Part I -
Copyright’s Dual Origins In Canada
And Unfair Contracting Practices

Rights under the Copyright Act

Upon making an “original” work, Canadian authors automatically acquire a bundle of economic rights under the Copyright Act. Included in this bundle, for example, is the author’s sole right to do, or to authorize, any of the following with respect to the work or any substantial part of it:

• produce, reproduce, perform or publish the work and any translation;
• convert a dramatic work into a novel or other non-dramatic work;
• convert a novel, a non-dramatic work or an artistic work into a dramatic work by performance in public or otherwise;
• make a sound recording of a literary, dramatic or musical work;
• reproduce, adapt and publicly present a work as a cinematographic work (more commonly termed an “audiovisual work”);
• communicate the work to the public by telecommunication;
• present an artistic work at a public exhibition; and
• rent a sound recording of a musical work.

These authors’ rights are subject to some specific exceptions and fair dealing for specified purposes.

Canadian performers have a much more restricted copyright that, generally, gives a performer the sole right to authorize the communication to the public by telecommunication and the recording (in any form) of his or her live performance (or any substantial part of it) and the reproduction of any recorded performances made without his or her authorization or made for a purpose other than that for which authorization was previously given. A performer also has the sole right to rent out or authorize rental of a sound recording of the performance. A performer’s copyright is subject to conditions that largely limit this protection to acoustic or audio performances and does not extend at all to protection of audiovisual performances once fixed in an audiovisual work. Performers’ rights, like authors’ rights, are subject to exceptions and fair dealing.

The Copyright Act also confirms that creators who are authors possess moral rights in their works. These rights, for example, protect the creator to some extent from distortion, mutilation or other modification of a work that is prejudicial to his or her honour or reputation. Authors are able to license or assign their bundle of economic rights in whole or in part. However, their moral rights can never be transferred, although they can be waived. Producers frequently do require authors to waive their moral rights, and it is debatable how strong those moral rights are, as the Copyright Act does not require moral rights waivers to be in writing. Moreover, authors must prove damage to reputation except with respect to changes to certain originals of artistic works (paintings, sculptures and engravings). Performers currently have no moral rights.²⁷

Both economic and moral rights exist in Canada for the same length of time, which is generally the lifetime of the author plus 50 years from the end of the year in which the author died.²⁸ Performers’ economic rights in Canada last for 50 years from the end of the year of its first fixation in a sound recording or performance (if not fixed in a sound recording), generally the same as in European Union countries. In some countries of Europe, moral rights for both authors and performers may be unlimited in duration. The civil remedies available in Canada for infringement of economic rights are also available for moral rights.

The ability of authors and some performers to do or authorize certain things in the “marketplace” because they own copyright does not guarantee a reasonable livelihood for Canadian creators, as the 2001 Census figures indicate. To begin to understand why, it is instructive to look at the underlying relationship between the market regime under which Canadian creators are able to “exploit” their rights and the way the rights they possess are conceived and justified in the first instance.

Producers and others arguing for greater copyright protection often place Canadian creators front and centre and sentimentalize them as poor or starving portrayers of Canadian culture to both Canadians and the rest of the world, yet the fact that many are economically ghettoized, at least in part as a result of the way in which their rights are typically acquired by producers, is ignored. If copyright is truly about ensuring that creators are justly compensated and recognized for the works and performances they create and make available to the public, what can be done to the statutory regime to ensure that this aim is not undermined by the market regime within which the rights are exploited? And as U.K. law professor William Cornish asks with respect to copyright laws that derive their legal and moral force from an individual’s creative act, “[i]f we are not prepared to provide legal buttresses for the interest of the author, why are they there at all?”²⁹

Copyright’s Dual Roots

Copyrights are typically justified with reference to one of two foundational rationales: the Anglo-American copyright tradition or the continental civiliste or droit d’auteur tradition.³⁰ As popularly referenced, Anglo-American copyright stems from positive law based on utilitarian, public interest principles, while droit d’auteur is conceptually rooted in natural law and, as its name suggests, is centred on the author. Where, under the former, copyright is granted to authors in order to stimulate and maximize the production of, and public access to, “original” works, droit d’auteur as a matter of natural justice recognizes personal rights that spring from the author’s act of creation.

