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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

Broadcasting and Telecommunications Legislative Review Panel: “Time To Act”

The Broadcasting and Telecommunications Legislative Review Panel (BTLR) was tasked in 2018 by the Minister of Innovation, Science and Economic Development and the Minister of Canadian Heritage to review Canada’s outdated communications legislative framework. That framework includes the 1991 Broadcasting Act.

The BTLR’s long awaited report was released today.

As anticipated and intended, the Panel has gone well beyond a mere “legislative review”. It has considered decades-old policies, structures, institutions and practices, and made recommendations to change or replace many of these in fundamental ways.

The report speaks to a broad range of industry stakeholders. Chief among these are online media content providers, notably foreign services.

Among its calls for “Immediate Action” — even prior to developing and enacting new legislation — the Panel calls on government to:

Require media content curators now exempt to contribute to Canadian content: to achieve this, the federal government should require the CRTC to hold hearings and issue a new exemption order so that those media content curators that derive revenue from Canada and are now exempt from licensing, such as Netflix, are required to contribute to Canadian content through spending and discoverability requirements, consistent with our recommended legislative framework.

End the competitive disadvantage facing Canadian companies: apply GST/HST equitably to media communications services provided by foreign online providers.

More broadly, the Panel proposes to require all media content undertakings with “significant Canadian revenues”, and delivering media content via the Internet, to register with the Canadian Radio-television and Telecommunications Commission.

“This new model would bring all those providing media content services to Canadians – whether online or through conventional means, whether foreign or domestic, whether or not they have a place of business in Canada – within the scope of the Broadcasting Act [proposed to become the Media Communications Act] and under the jurisdiction of the CRTC.”

BTLR Panel Report, January 29, 2020

The Panel recommends that “for greater certainty”, the Act be amended so that it clearly applies to foreign Internet streaming services with revenues in Canada.

The CRTC would set obligations in various areas — content curation (streaming services); content aggregation (distribution services); and sharing (user / interactive services) — with a view to supporting Canadian content. For example, streaming companies would have spending requirements on Canadian content. The specifics –who contributes, for which activities, and how much — would be up to the CRTC. The Panel recommends ensuring that the CRTC is equipped to “regulate economic relationships between media content undertakings and content producers, including terms of trade”, and help Canadian producers to retain commercial rights over their content.

The CRTC would retain its power to exempt providers or classes of providers from regulation. If the Panel’s broad recommendations are adopted, much could ride on that discretionary power. In 1999, the CRTC relied on its discretion to exempt “new media” broadcasting from almost all regulation. That exemption has remained in place for more than 20 years. Today’s Panel report proposes a dramatic shift, from exempting and excluding online media content services from the regulatory framework, to bringing them under direct CRTC regulation.

This post addresses top-line issues of interest for online media content providers. For those picking up the report in the coming days, recommendations 51 through 85, and Chapter 3, address the “Creation, Production and Discoverability of Canadian Content”. We will provide additional highlights in upcoming posts.

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Broadcasting and Telecommunications Legislative Review Panel: “Time To Act”