Gaming – Edwards Creative Law

Five New Year’s Resolutions From Your Local Entertainment Lawyers

Michael Duboff — Thu, 21 Dec 2023 21:49:27 +0000

It’s getting to that time of year where individuals reflect on the previous year’s accomplishments and everything they want to work on and improve in the coming year. At Edwards Creative Law, we are no different!

This year, we have come up with a few potential New Year’s resolutions for our creative blog readers out there – but since you’re a regular reader of this blog, you probably already know this stuff!

These fundamental considerations are for creatives of all types to keep in mind when working with others – whether it is a longtime partner, a new collaborator, or someone engaging you for a job.

New Year’s Resolution #1: Don’t Rush

Starting a new project is always an exciting time. However, it is important to take time to make sure that the project, and individuals you will be working with, are the right fit. It’s easy to rush into things when excitement abounds. However, putting the time in upfront can avoid trouble down the road.

It may be much more difficult (and expensive) to resolve a dispute that arises 10 months into a project – after everyone has already put in a bunch of time, effort, and money – than if that issue had been identified and dealt with at the outset because the parties had taken more time to consider their agreement.

It may be a red flag if a prospective partner is putting pressure on you to sign agreements before you have had the opportunity to thoroughly review them.

New Year’s Resolution #2: Know Your Partners

As part of your due diligence before making any commitments, you should spend time getting to know your partners. Have conversations with them. Discuss each of your expectations of the project and of each other. Complete independent research.

Look up the individuals or organizations online to see if they have credits or a virtual footprint. For example, if the partner is selling themself based on prior work and successes, this can often be found online. In addition, speak to mutual acquaintances for their thoughts.

You never know how long you may be tied to a partner, and therefore, you want to make sure they are the right fit.

New Year’s Resolution #3: Discuss Key Terms

Once you are confident in who you are working with, make sure to have conversations with them about the project. Key terms and expectations should be discussed at an early stage.

What are the obligations or services that each party needs to perform? Are there deliverables, and if so, what are the details? Is anyone contributing finances? Who is entitled to receive compensation and/or revenue from the project? What does ownership of the project look like?

New Year’s Resolution #4: Agree on Terms

A direct follow-up to the previous point is to make sure there is agreement on the key (essential) terms of the relationship. Some key terms are identified in the previous paragraph. Recording the agreed terms in some form is important.

While a long-form agreement is not required, a recording that sets out the agreed-upon terms as well as both parties’ agreement of those terms is important in creating an enforceable contract. The parties’ agreement can be shown through signature or a clear communication (such as, an email) wherein each party writes that they agree to the terms.

New Year’s Resolution #5: Work with an Entertainment Lawyer

If you have any questions, issues or need assistance with the topics discussed in this blog (or other entertainment legal topics), know that there are entertainment lawyers to whom you can always turn.

Our job is to advocate for you in legal matters relating to the entertainment industry. This may be to discuss legal considerations relating to your work, draft, and review agreements, evaluate legal risks and discuss how to minimize or avoid them, and many other types of legal services.

Conclusion

This blog identifies a few fundamental legal considerations for creatives to keep in mind as we enter the new year. Remember to take your time, make sure the opportunity is the right one for you, and make sure that the key terms to the relationship are discussed and agreed upon.

If at any time you have questions and are uncertain how to proceed, we encourage you to reach out to an entertainment lawyer for assistance.

From all of us at Edwards Creative Law, we wish you a happy and safe holiday season!

Edwards Creative Law is Canada’s Entertainment Law Boutique, providing legal services to Canadians, and international clients who partner with Canadians, in the Film & Television, Music, Video Games and Apps, Publishing and Literary industries.

For more information or to set up a minute Discovery Call with one of our entertainment lawyers please feel free to Contact Us.

* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.

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Canada Day 2023: The Perfect Day to Support Canadian Content (7th Edition)

Byron Pascoe — Fri, 30 Jun 2023 13:01:39 +0000

The History of #CandianContent Posts

Canada Day 2023 – This series of blog posts was initiated in 2015 with the intention to share some Canadian content ideas on Canada Day – including films, music, TV programs, books, games, and more.

