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Fair warning: get the rights and you can't go wrong

By Sheldon Teicher, Vice President, YTV Canada Inc,
and Jordan Jacobs, Cassels Brock & Blackwell
July 3, 1996; Canadian FundRaiser

Event production is not a simple business. To both protect the legal integrity of an event and maximize its commercial potential, you must consider a number of legal issues carefully and deal with them before the staging of the actual event. In addition to the commercial contacts one would expect (i.e. with the venue, suppliers of products and services, etc.), event producers and their lawyers should consider rights issues: what rights must be obtained to produce the event, whether licenses must be secured from others or provided to others in order to promote the event, how to protect rights in the event, and how the intellectual properties associated with the event may best be commercially exploited.

Are there rights to be secured?
When producing an event, one of the first steps is to consider whether or not any rights must be secured. Most special events involve the use of some intellectual properties and/or talent. For instance, at a music festival, contracts are required for the performers, while a film festival requires deals with the film distributors. In each case a variety of copyright and trade-mark issues will arise. Each of the possible components of the event (from logos and slogans to music and performers) should be listed to identify which components are protected or owned by anyone other than the event producers.

Avoid infringement of a bundle of rights
Avoiding copyright infringement lawsuits is obviously a worthwhile goal for all event producers. Section 2 of the Canadian Copyright Act defines copyright (in part) as "the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever." The owner of copyright in a work controls a bundle of rights which can be sold or licensed with restrictions as to term, territory and manner of use. Copyright exists in works regardless of whether they are published or registered, as long as the works are original and reduced to a material form. Where an infringement of copyright occurs, the copyright's owner may sue for damages or seek an injunction, an account of the profits gained through the infringement or delivery of the infringing articles.

• Literary, Dramatic and Musical works covered for life of the author + 50 years
  According to section 27 (1) of the Act, works covered by copyright cannot be reproduced in any material form, issued to the public or broadcast without the copyright owner's permission. Also, under section 27 (5) of the Act, infringement may occur where someone, for personal profit, permits a theatre to be used for unauthorized public performance of a work. Acceptable uses of copyright without license or permission include fair dealing (i.e. using the work for criticism, review or various educational purposes). You must consider whether an exemption will support the unauthorized use. Also, note that the public performance of a musical work incurs the requirement that royalties be paid to collecting societies (i.e. the Society of Composers Authors and Music Publishers of Canada) according to established fee schedules.
  
  Generally speaking, for these works, the copyright exists for the life of the author plus 50 years. Therefore, consider carefully whether a work has entered into public domain.
• Sound Recordings and Films covered for 50 years from date of manufacture
  Reproducing the work in any material form, issuing copies to the public, broadcasting the work or playing/showing the work in public is not permitted except under license from the copyright owner or pursuant to an exemption. Under section 11 of the Act, the copyright exists for 50 years from the end of the year in which it was made, and is owned by the person or corporation who owned the original physical recording at the time it was made (for films this is usually the producer or director).

Trade-marks may be registered or unregistered
Section 2 of the Canadian Trade-marks Act defines a trade-mark as a mark used by a person for the purpose of distinguishing his or her services or wares from those of others. The ability to exclusively distinguish a particular brand of goods or services is what gives the word or symbol its value as a trade-mark. However, unless the trade-mark is protected, that value may be lost.

Trade-marks may either be registered or unregistered. They are registerable unless they fall into one of the exhaustive list of prohibited categories set out in section 12 of the Trade-marks Act, which includes trade-marks which are confusing with other trade-marks. Names, logos and symbols therefore may all be protected trade-marks, so that infringements may be subject to legal action. Consequently, it is important to search the registry for trade-marks and secure (through purchase or license) the right to use protected trade-marks before using them. A search beyond the Trade-mark Register (i.e. trade journals and phone books) is likely necessary to avoid infringement of unregistered trade-marks.

Legal protection of trade-marks result from common-law action for passing-off or statutory action for trade-mark infringement.

