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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

E-1 Visas for Canadian production companies

Canadian production companies that sell films and/or television productions to US-based companies can face challenges when sending key personnel to the United States. The issue frequently arises when some or all of the Canadian production is scheduled to take place on location in the US.

Many Canadian production companies focus on more traditional US work permit categories, which were created with the film and television industry in mind (for example, the O-1B for aliens of extraordinary achievement in the motion picture or television industry, and the O-2 for related essential support personnel).  However, these categories carry onerous eligibility requirements and can be difficult to navigate.

The E-1 (treaty trader) category can be a viable alternative to the O-1B and O-2 categories. Unfortunately, Canadian production companies tend to overlook the E-1 category, because it was initially intended for entrepreneurs rather than the film and television industry. 

To learn more about the E-1 qualifications and eligibility requirements, please read the full insight on dentons.com. For more information about this or other immigration-related topics, please contact Henry J. Chang.

E-1 Visas for Canadian production companies

Broadcasters obtain injunction in bid to stem “emerging trend” of pre-loaded set-top boxes

The Federal Court of Canada recently granted three large broadcasters an order for an injunction* against retailers of pre-loaded “plug-and-play” set-top boxes.  The apps pre-loaded on the boxes allow consumers to access TV programs and movies without cable or other subscriptions.  As Madam Justice Tremblay-Lamer observed:

These boxes have several uses for consumers, some of which are perfectly legal and some which skirt around the fringes of copyright law.  This is not the first time a new technology has been alleged to violate copyright law, nor will it be the last.

In her view, the allegations in this particular instance were strong enough to support a prima facie case of copyright infringement and the injunction order.  The matter will proceed to trial at a later date to resolve the various copyright and related issues.

A focus on the copyright issues

Bell, Rogers and TVA/Videotron each have exclusive rights under the Copyright Act to – in lay terms – broadcast, deliver and copy a range of TV programs and movies in Canada.  The television business model relies on broadcasters’ ability to exploit these rights.  The Plaintiffs argued that

pre-loaded set-top boxes represent an existential threat to [their] line of business as piracy is one of the top causes for declining subscriptions for television services in Canada and leads to annual decreases in revenue.

A central question before the Court was whether the set-top box retailers were simply the “conduit” for consumers’ infringing activities, or were instead themselves infringing copyright.  The Copyright Act does provide a limited shield for “conduit” services that provide only the means to deliver copyright-protected programs, images or music:

(1) For the purposes of communication to the public by telecommunication, […] (b) a person whose only act in respect of the communication of a work or other subject-matter to the public consists of providing the means of telecommunication necessary for another person to so communicate the work or other subject-matter does not communicate that work or other subject-matter to the public.

The Court found that this statutory defence was not available to the Defendants.  They had, said the Court, deliberately encouraged consumers to use the set-top boxes to circumvent the broadcasters’ subscription-based services.  They had promoted their set-top boxes to consumers as a means to cancel their cable subscriptions (using slogans such as “Original Cable Killer”), and had also offered tutorials on how to use the pre-loaded apps to obtain “free” programming.   The Court said that these activities “went above and beyond” selling a simple piece of hardware, and instead related to the content of the copyright-protected programming.  This constituted prima facie infringement.

The Court also agreed with the broadcasters that inducing and authorizing consumers to infringe copyright was an additional serious issue to be tried.

The Court’s order not only enjoins the five named retailers from continuing to configure, market and sell the pre-loaded set-top boxes; it allows the broadcasters to serve the order on other retailers who are engaged in the same activities.

 *Thanks to Smart & Biggar for making the link to the decision available online.

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Broadcasters obtain injunction in bid to stem “emerging trend” of pre-loaded set-top boxes