into production.  Both of these companies ultimately ceased their production activities to become pure play broadcasters.  

Is the Commission just being thorough here or are there winds of change blowing in the ownership structure of the independent production sector?  

Justin Bieber Fans and the Equitable Portrayal Code

According to this story in the Toronto Star:

Toronto radio station CFNY has been reprimanded by the Canadian Broadcast Standards Council after a host made comments about Justin Bieber fans that the council concluded “inappropriately sexualized children.”

The full text of the CBSC decision (captioned as "CFNY-FM re comments made on the Dean Blundell Show (Justin Bieber fans)") is available here.  The Canadian Association of Broadcasters' Equitable Portrayal Code is available here.

Contracting with Minors - A Comparative Approach

Recent news that the voice actor behind "Dora the Explorer" has filed suit against the producers of the show on the basis that the contract signed by the actor (who is a minor) is "unconscionable" offers a chance to review an area of entertainment law which is drastically different on either side of the Canada/US border.  Diane Krausz and Jennifer Bellusci offer some thoughts on how the lawsuit has been framed in legal terms and a brief overview of New York State law on contracting with minors in "Dora Explores a Minor Platform", while Rachel Valadez explores some of the non-legal (but still important for lawyers) strategic considerations behind the handling of the lawsuit in "Lessons From the Legal Saga of Dora the Explo(rer/iter/ited".  A comprehensive review of the law of contracting with minors for film and TV productions in New York, California, Ontario and British Columbia can be found in my article "A Minor Conundrum: Contracting with Minors in Canada for Film and Television Producers", originally published in 29 Hastings Comm. & Ent. L.J. 45 (2006-2007), and a copy of which is available here.

Publicity Rights State of Play

Eriq Gardner has published a simply excellent article in the ABA Journal"What's In a Name?" explores the history, caselaw and controversies surrounding US "right of publicity" law.

Publicity rights battles are growing exponentially, according to legal practitioners, who point to a host of reasons for the increase. For one, about 18 states have adopted laws giving individuals the right to sue over commercial exploitation of their persona. In addition, changes in technological culture make it both more tempting to use—and easier than ever to spot—an unauthorized use of a celebrity’s image.

Most especially, practitioners believe this area has grown hot because of a lack of acknowledged boundaries. A combination of generous laws, ambitious plaintiffs and no consistent bright-line defenses against claims means that attorneys are free to take rights conferred, find jurisdictions where the protections are most generous, and make a claim.

Some critics worry about how expanding publicity rights may chill free speech, but in the meantime, the issue of celebrity publicity rights is giving a lot of work to a new generation of IP lawyers like Faber.

“The sky’s the limit,” says Indiana University law professor Marshall Leaffer. “Over the years, we’ve seen publicity rights claims being made on someone’s voice, on a golfer’s swing, even on a sports car identified with a particular racer. A person’s likeness covers a lot. Rights of publicity claims are seemingly impeded only by a lawyer’s imagination.”

While the article is, as noted, concerned with US law, it offers Canadian lawyers a handy round-up of information for comparative purposes.

Abend v Spielberg - More on the Idea/Expression Dichotomy

The recent decision of the Southern District of New York Court in The Sheldon Abend Revocable Trust, v. Steven Spielberg et al., No. 08 Civ. 7810 United States District Court, S.D. New York, September 21, 2010 (full text of the decision is available here) offers another opportunity to see how courts handle assessing the "idea/expression dichotomy" in cases of alleged copyright infringement.  Mark Litwack offers his thoughts on a case which pitted the owners of copyright in the short story "Rear Window" against owners of copyright in the movie "Disturbia".  The case is particularly interesting as the court describes just how similar two works can be at high levels of abstraction and yet not be instances of infringement, and is useful for assessing the viability of infringement claims when dealing with plot elements and premises in entertainment-related projects.  As Litwack notes:

The court found that “It cannot be disputed that both works tell the story of a male protagonist, confined to his home, who spies on neighbors to stave off boredom and, in so doing, discovers that one of his neighbors is a murderer. The voyeur is himself discovered by the suspected murderer, is attacked by the murderer, and is ultimately vindicated. Although it is possible to characterize the plots of both works so they appear indistinguishable, such similarity is not, standing alone, indicative of substantial similarity. The law of copyright only protects an author's particular expression of an idea, not the idea itself.”