Copyright viewed from an Anglo-American perspective is solely economic in nature and its function of rewarding the creator has at times been characterized as “secondary”³¹ to its primary objective of creating a supply of works for public consumption. Oxford law professor David Vaver, formerly at Ontario’s Osgoode Hall, observes that “[c]opyright is there to help propel works into the market. It is overtly an instrument of commerce rather than of culture, a tool of the media entrepreneur rather than of the author.”³²

Conversely, droit d’auteur is primarily about the author and reflects the fact that people, rather than corporations, create works. Inspired by John Locke’s writings and fostered by the anti-corporatist sentiment of the French Revolution of 1789, droit d’auteur is premised on the principle that the fruits of intellectual labours are the property of their creators.³³

Generally, creators’ rights are more meaningful in jurisdictions that are rooted in droit d’auteur. French law professor Philippe Gaudrat argues:

…droit d’auteur confers on the creator, irrespective of his ‘market value’, a specific status, which is linked to his special social function. It gives him social prestige and financial responsibility. If we wanted to summarize the difference, we could say that droit d’auteur makes each creator an entrepreneur of the mind, a minor employer, while copyright makes each creator a labourer.³⁴

Gaudrat adds that the creator in a copyright jurisdiction has “to hope to become a star vital to the commercial success of an operation, so that he can negotiate on an equal footing with the financial investor. So it is the commercial appeal, his ‘rarity’ on the market according to the principle of supply and demand that gives him his new prestige; not his social function as a creator.” Despite the fact that Canadian copyright law is conceptually influenced by and contains principles associated with each tradition,³⁵ Canadian creators currently do need to become stars in order to improve their economic status.

An observer of the bifurcated roots of Canadian copyright law might not expect this reality. Quebec lawyer Pierre-Emmanuel Moyse observes the following about the dual nature of copyright in Canada:

Support for Moyse’s statement on Canada’s acceptance of droit d’auteur can be found very early on in Canadian jurisprudence. In Morang and Co. v. LeSueur (1911), 45 S.C.R. 95, FitzpatrickC.J. addressing the interpretation of a contract between a publisher and the author of an unpublished work on William Lyon Mackenzie stated:

I cannot agree that the sale of the manuscript of a book is subject to the same rules as the sale of any other article of commerce, e.g., paper, grain or lumber. The vendor of such things loses all dominion over them when once the contract is executed and the purchaser may deal with the thing which he has purchased as he chooses. It is his to keep, to alienate or to destroy. But ... [a]fter the author has parted with his pecuniary interest in the manuscript, he retains a species of personal or moral right in the product of his brain.³⁷

Acceptance of droit d’auteur is also found in the first major Canadian study of copyright in the post-World War II period. The 1957 Report on Copyright,³⁸ produced by a Royal Commission chaired by James Lorimer Ilsley, stated:

Copyright is in effect a right to prevent the appropriation of the expressed results of the labours of an author by other persons. That an author should have this right, at least for a limited period, is generally recognized – on the ground of justice, expediency or both.³⁹

In effect, the Commission’s view on copyright reflected both a utilitarian and author’s rights perspective, although the Commission found it “unnecessary to go on record with a confession of faith in either doctrine to the exclusion of the other.”⁴⁰

Canada’s accession in 1928 to the Berne Convention for the Protection of Literary and Artistic Works provides yet another example of Canada’s implicit acceptance of the author’s primacy in the copyright field. Entered into in 1886 by a handful of countries including Great Britain on behalf of her North American colonies Canada and Newfoundland, and last amended in 1971, the Berne Convention⁴¹ is an instrument by which member nations agree to provide their authors with certain minimum protections and foreign authors with “national treatment” - protections no less favourable than those extended to their own national authors.

The preamble to the Berne Convention reveals an unequivocal purpose: “to protect, in as effective and uniform a manner as possible, the rights of authors in their literary and artistic works.”⁴² Moreover, Article 2(6) provides that protection under the Berne Convention is to operate for the benefit of the author and his successors in title.⁴³ This comes as no surprise, given that the Convention was based on the 1883 draft text of an international copyright agreement produced by the Association Littéraire et Artistique Internationale (ALAI), which had been formed earlier in Paris in 1878 by influential authors like Victor Hugo.⁴⁴ On this droit d’auteur prominence within the Berne Convention, Vaver states:

Its title is not now, nor has it ever been, the Berne Copyright Convention. The word 'copyright' makes the occasional cameo appearance in the English version of the text but, more significantly, the opening language of the treaty creates a Union for 'the protection of the rights of authors in their literary and artistic works'. The formula is repeated throughout the Convention. The French language version of the Convention, which prevails in any dispute on interpretation, naturally uses 'droit d'auteur'. The structure of the Convention reflects this French usage.⁴⁵

In addition to its accession to the droit d’auteur-based Berne Convention, Canada also acceded to the United Nations Covenant on Economic, Social and Cultural Rights in 1976 (UNCESCR).⁴⁶ Similar to Article 27(2) of the 1948 Universal Declaration of Human Rights (UDHR),⁴⁷ the UNCESCR recognizes the natural rights creators have in their works. Specifically, Article 15 of the UNCESCR guarantees everyone “the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.”⁴⁸ With reference to these Articles in the UNCESCR and the UDHR, U.K. law professor Lionel Bently argues as follows:

According to these definitions, copyright protection is granted not because we think the public will benefit from copyright but simply because we think it is ‘right’ or proper to recognize this property. More specifically, we believe it is right to recognize a property in intellectual productions, because such productions emanate from the mind of an individual author. For example, a poem is seen as the product of a poet’s mind, their intellectual effort and inspiration, and an expression of their personality…Copyright is the positive law’s realization of this self-evident, ethical precept.⁴⁹

The Agreement on Trade-Related Aspects of Intellectual Property Rights, an agreement annexed to the World Trade Organization Agreement and known as TRIPs, which has bound Canada since January 1, 1996, can be viewed as a recent counterbalance to these longstanding international statements celebrating authorship. The TRIPs agreement requires members to comply with some requirements found in the Rome Convention⁵⁰ and, by reference, all of the substantive requirements of the Berne Convention (1971) with the exception of Article 6bis, which provides for moral rights:

Independently of the author’s economic rights, and even after transfer of said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action, in relation to, the said work, which would be prejudicial to his honour or reputation.

With minor modifications, this wording found its way into Canada’s Copyright Act in 1931. By contrast, despite eventually joining the Berne Convention in 1989, the United States does little (except to a limited extent through the law of individual states⁵¹) to protect the moral rights of authors other than visual artists, and it was to a large extent responsible for the omission of a moral rights protection requirement in the TRIPs agreement.⁵²

Bargaining Imbalance

Despite support for droit d’auteur in Canada, the copyrights Canadian creators obtain under the Copyright Act do not protect them from “market” or contractual practices that generally lead to their undercompensation and neglect of their moral rights, and much needs to be done to protect creators’ interests. The inequalities that may result in the market interaction between creators and corporate producers were recently acknowledged by the Ontario Court of Appeal in Robertson v. Thomson Corp., the Court stating that “allowing powerful corporations to deprive authors of the fruits of their labour is unjust”⁵³.

The imbalance in bargaining power between creators and producers is probably best demonstrated by the freelance journalists’ and photographers’ disputes with newspaper and other database publishers and aggregators, which developed in the 1990s.⁵⁴ At that time, publishers began to offer contracts to freelancers that do little or nothing to compensate them for digital uses of their works in addition to the usual payment for initial first use in print publications. Creators who signed, and continue to sign, such contracts do not share in the advertising and e-commerce revenue generated by content on media websites. The most frequent result of a refusal to sign was that the job went to another writer who would sign, and in some instances creators who refused to sign were blacklisted.⁵⁵

Canadian freelance journalists have brought class actions against media corporations to protest against the use of their articles, written for print use in newspapers, in commercial databases without permission and further compensation. In its decision in October 2006 in Robertson v. Thomson Corp., the Supreme Court of Canada confirmed the need for the authors’ consent for use of their works in online databases but left it to the trial judge to decide whether or not that consent had been given or could be implied.⁵⁶ Although the courts in Canada have not yet determined this issue of whether older, non-explicit licences granted by freelancers to newspapers cover digital as well as print rights, it is possible, if not likely, that they will come to similar conclusions as courts in the United States, the Netherlands and elsewhere, which have found in favour of the freelancers. However, even if the writers are as successful in the Canadian lawsuits, most publishers are now issuing revised contracts that scoop up all rights and, with very few exceptions, only those freelancers who are prepared to accept these terms get work. A final decision in Robertson v. Thomson Corp. in favour of the freelancers will put money in their pockets for past, infringing online uses but do little or nothing to resolve the difficulty of negotiating adequate payments for licensed online uses in the future.

A further instance of imbalance in bargaining strength between creator and producer has emerged with respect to a right that was introduced into the Copyright Act in 1988. The exhibition right is the creator’s right “to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan”. In 2000 the Department of Canadian Heritage engaged a consultant to study the exhibition right (ER), who concluded that “overall, Canadian visual artists are not benefiting from the Exhibition Right…primarily because exhibitors are not respecting the ER.”⁵⁷ The report states:

While the practice of aggressive negotiating by exhibitors does not infringe the Copyright Act, it is not consistent with the spirit of the ER or that of copyright. An important component of the ER is that artists receive respect for their rights and recognition for the value of their work. The aggressive negotiating approaches of some exhibitors were taking advantage of artists’ vulnerability, since most artists have few options but to comply with exhibitors’ demands.⁵⁸

The report continues:

Given that the ER was included in legislation in 1988, it would be reasonable to expect that much more progress would have been achieved by now.⁵⁹