While we know every day is a good day to consume and share #CanadianContent, Canada Day is another reason to celebrate it, be proud of it, and support the creation of more of it.

New Canadian Music Releases in 2023

It’s been a breakout year for a variety of Canadian performers still very into their careers including Elijah Woods, Devon Cole, Aysanabee, LAVI$H, Jules is Dead, Katherine Li, and many more.

The JUNOs which took place in Edmonton highlighted the many songs popular on streaming platforms to radio, around the world, from vocalists, producers and composers based here in Canada. The annual event moves locations to Halifax in 2024.

For recommendations to build your playlists, check out the recently announced Polaris Prize longlist, with albums from soon to be household names from JayWood to Zoon, alongside industry veterans.

New 2023 Canadian Film and Television Series

A breakout hit in Canada, and ideally soon in the US with a forthcoming release on The CW, “Sullivan’s Crossing” filmed in Nova Scotia included musician T. Thomason in the ensemble cast.

The Oscars constantly has Canadian content, and this year was no exception, including with Women Talking directed by Canada’s own Sarah Polley. Brendan Fraser was the first Canadian to win the Academy Award for Best Actor for The Whale.

Canadian representation at the Prime Emmys included Sandra Oh, Norm MacDonald, and Seth Rogen.

For a full slate of fellow Canadians, check out the nominees of the Canadian Screen Awards. The Porter, Sort Of and Brother are among the many stand outs to check out.

Canadian Books Released in 2023

Unfortunately, the vessel who provided endless interviews with Canadian writers and those far away, Shelagh Rogers recently retired from CBC and her popular radio show The Next Chapter. However, an archive of those interviews and book recommendations are still available online.

Whether you’re intrigued by the unique premise of Scotiabank Giller Prize-winner Sean Michaels’ “Do You Remember Being Born” set to release in September, or you’re drawn towards the poignant narrative of Michelle Porter’s “A Grandmother Begins the Story” published in May, or you’re reading the latest collection of preschool books from Super Simple Songs to your young child, there’s undoubtedly a Canadian book out there for every reader.

#CanadianContent – Video Games

Video games have always been a significant part of the Canadian cultural landscape, as this genre of entertainment continues to be a significant economic driver of the entertainment industry beyond the more traditional ways to ingest content on screens.

In 2023, we have seen some great additions including Montreal’s EA Motive “Dead Space,” a thrilling game that quickly gained traction amongst PlayStation 5, Xbox Series X/S, and PC players.

Out of Vancouver there was “Sons of the Forest” from Endnight. Also with a Vancouver connection was “Minecraft Legends” and out of Toronto came “Ravenlok” by Cococucumber.

Canada Day 2023 Concerts

We have returned to being able to celebrate Canada Day in person, with many other people, and here are some of the performances happening across our country.