The court concluded that the expression of the voyeur-suspicion-peril-vindication plot idea is quite different in the two works. This broad plot idea, or premise, is not a protectible element. Similarity at this level of generality is not probative of the question of infringement.

Chilean Miners: Now That They're Out, What Rights Can They Sell?

Andrew Potter, writing in Maclean's last month, while ruminating on the plight of the Chilean miners trapped by a cave-in, pondered a question which nestles at the heart of legal theory: "if there is conflict, violence, and even death [while the miners are trapped in the mine], what legal regime should apply? Are the men even living under Chilean law anymore?"

Such considerations are a bit highfalutin - here at the Signal, we deal in more prosaic legal matters.  So now that the miners are, thankfully, free and healthy, let's consider the situation from the point of view of entertainment law: how can these miners make some money by having movies made or books written about their ordeal?  This post offers some of the considerations to be taken into account when thinking about what rights the miners may have, and what rights other may need to obtain in order to tell the story - I've tried to avoid making this analysis too "legal", focusing instead on broad-stroke considerations.  (According to the New York Times, at least one miner is ahead of the game, seeing as he is "writing a book".)

What avenue of exploitation offers the likeliest path to riches for the miners?  Ultimately, it will be those forms of exploitation which require the willing participation of the miners - participation for which they can bargain, thereby claiming some monetary compensation.  Here we're looking for forms of exploitation which only the miners can provide.  So, for example, potentially lucrative opportunities can likely be claimed by offering exclusive interviews to print newsmagazines or TV shows (a twelve-page spread in Hello!, f'rinstance, with charming posed shots of the miners and their reunited families, replete with the results of exclusive sit-down interrogatories; or a walk-about with Diane Sawyer, say, or Oprah).  Taking advantage of such opportunities will require the miners to be circumspect in their dealings with the media until such time as an exclusive deal is signed (and even more circumspect thereafter) - they want to avoid giving away too much for free, after all.  Such deals are usually structured as involving an up-front payment in exchange for access - which has the benefit of money being put into their hands, but doesn't give them a cut of the earnings which are made from exploitation of their images.  Advertising or endorsement deals are also a possibility - again, lucrative because they are predicated on the participation of the actual miners themselves, and not simply an actor portraying them.

Beyond that, things get somewhat more complicated.  Writing a book (whether alone or with a co-writer or ghost writer) could be lucrative for an individual miner or small team of miners - a nice up-front advance (possibly multiple advances from different publishers for different territories) coupled with some sales royalties (traditionally pegged at 8-12% of the retail sales price of the book, becoming payable following recoupment of the advance).  A book written by one or more of the miners (or with their significant involvement) would likely be more attractive in the  marketplace than a book written without them, but anyone could write a book about the ordeal - cobbling together bits and pieces from news reports and interviews - so the premium for these rights likely won't be as high compared to the exclusive interview rights mentioned above.

Many might think that the truly big paydays are to be had by exploiting film and TV projects - and there could indeed be significant money to be made by such projects, but probably not for the miners themselves.  Film and TV producers will need to consider the issue alluded to above: do I need to contract with these miners in order to tell their story?  (I highly recommend Mark Litwak's discussion on this point: Purchasing Life Story Rights.)  Potential concerns here are whether portraying the miners (or some fictionalized version of them) would impinge on a "right of publicity" or "right of privacy" that the miners may have.  But because this is a highly public story, with significant public interest, freedom of expression interests counteract the extent to which the miners could assert such rights to prevent a producer from making a movie based on the story.  Producers don't necessarily need to obtain permission from anyone in order to make a fictionalized depiction (as distinct from a documentary) about this saga (compare the (in)famous near simultaneous broadcast of three separate MOWs about Amy Fisher: one network obtained rights from Fisher, one from her victim, and one network didn't bother contracting with any of the involved parties).  Changing a few names and locations could go a long way towards making the project lawsuit-proof. 