The authors of the report conclude:

…. Exhibitors are not complying primarily because they are concerned about the associated direct and indirect costs associated with the ER. Also, there is no motivation for them to change their current practices. In the current situation, exhibitors hold the advantage in negotiations since they have the ability to deny purchase and/or the exhibition of artists’ work, depriving visual artists of revenue and/or exhibition of works and the much needed exposure. In these situations, exhibitors are taking advantage of artists’ vulnerability.⁶⁰

Canadian directors are also vulnerable when comes to negotiating with producers. Paradoxically, despite the fact that the Copyright Act does not accord the director of a film the status of an author, they are commonly asked to waive their moral rights of authorship. In most jurisdictions, with the United States as a notable exception, directors are recognized as authors or co-authors of audiovisual works. Lack of authorship status means that they are not entitled to share with producers and other creators in any revenues from the retransmission of copyright works by cable and satellite companies in Canada and makes it difficult to collect moneys allocated to directors in foreign jurisdictions for retransmission and lending or rental of audiovisual works. The practical effect of all of this would seem to leave directors in Canada in a position not much different from directors in the United States, where the corporate producer is usually recognized as the legal “author” of an audiovisual work under the U.S. “works made for hire” rule. Although in both countries, film producers have the upper hand when it comes to bargaining, it is interesting to note that under the provisions of the Independent Production Agreement of the Writers Guild of Canada (WGC), Canadian screenwriters retain the copyright in their scripts. By contrast, American screenwriters working under the provisions of the comparable agreement of the Writers Guild of America cede copyright to the film producer as a work-for-hire. In short, both directors and screenwriters as well as actors working in the motion picture industry in the United States are contracted as employees.⁶¹

The term “work-for-hire” is increasingly appearing in the contracts offered to independent creators in Canada, sometimes after a work has been completed. Since this is a term that is defined in the American copyright statute and that is not part of Canadian law, if it is not fully defined in the offered contract, it is unclear what the producer is asking the creator to agree to and how a Canadian court might interpret such language. Under the American work-for-hire doctrine, the producer owns all of the author’s rights outright, including the right to make further works based on the original work, and is considered to be the “author” of the work. As well as giving the producer total ownership, the work-for-hire doctrine serves as a shield against moral rights claims by creators.

Whatever the legal rights of creators, it must be recognized that the real value of authors’ rights is drastically diminished where an individual author cannot afford either to enforce his or her rights through legal action or to risk loss of work or future work by challenging a producer. For this reason, creators look to their organizations for assistance. Organizations representing creators support their members in endeavouring to counteract the types of the power imbalance we discuss in this paper by negotiating minimum terms or “scale” agreements with producers or recommending model contracts for their members’ guidance.

Scale agreements are negotiated between producers’ organizations and creators’ organizations to establish minimum terms of the engagement of the independent creator by the producer. The creator may negotiate better terms but the producer may not offer less favourable terms. Such agreements have been negotiated, for example, by the WGC, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), Canadian Actors’ Equity Association and the American Federation of Musicians of United States and Canada (AFM).

A number of other organizations have not been able to negotiate scale agreements but have “model contracts” and recommend that their members endeavour to obtain terms comparable to the recommended terms. Such agreements are recommended, for example, by PWAC, The Writers’ Union of Canada (TWUC), Literary Translators Association of Canada and Canadian Artists Representation Ontario.

It seems that the contractual issues faced by creators in Quebec and the rest of Canada do not differ significantly. This is illustrated by the fact that the Writers Guild of Canada in May 2006 was able to negotiate a single agreement with the Canadian Film and Television Association and the Association des producteurs de films et de television du Québec. It is also seen in model contracts, for example, the contracts of TWUC and Union des écrivaines et écrivains québécois (UNEQ) are generally similar in their approach to protecting the rights of book authors with some differences, most more in form than substance. Where TWUC advises authors to reserve important derivative rights such as film or multimedia, UNEQ specifies that a separate contract should be signed if such rights are to be given to a book publisher and that a separate contract should be signed for each right - perhaps the influence of French law. However, where the UNEQ contract contemplates a termination date; the TWUC contract accepts the common practice of English-language publishers inside and outside Canada to demand rights that will last as long as a book remains in print or continues to sell a specified number of copies annually. English-language Canadian publishers have not been willing to limit the contract period to a fixed term of years.

It is open to Canada’s policymakers to mitigate the effect of problematic contractual practices and issues referred to in this Part I and in the introduction of this paper by implementing legislative solutions and according more statutory expression to droit d’auteur principles Canada has always embraced. It is towards some of the principles, as they are found in the laws of certain European jurisdictions, to which we will now turn.