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Douglas Adams’ royalties over his Hitchhiker’s Guide to the Galaxy books continue to be paid to his heirs because he has only been dead for a decade. (©Touchstone Pictures, All rights reserved.)
Douglas Adams’ royalties over his Hitchhiker’s Guide to the Galaxy books continue to be paid to his heirs because he has only been dead for a decade. (©Touchstone Pictures, All rights reserved.)

Start: Tony Wilson

Copyright issues that can affect your business Add to ...

A few columns ago, I talked about the importance of naming your business and, in particular, the need to protect your brand by registering a trademark for the names or logos under which you identify your business to the public. But it still amazes me how many telephone calls I get from small-business owners who want to patent or copyright their company name, rather than trademark it.

Even the news media gets it wrong half the time, for instance when a reporter a few years ago wrote about the “copyright” case between Apple Computer and The Beatles over the use of the “Apple” name in the iTunes store. Wrong! It was a trademark dispute over the Apple name, not a copyright infringement case.

So it struck me that it might be helpful to distinguish the different types of intellectual property.

We all know what a trademark is by now. And in a few weeks I’ll discuss how a patent is an exclusive monopoly, given to an inventor for 20 years to commercially exploit an original invention.

For now let’s discuss copyright. It’s not just for novelists and musicians. If you’re in the restaurant business or the fitness business, or you use marketing companies to design artwork, ad copy and websites, you may be surprised to learn you may have copyright issues.

Copyright means, quite simply, the right to copy. Copyright provides protection for literary, artistic, dramatic, or musical works including computer programs, as well as performance, sound recording and communication signals. Only the owner of copyright has the right to produce or reproduce a work or allow someone else to do that. Copyright is the right granted to the owner of a work to print, copy, or distribute a work or make a “derivative version” of the work, for example a film based on comic book, a TV show based on a novel, and so on. More important, copyright gives its owner the right to stop others from copying that work or a portion of it.

A copyright is simply the right to copy someone else's original work in a fixed form, such as this column. It applies to the following:

1. Literary works, such as books, stories, poetry, text, as well as computer programs.

2. Dramatic works, such as film, DVDs, theatrical plays, and screenplays.

3. Musical works such as songs, with and without lyrics.

4. Artistic works, such as paintings, drawings, photographs, sculptures, and architectural works — even things like maps, blueprints, compilations and mortgage tables.

The owner of copyright, who is not necessarily the original creator, has the right to prevent another party from making copies of that work. At its most basic, that's all it is. Of course, it’s more complicated than that, which is why there are numerous textbooks, cases, case comments and legal articles on the topic. Some lawyers do this for a living too.

The statutory framework for copyright in Canada is the Copyright Act, R.S.C. 1985, c.C-42, as amended. There have been a number of amendments to Canada’s Copyright Act since it was first enacted in 1921: many of the amendments extended the term of the copyright in certain circumstances. Copyright is once again being reviewed in Canada.

Copyright in Canada for a literary work currently extends for 50 years past the death of the author. No royalties or other compensation is payable to the heirs of Shakespeare, Homer, or Jane Austin, even though their works are still very much in print. That is because the authors have been dead for more than 50 years and their works have fallen into the “public domain.” On the other hand, Douglas Adams’ royalties over his Hitchhiker’s Guide to the Galaxy books continue to be paid to his heirs because he has only been dead for a decade.

With the advent of technology, copyright extends to other matters such as:

1. Sound recordings such as LPs, CDs, VHS, DVDs and BlueRay.

2. Communication signals (the electronic signals that are transmitted by broadcasters).

3. Performances by actors, singers, dancers, musicians, and so on.

Copyright can be complicated. Some rights derive from other rights, and there are separate rights that you would not expect to be separate. For example, when you load a CD into your car stereo, there is copyright in the device (the CD itself) and also a copyright in a song. The recording of a song is one right, the song itself is another. They could be owned by different parties. One might think of copyright as a “pie” where the various neighbouring and overlapping rights that could be held by performers, writers, musicians, broadcasters and DVD manufacturers and distributors are sliced up.

When someone owns copyright, the Copyright Act gives the owner the rights to use and commercially exploit those rights. But bear in mind that many originators of artistic, literary, musical, or dramatic works no longer own the works they have created. Why? They have assigned their rights to publishers, music companies, film production companies, and other business that require ownership of the copyright to commercially exploit the “product.”