Contracts serve variety of functions
Where the event includes the appearance of any performer, whether actor, musician, comedian, television personality, etc., you must contract for their appearances or have them sign a release, even if no payment is being made. The contract serves a number of functions. First, it describes the relationship between the parties and the specifics of what each party will do as its part of the bargain. Second, it provides a reference in case any dispute (either between the parties or involving third parties) arises following the conclusion of the event. This may be particularly important where a third party claims it had the exclusive right to use the performer for particular purposes.

A properly worded contract (i.e. with all the necessary representations, warranties and indemnities) may limit the liability of the event producers in the face of such after-the-fact allegations. In addition, a waiver of moral rights is useful if any changes to the work if copyright are involved.

Licensing elements to promote the event
There are two sides to the licensing relationship - licensor and licensee. The licensor allows the licensee to use the licensor's rights for particular purposes stated in the licensing agreement. The producers of an event may find themselves on either end of the licensing arrangement. Licensing agreements are important because they define the intellectual properties and allowable uses that are the subject of the grant. Furthermore, licensing agreements define the term, territory, and form of any grant of rights.

As part of the sponsorship agreements, sponsors may have the right to be included in various promotions of the event. Provisions may range from having the sponsor's logo printed on any billboards or posters or other printed advertisements promoting the event, to providing a booth for the sponsor at the site of the event. To avoid potential rights infringements, sponsorship agreements should include provisions which detail the allowable uses by the event promoters which are subject to trade-mark or copyright protection.

The extent of sponsorship agreements entered will influence the extent to which conflicts may occur. Where there is a single title sponsor of the event, it will be easier to control uses of the event's intellectual properties. For example, when the Barnes Exhibit was hosted by the Art Gallery of Ontario, the securities investment firm Gluskin Sheff paid $1 million for the right to be the exclusive sponsor of the event. Conversely, sponsorship levels are often tiered to allow different levels of participation or broken up to provide category exclusively (i.e. financial institutions, beverages, media outlet, etc.). At the United States Open tennis tournament, Infiniti automobiles was the title sponsor of the men's singles, while Redbook Magazine was the title sponsor of the women's singles.

You'll have to decide for each event whether you can maximize sponsorship revenues by granting exclusive sponsorship rights, or by breaking up the sponsorship of the event. Generally, as the number of sponsors increases, so too will the complexity of the intellectual property licensing agreements for the event. Protecting the Event

• Trade-mark registration straightforward An event organizer will either use an existing name (requiring a license) or will choose a new name for the event (and will likely want to protect that name). Whenever any logo, word or slogan distinguishes a particular brand of goods or services from others, that logo, word or slogan is, by definition, a trade-mark. However, without registration, the use rights in that trade-mark are only enforceable through the common law action for passing off, and only in the area where the owner has established or made known that trade-mark.
  
  The process for registration is relatively straightforward. A quick computer search is inexpensive and will tell you if the mark you want is currently registered. Manual searches to determine the availability of trade-marks in Canada cost approximately $70 to $100, and will provide you with a better sense of "neighbouring marks" which may be confusing.
  
  Applications for the registration of trade-marks must include the intended or existing commercial association with wares or services with which the trade-mark is to be used, the date use began, a statement of intended use (where the trademark is proposed, but has not yet been used), a filing fee of $150, and the address of the owner. The Trade-Marks Office, assuming it has no concerns of its own, then advertises the trade-mark for opposition. If it is unopposed, a further $200 fee is payable when the certificate of registration is issued. The registration process takes nine to twelve months (barring possible obstacles such Trade-Marks as Office actions or oppositions to the application).
  
  Proper notation ("TM" for unregistered marks and "R" for registered marks) on use of trade-marks is a good way to warn others away from use of your trade-mark.
  
  
• Copyright protection advisable
  While copyright exists in the work regardless of registration, a voluntary registration of the copyright is possible in Canada. The benefit of registration, at a cost of $35, is that the certificate of registration is deemed to be proof that copyright exists in the work and that the person registered is the owner of the copyright. Unlike the trade-mark register, the copyright register does not include a depository of the works themselves. Practically, affixing the copyright symbol followed by the name of the author and the year of creation may aid the resolution of disputes. Event producers will want to protect copyright in the event posters, advertising and other material.