That being said, there can be value in obtaining co-operation from the miners - getting access to little details about their entombment ordeal which could make a movie more accurate than competing movies, for example.  There's arguably some upside to having the "authorized" version of the story (compare unauthorized biographies to authorized biographies, for example) - bu then again, the Amy Fisher movie which was made entirely without the participation of any of the concerned players also received the highest ratings.

"Co-operation" has another aspect as well: obtaining a release from the miners of any claims they might assert against the producers for invasion of privacy, infringing on the right of publicity, etc., regardless of whether such claims would stand a decent chance of winning in court.  In a case such as this such a waiver of rights may have considerable value - the miners are likely to obtain some kind of aggressive representation at some point, who will frown on others making money from the story irrespective of the niceties of rights acquisition requirements (or lack thereof).  At this point, however, there comes into play the matter which cuts against the miners: there's thirty-three of them.  The portion of a film/TV project's budget which is allocated to rights acquisition is usually fairly modest - a million dollars would be outrageously high.  But even if there were a million dollars available, that would need to be divided thirty-three times.  While that share might go farther in an impoverished Chilean mining village, it's not exactly palaces-and-Ferraris-for-life kind of money.

If a producer does decide to obtain a release or enter into a rights acquisition deal with some or all of the miners, payments will likely be structured as a modest up-front payment, with perhaps a further payment for services rendered as a "consultant" to the movie (assisting the screenwriter with details, for example), and possible further payments based on bonuses if certain box office milestones are achieved, or a share in the gross or net proceeds of the project (hint: there will never be any "net" proceeds).  However, the latter two forms of payment (ie box office bonuses and revenue participation) will need to be aggressively negotiated for, as producers are usually reluctant to provide them. 

One aspect of this which will require careful management is going to be interpersonal relationships among the thirty-three themselves.  Although at the moment the news is filled with heart-warming stories of gifts being showered on the miners, if they are interested in making money from their ordeal they will be entering a mercenary environment, where business decisions are made using a metric of obtaining the widest scope of rights for the least amount of money.  It is almost inevitable that they will disagree about whether and how to involve themselves in opportunities for exploitation of their rights.  Jealousy might erupt as one or more miners become media "favourites", leading others to grumble in the background.  What appear at first to be enormous amounts of money will quickly dwindle once received and spent.  Indeed, don't be surprised if a few years from now you start reading "where are they now?"-style stories featuring heart-breaking tales of frustration that hoped-for riches didn't materialize.

Irish High Court on Responses to Unauthorized Downloading

The decision of the High Court of Ireland (which is a trial level court and not an appellate court) in EMI Records (Ireland) et al v UPC Communications (full text of the decision available here) is a fascinating (if long) read.  The plaintiffs sought an injunction against an internet service provider to "prevent the theft of their copyright by third parties illegally downloading it over the internet".  Peculiarly, according to the decision, "the form of injunction is left to the discretion of the court".  Analyses of the decision which are well-worth reading are offered by Barry Sookman and James Gannon.  In any event, in light of his finding that "the business of the record companies is being devastated by internet piracy", it is clear from the tenor of the decision that Mr. Justice Charleton of the High Court really, really wanted to grant an injunction - but found that the High Court lacked the jurisdiction to do so.  The High Court's conclusion:

Solutions are available to the problem of internet copyright piracy. It is not surprising that the legislative response laid down in our country in the Copyright and Related Rights Act 2000, at a time when this problem was not perceived to be as threatening to the creative and retail economy as it has become in 2010, has made no proper provision for the blocking, diverting or interrupting of internet communications intent on breaching copyright. In failing to provide legislative provisions for blocking, diverting and interrupting internet copyright theft, Ireland is not yet fully in compliance with its obligations under European law. Instead, the only relevant power that the courts are given is to require an internet hosting service to remove copyright material. Respecting, as it does, the doctrine of separation of powers and the rule of law, the Court cannot move to grant injunctive relief to the recording companies against internet piracy, even though that relief is merited on the facts.