Ottawa (LeBreton Flats) – The daytime ceremony will feature Canadian artists such as Delhi 2 Dublin, Tyler Shaw, Josiane and Diyet. Later performances will feature Jann Arden, Aysanabee, Preston Pablo, Jojo Mason, Dax and Madison Violet.
Toronto (Woodbine Park) – If you’re celebrating in the GTA, be sure to visit the Q107 Canada Weekend from June 30^th to July 1^st. Canada Day performances include, After the Gold Rush (Tribute to Neil Young), Monkey Wrench (Tribute to the Foo Fighters), Aeroforce (Tribute to Aerosmith) and more.
Toronto (Harbourfront Centre) – Toronto Symphony Orchestra will kick off festival season with Broadway star Jewelle Blackman playing a free concert on Canada Day. Other performances include the Strumbellas, Crystal Shawanda, the Toronto All-Star Big Band and more.
Winnipeg – The Forks – This year’s theme for Canada Day at The Forks is “Finding our North Star” and the celebration will conclude with a drone show pairing ancestral celestial teachings with cutting-edge drone technology which is new to Winnipeg. Performances include Darryl Buck, Onna Lou, Tommyphyll, HERA, Jade Turner and more.
Vancouver (The Shipyards) – This year, in Vancouver, Canada Day will be celebrated live at the Waterfront at The Shipyards. The event will run from 11:30 pm to 4:30 pm with entertainment and a Beer Garden. This event will feature performances by local artists such as Melanie Dekker – with the Sensational Side-kick, Blazing Eraz, Randy Swallow, and Mostly Marley.
Surrey (Cloverdale) – This free event allows you to experience Western Canada’s largest Canada Day event in the heart of Cloverdale. This event features performances by Broken Social Scene, Corwn Lands, Neon Dreams, JenZ, Kiera-Dawn Kolson, PIQSIQ. and more.
Canada Place (Port of Vancouver) – The Vancouver Fraser Port Authority invites residents and visitors on July 1 for the second annual Canada Together which features a diverse lineup of entertainment and activities and the return of the annual citizenship ceremony welcoming new Canadians. This event will feature performances by Pat Chessell, Spakwus Slolem (Eagle Song Dancers), Adam Woodall Band, The Fugitives, Tegan & Sara and more.
Halifax-Dartmouth (Dartmouth Ferry Terminal Park) – If you’re in the Halifax-Dartmouth area, be sure to visit KANA’TA: Canada Day 2023 celebrations on Saturday, July 1, 2023. This Canada Day event offers a variety of new and refreshed cultural, musical, and family-friendly events to enjoy. Music for this event will feature performances by ANSMA House Band, Dubey Downey, Asia, Cory Adams, Cyndi Cain and JRDN (Jordan Croucher).
Montreal (Old Port) – On July 1st, Montrealers can celebrate Canada Day in the Old Port of Montreal. Like a big neighbourhood block party, everyone is invited to come to the Quai de l’Horloge to have fun, and enjoy a piece of cake. DJs Lux and Klein will end the festivities with a musical performance to get everyone dancing to the beat.

If you’ve been waiting for a good time to start spending more of your entertainment bandwidth with content made in your Canadian neighbourhood and/or by other Canadians, it’s Canada Day. Enjoy!

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What is an Entertainment Lawyer & How to Hire One: A Comprehensive Guide

Erin Moskal — Mon, 19 Jun 2023 12:00:50 +0000

Introduction: Your Path to Success with an Entertainment Lawyer

Hiring an entertainment lawyer can be a critical step in the career of an artist, producer, director, writer, developer, or entertainer in Canada. This guide will walk you through the process, answering key questions, such as “what is an entertainment lawyer”, and providing insights into the world of entertainment law.

What is an Entertainment Lawyer?

You may be wondering, what is an entertainment lawyer? How is an entertainment lawyer different from a “regular” lawyer? An entertainment lawyer restricts their practice to the needs of client in the entertainment industry. They work with clients in various sub-industries: for example, music, film, television, video games, visual arts and theater, and help navigate complex legal issues, protect intellectual property rights, and negotiate contracts.

What Does An Entertainment Lawyer Do?

Contract Negotiation and Review

One of the primary responsibilities of an entertainment lawyer is to negotiate, review, and draft contracts for their clients.

This may include negotiating contracts for record deals, film and television productions, talent management, and licensing deals.

Intellectual Property Protection

Entertainment lawyers also help clients use the Canadian legal system to protect their rights, such as copyright law and trademark law, ensuring they are properly registered and enforced.

Litigation and Dispute Resolution

In cases where disputes arise, most entertainment lawyers represent clients in court or alternative dispute resolution processes, such as mediation and arbitration.

Why Do I Need An Entertainment Lawyer?

You may be asking, “do I need an entertainment lawyer”? Hiring an entertainment lawyer is essential for anyone in the entertainment industry because of the unique legal challenges and complexities it presents.

An entertainment lawyer can help protect your rights, negotiate better deals, and ensure that you are following industry-specific laws and regulations.

An entertainment lawyer possesses the knowledge and experience necessary to navigate the legal landscape of the entertainment world, which can be invaluable for all entertainment professionals.

How Much Does an Entertainment Lawyer Charge?

Lawyer’s Hourly Rate

Most Entertainment lawyers charge an hourly rate for their services. This rate will vary based on experience, location, and the complexity of your case. It’s important to discuss the hourly rate with your prospective entertainment lawyer to ensure you have a clear understanding of the costs involved.