Authors and creators — unless they're successful and economically very powerful — will have assigned copyright to see their manuscript in print, hear their song on the radio, browse for their novel in a bookstore or see their screenplay on the screen. The commercial world often requires many authors and creators of works to assign those works for commercial exploitation.

Ownership of the copyright in a work includes a number of other rights you might not otherwise think of. For example:

1. The right to convert a dramatic work into another kind of work, such as a novel.

2. The right to convert a novel into a dramatic work.

3. The right to publish a translation of a work.

4. The right to make a sound recording (like an audio book) of a dramatic, musical, or literary work.

5. The right to reproduce, publicly present, and adapt a film.

6. The right to broadcast the work on TV or cable.

7. The right to license computer programs.

Copyright has its limitations, though. It applies to songs, novels, plays, magazine articles, computer programs, and so on, but it does not apply to plots or characters in a novel, factual information, the idea for a plot for a novel, or the title to a song, nor will it protect the name of a television show, book, or movie, although those might be protected through trademark law.

Someone who uses a copyrighted work without consent is said to be infringing on the owner's copyright. Infringement is actionable under the Copyright Act. There are, however, certain exceptions to infringement, such as the private performance of another person’s song in your house or making a copy of a musical recording for private use.

Fair dealing allows people to quote works from books and articles and other works for private study or research or for criticism, review, or news reporting. But infringement of copyright is:

• The public performance of a theatrical play without consent of the owner of those rights.

• Photocopying articles for distribution to students at a university or school without consent of the owner of those rights.

• Video recording a concert without consent of the owner of those rights.

• The mere reprinting of an article without consent of the owner.

Here’s where copyright issues may surprise you and affect your business.

Even the use of background music in an aerobics studio or a restaurant is subject to copyright, because someone else's music cannot be publicly played without consent, and this usually means money. Restaurateurs, bar owners, and especially fitness studio operators are sometimes surprised to learn that they’re required to pay a rights collective, such as SOCAN or NRCC (which became Re:Sound Music Licensing Co. on March 1), an annual tariff based on a formula derived from the number of seats in their establishments or members in their fitness clubs. But that's the law. And frankly, why shouldn’t artists be paid for use of their work in public by others? Even in a fitness studio.

Here’s another example. Small business owners who engage advertising and design companies to create logos, artwork and even websites for the business may be surprised to learn that the copyright in the design and artwork is almost always retained by the design company that created it, not the business that paid for it to be done. Your written contract would have to have assigned the copyright in the designs, ad copy and artwork to you for you to “own” the copyright. So if you’re concerned, maybe you want that assignment language in the contract you have with your agency.

Likewise, if your company has hired employees to create designs, ad copy or other “works,” your company owns the copyright in their work product, unless of course, they are “contractors” and not employees, in which case, absent a contract that says otherwise, they own the copyright in their work product, not you. So if you’re concerned, you should put something in the contract you have with your workers to formally establish your copyright ownership of work product.

A discussion of copyright must include the issue of moral rights. The creator of a work, even though he or she may have sold copyright of a work, still maintains a moral right to the work, to prevent the work from being distorted, mutilated, or otherwise modified in a way that is prejudicial to the reputation of the work or the creator. The best example of this in Canada is case of artist Michael Snow, who created some flying Canada Geese sculptures in the Toronto Eaton Centre. The mall was forced to remove red Christmas bows from around the geese's necks as they distorted his original work. But copyright assignments often contain a waiver of the artist’s moral rights.

Finally, you should be aware that every country has different laws governing copyright, and the number of years that copyright is protected will differ, depending on the “work” and the country. Countries that have signed an international treaty called the Berne Convention automatically extend to authors from other signatory countries the same copyright protection as they give their own nationals.

Copyright is a complicated area despite this attempt to simplify it. More in depth information on the Canadian Intellectual Property Office website, and at SOCAN's site.

Special to the Globe and Mail

Vancouver franchise lawyer Tony Wilson is the author of Buying A Franchise In Canada – Understanding and Negotiating Your Franchise Agreement and he is ranked as a leading Canadian franchise lawyer by LEXPERT. He is head of the Franchise Law Group at Boughton Law Corp. in Vancouver and acts for both franchisors and franchisees across Canada, many of whom are in the food services and hospitality industry. He is a registered Trademark Agent, an Adjunct Professor at Simon Fraser University and he also writes for Bartalk and Canadian Lawyer magazines.

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