Bill C-32: Commentary Round-up

A plethora of selected Bill C-32 (The Copyright Modernization Act)-related commentary from the past few weeks for perusal:

CBC, Creative Commons and Caution

While late to the party, I thought I'd take a moment to provide a legal perspective on last week's blogosphere brouhaha regarding the Canadian Broadcasting Corporation's evident policy of not allowing Creative Commons-licensed music to be used on (at least) its radio broadcasts and podcasts.  For background, see the comments to this post at the CBC's website, particularly the comment made by Chris Boyce, who is Programming Director at the CBC; this post by Michael Geist; this post at the Creative Commons blog (which itself contains numerous links to other sites covering the story); and this post by Chris Castle.  I should also note, for what it's worth, that I am an admirer of the Creative Commons effort to create a licensing scheme which facilitates the dissemination of creative works.

If I had to use two phrases to summarize my concerns to a client who asked whether they could or should be using CC-licensed materials on their radio broadcasts or podcasts, it would be these: ease of use; and lack of legal recourse.

To see how we get to those concerns, let's start by looking at how the CBC is currently situated.  They have, according to comments left at the CBC website, a bulk licensing arrangement in place with a music provider (APM Music).  That arrangement likely provides something along these lines: the CBC pays a license fee, gets access to a huge library of music, and can essentially make whatever use they'd like of the music contained in that library when creating their broadcasts.  All they do is give their employees/contractors access to the library and they can have at 'em - find a song you like and stick it into the program, no worries, because it's all covered by the license which a lawyer farther up the chain has vetted and confirmed is acceptable.  How does that compare to the situation where someone wants to make use of CC-licensed music?  Let's back into the answer to that question by looking at Chris Boyce's comment [emphasis added]:

The issue with our use of Creative Commons music is that a lot of our content is readily available on a multitude of platforms, some of which are deemed to be “commercial” in nature (e.g. streaming with pre-roll ads, or pay for download on iTunes) and currently the vast majority of the music available under a Creative Commons license prohibits commercial use.

In order to ensure that we continue to be in line with current Canadian copyright laws, and given the lack of a wide range of music that has a Creative Commons license allowing for commercial use, we made a decision to use music from our production library in our podcasts as this music has the proper usage rights attached.

As others have pointed out, there is some CC-licensed music which is available for commercial use (though as Boyce notes, the vast majority is not).  Let's look at the explanation offered by the CC wiki:

The majority of music released under a CC license uses one of the licenses that prohbit commercial use (BY-NC, BY-NC-ND, BY-NC-SA). Below are some pointers to finding music that allows commercial use.

If your use also involves adapting the music (including syncing to video), you'll further have to exclude music under Attribution-NoDerivatives (BY-ND; which does allow commercial verbatim use), and either release your work under Attribution-ShareAlike (BY-SA) or also exclude music under that license. This leaves music under plain Attribution (BY) or in the public domain.

Already we're starting to get into some potential wrinkles.  We have to exclude all music licensed under an NC license, but what about ND licenses?  The wiki explanation says if you want to "adapt" the music, you have to exclude BY-ND licensed music.  What does "adapt" mean?  Let's look at a Canadian CC BY-ND license: there's no mention of the word "adapt", but it does say that a licensee cannot "alter, transform, or build upon this work".  That starts to worry me.  What does "alter" mean?  Does that mean I can't edit the work (for example, just playing the chorus, or editing the track so that the chorus comes before the verses, or speeding it up, or slowing it down)?  What exactly are my radio programmers planning on doing with this track?  Are they going to play the entire track as a track so listeners can listen along, or are they planning on using the track is some more innovative way, such as incorporating it into an on-air skit?  It's hard for me to predict what someone is going to do with the song, and hence whether the BY-ND license will permit that use - presumably the bulk licensing arrangement already addresses this kind of situation, so that would be one less headache to deal with. 