Contests/Raffles involves government regulations and rights issues
Contests or raffles are often conducted at events, either to raise money for the event or for charities. Event producers wishing to run a contest must deal with not only the federal requirements (i.e. Competition Act, Criminal Code) and provincial regulations (i.e. the Régie des loteries et courses du Québec), but also rights issues. Often the right to give away and promote the prizes must be obtained, and securing such rights may require going beyond getting a free television set from a local retailer in a handshake deal.

Not only may the types and brands of prizes have to conform with existing event corporate sponsorship arrangements and exclusivities, but also the prize manufacturer's distribution contracts with its dealers and retailers may, without the local retailer's awareness, prohibit using any product for promotional purposes except with the manufacturer's consent. That promotional use may be further restricted by the qualification that the manufacturer's name or logo must be used in connection with the promotion of the contest. The prizes should not violate existing promotional agreements for the event, or limit the potential to grant category exclusivities in future sponsorship agreements.

Rights issues beyond the live event
Ticket sales are commonly thought of as the primary means of generating income for events. Yet the commercial success of any event may be enhanced by other means of exploitation. In order to avoid conflicts between the various types of exploitive endeavors, and still maximize the commercial return and limit any restrictions to future developments, it is important to consider carefully at the outset what possible means of exploitation are appropriate for the event and to contract appropriately.

• Merchandising for additional income
  Clothing (t-shirts, sweatshirts), poster and postcard merchandising is traditionally used by events to generate additional income. Usually, the logo or name of the event will be screened onto the merchandise and sold on site during the event and perhaps off-site as well. From a consumer's perspective, however, the value of the merchandise may be associated with its uniqueness. Similar merchandise (i.e. which includes the event's logos, etc.) produced by sponsors of the event for giveaways or other promotions may reduce the retail market for event merchandise. Therefore, when entering licensing arrangements for the retail sale of merchandise, event producers should both attempt to differentiate the type of merchandise to be sold from that which otherwise may be produced, and retain the right to approve any items to be sold. The approval right will also ensure a level of quality control vital to the marketability and integrity of any trade-mark.
  
  
• Video/CD/CD ROM/Interactive create a permanent record of the event A videocassette, musical Compact Disc, CD ROM or interactive computer game of some aspect of the event may be produced for sale to the public. Videos and musical CDs are commonly produced for events which lend themselves to repeated viewings or listenings, such as music and comedy festivals. Once again, getting the rights cleared later will be more expensive and difficult.
  
  In order to produce any of these items for sale, authorization, perhaps involving royalty and other payment arrangements may have to be obtained from the individual performers, record companies, film producers and companies, music publishing companies and others who hold rights in the material performed or have contracts with the performers. Usually these arrangements are contemplated in the initial contract with performers, but will also have to be separately negotiated with the other companies whose involvement only becomes relevant when a permanent record of the performance is proposed.
  
  
• Broadcasting
  You may broadcast the event either by television or radio, and either live or in a pre-packaged format. Television broadcasts may be over-the-air or by cable, satellite, or pay-per-view. Although you may be able to enter agreements for broadcasts via each of these formats, you may generate greater income if you have exclusive broadcast rights. Broadcast agreements should include provisions regarding the allowed uses (promotional and otherwise) by the broadcaster of the intellectual properties of the event.
  
  Again, the event producers will want to retain some approval rights regarding promotional and advertising uses of the event's intellectual properties. Also, broadcasting agreements should include provisions whereby the event sponsors gain priority for sponsorship of the broadcast and for the purchase of commercial inventory. These priority rights may be available to only those event sponsors which have specifically contracted for them with the event producers and which have paid a premium for the right.

If you have paid attention to these rights issues, you will not only avoid messy litigation, but will build equity in the intellectual property associated with your event. You can then exploit it for years to come. Based on a presentation at "Fairs, Festivals and Fundraisers: Legal and Risk Management Issues for Special Event Organizers", sponsored by the Canadian Bar Association - Ontario, in November, 1995, For more information, call (416) 534-1191 ext 154.

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