If I drill down further into the full text of BY-ND license, I'm really not any farther ahead - there's still no definition of "adapt", or "alter", and while there's a definition "Derivative Work", the license doesn't actually state that what I'm allowed to do or not do in connection with a "Derivative Work", though it does say that a "Derivative Work" is "a work that produces or reproduces the Work or any substantial part thereof in any material form".  Going back to the face-plate of the BY-ND license, it states "No Derivative Works" - which seems to mean that I can't incorporate the licensed Work into any other work, which would preclude me from using the Work in a radio show, which is itself a "work".  The full text of the license does include a definition of a "Collective Work", and states that a Collective Work is not a "Derivative Work" - but is a radio broadcast a "Collective Work"?  Hard to say - arguably it is, but all of the examples used to illustrate the definition of "Collective Work" are print-based.  Again, my bulk license would expressly contemplate using licensed tracks in radio broadcasts, so my concerns there would be minimal.

Maybe I'll just avoid the potential confusion and, as the CC wiki recommends, limit myself to songs which are licensed under a BY (Attribution) license.  (The BY-SA (Share Alike) license is a non-starter since it would mean that the resulting work (ie the radio broadcast) would itself need to be licensed on a CC BY-SA basis, and I'm assuming that the client isn't willing to contemplate - maybe they are, but that's going to get into policy considerations which are beyond the scope of this exercise.) 

So, the edict goes forth: employees, you can use music licensed under a CC BY licenses.  Have at 'em!

 The CC wiki, in addition to pointing to a variety of other sites which contain CC licensed music which allows for commercial use, contains this information:

As of October 2010 Jamendo hosts 7414 albums under BY-SA, 1607 albums under BY, and 987 albums under BY-ND.

Clicking on the middle link takes us here, and since we're patriotic Canadians we're going to filter for Canadian music, which takes us here.  Clicking on the first album in the search results reveals a critical flaw - the album is actually licensed under a BY-SA license, not just a BY license (it's also licensed under a US version of the CC license, not a Canadian version, but let's set that aside for the moment).  So, as a lawyer, I'm already getting worried for my client - it seems that every time one of their employees tries to find a simple BY licensed song, they're going to have to investigate whether the search engine their using is actually pulling up only BY licenses, or BY+ licenses.  The second album is also BY-SA, but when I get to the third album, I discover that it is a simple BY license.  Taking a spin through the full text of the Attribution 3.0 license, it's looking good (setting aside for the moment that it is a US form of the license, not a Canadian one) - no concerns about restrictions on use, no real issues at all, frankly, until we get to this:

UNLESS OTHERWISE MUTUALLY AGREED TO BY THE PARTIES IN WRITING, LICENSOR OFFERS THE WORK AS-IS AND MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE WORK, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF TITLE, MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR THE ABSENCE OF LATENT OR OTHER DEFECTS, ACCURACY, OR THE PRESENCE OF ABSENCE OF ERRORS, WHETHER OR NOT DISCOVERABLE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OF IMPLIED WARRANTIES, SO SUCH EXCLUSION MAY NOT APPLY TO YOU.

Here's my legal take on that: um, no.

Even better/worse, at the bottom of the license is this:

Creative Commons is not a party to this License, and makes no warranty whatsoever in connection with the Work. Creative Commons will not be liable to You or any party on any legal theory for any damages whatsoever, including without limitation any general, special, incidental or consequential damages arising in connection to this license.

Here's my legal take on the combination of those two quotes: no, no, no, no, no.

My client, the licensee, could take no comfort from these licenses whatsoever.  What assurances do I have that the person who is putting up this music and tagging it with a CC license has any rights whatsoever to do so?  I have no idea whether this person owns the music they claim to own.  Creative Commons (understandably) is also refusing to make any representations about the rights in the song.  So if it turns out that the person who is purporting to make this song available under a CC license does not, in fact, have the right to do that, then the licensee is left with no obvious legal recourse - can't sue the person who put up the song (since the license disclaims representations and liability) and can't sue CC itself (since the license disclaims representations and liability).  If I use a bulk licensing service and something goes wrong, I can sue them (i.e., an entity with actual assets) for breach of the representations and warranties in their license with me - and the onus is on them to ensure that they have properly licensed the rights they are claiming to grant to me.  A CC license, on the other hand, expressly states that it contains no representations and warranties, and that the licensors are not liable for damages.

So we get back to my concerns expressed above.  In comparison to a bulk licensing service, the CC approach contains a number of drawbacks: a comparatively limited selection of music; high transaction costs in that each potential track will not only need to be paid for, but someone will need to actively review each license for compliance with the strict BY requirement (as distinct from the bulk licensing scheme where only one license per provider is reviewed); a lack of certainty regarding ownership of the rights which are purportedly being licensed; and a lack of meaningful legal recourse if it turns out that the "licensor" did not own the necessary rights.

As I alluded to above, I think the Creative Commons licensing scheme is an innovative and productive undertaking, one which places an enormous amount of power in the hands of licensors and licensees who use the licenses in an informed manner.  But the concerns outlined above illustrate that an enormous amount of caution is warranted in making the decision to use such licenses, particularly for large commercial or public broadcasters.  (As an aside, I note that Chris Boyce's original comment indicated that while the CBC would not be using CC-licensed music, it would continue to use other CC-licensed works such as photographs - I don't think that the analysis outlined in this post differs all that much when it comes to the use of works other than music.)

UPDATE: I neglected to make mention of Tony Duarte's incisive post at IPilogue which examines CC-type licenses for film and TV productions, and which raises some concerns of broader application when reviewing such licenses - The Hazards of Mass Licensed Internet Digital Content For Film and Television Reuse.

Bill C-32: Commentary Round-up

The past week has seen a number of different entries in the ongoing debates regarding Bill C-32 (The Copyright Modernization Act):

Also of particular interest is the availability of the Library of Parliament's Legislative Summary of Bill C-32

On an anticipatory note, Irwin Law will in October be publishing From "Radical Extremism" to" Balanced Copyright": Canadian Copyright and the Digital Agenda.

Bill C-32 and digtal locks: more grist for the mill

 Michael Geist has an opinion piece on Bill C-32 in the September 27, 2010 issue of The Hill Times.   While Professor Geist likes the new consumer exceptions in the Bill that permit time shifting, format shifting, back up copies and UGC, he continues to be troubled by the Bill’s digital lock provisions (known as the anti circumvention rules in Bill C-32).  Geist strikes a somewhat alarmist tone on digital locks, arguing that these provisions: “effectively trump all other copyright (particularly fair dealing and the new consumer exceptions)”; are a “huge flaw that undermines many of the positive steps forward”; and that a “compromise” needs to be found.

However, a closer look at the new fair dealing exceptions and the digital lock provisions underscores why rights holders are so intent on seeking amendments to the Bill going in the other direction. Several commentators (Sookman, Gannon) have pointed out that on closer examination the prohibition against circumventing digital locks does not extend to circumventing copy-control protection measures. Therefore, in no way do the digital lock provisions “trump” any existing fair dealing exceptions or the new parody and satire fair dealing exceptions found in Section 21 of Bill C-32. Once you have legal access to a work, there is no provision in the new Bill that would prevent anyone from making use of the fair dealing copyright exceptions, digital lock or not. So one might reasonably take issue with Geist’s assertion that creators will not face significant financial losses under the Bill’s list of new fair dealing categories and consumer exceptions, suggesting that the need to fine tune these loopholes is clearly a matter of perspective. Rights holders continue to be adamant that the current exceptions in the Bill are too broad and potentially undermine other protections in the Bill against digital piracy. 

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