What are Hourly Services

Hourly services involve billing clients based on the number of hours an entertainment lawyer spends working on their case. This billing method is common for matters with an uncertain scope (such as negotiating contracts), as it allows for greater flexibility in addressing evolving legal issues.

What are Fixed Fee or Flat Fee Services?

Some entertainment lawyers may offer fixed fee services, where a specific task or project is completed for a prospective client at a predetermined, flat rate. This billing method provides clients with certainty regarding costs and can be advantageous for matters with a well-defined scope (corporate law, for example).

Estimates for Legal Services

Can I Get an Estimate for my Legal Matter?

An estimate for legal services is a rough projection of the total cost of legal representation based on the entertainment lawyer’s understanding of your situation and the anticipated scope of work.

While it can be difficult to provide precise estimates due to the unpredictable nature of legal issues, a well-informed estimate can help clients budget for legal expenses and set realistic expectations. It is essential to discuss estimated costs with your entertainment lawyer and be prepared for the possibility that actual costs may differ from the initial estimate.

Industries Served by Entertainment Lawyers

Entertainment lawyers serve a wide range of entertainment industries, including live action, animation, video games, app and software development, music, and modeling.

Each of these industries has its own set of legal challenges and considerations, which an entertainment lawyer can expertly address.

Live Action and Animation

In the live action and animation industries, an entertainment lawyer can help production companies and independent producers with matters such as intellectual property protection, licensing agreements, talent contracts, distribution deals, production agreements, and postproduction.

They can also assist with navigating regulatory requirements and obtaining necessary permits for film and television projects such as distribution rights for example.

Video Game, App, and Software Development

An entertainment lawyer plays a crucial role in the video game, app, and software development industries. They can help protect intellectual property rights, negotiate licensing agreements, and draft contracts with developers, distributors, and other parties.

They also have expertise in contract law and navigating the legal complexities of digital distribution and revenue-sharing arrangements.

Music Industry

In the music industry, an entertainment lawyer can assist with a variety of legal matters, such as negotiating and drafting record deals, publishing agreements, and performance contracts.

They can also help protect intellectual property rights, make contractual agreements, manage licensing deals, and resolve disputes involving royalties, copyright infringement, or other industry-specific issues.

Modeling Industry

Entertainment lawyers are also invaluable to the modeling industry and business, as they can help negotiating and drafting contracts with agencies, photographers, and other industry professionals. They can also assist with issues related to image rights, licensing agreements, and the protection of intellectual property.

Conclusion: Your Path to Success with an Entertainment Lawyer

Navigating the entertainment industry can be complex and challenging, but with the right legal guidance, you can protect your interests and maximize your opportunities for success.

In summary, hiring an entertainment lawyer is a wise investment for anyone in the entertainment field. They can provide expert guidance and assistance in navigating the unique legal challenges and complexities of the industry, helping you to protect your rights, secure better deals, and ensure compliance with industry-specific laws and regulations.

Now that you’re equipped with the knowledge to find the ideal entertainment lawyer for your needs, take the next step and contact our law firm by booking a complimentary discovery call. Our team of experienced professionals provides personalized, effective legal representation for clients in the entertainment industry.

For more information or to set up a minute Discovery Call with one of our entertainment lawyers please feel free to Contact Us.

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Esports Sponsorships – Activities, Opportunities & Considerations

Erin Moskal — Wed, 24 May 2023 20:38:45 +0000

Esports Sponsorships Introduction

Sponsorships in Esports are an integral part of the landscape, just as they are in traditional spectator sports. Esports is an exploding entertainment sector on pace to outstrip the film and television industry in terms of sheer economic activity. Sponsorship – in terms of volume and complexity – is one of the fastest-growing and effective marketing communication tools with respect to Esports.

Currently, there are more sponsorship opportunities at the team level compared to those for individual gamers/athletes. But as individual athletes grow their own fan bases, athlete-specific sponsorships opportunities are on the rise.

Whether in acting, music, or the traditional sports realm, the legal considerations for Esports sponsorships generally align with considerations for other forms of sponsorship for talent. This blog will look at a few of those overlapping considerations, as well as some of the considerations that are specific to Esports sponsorships.

General Considerations in Esports Sponsorships

In any sponsorship deal, the sponsored activity is one of the primary items to be clearly identified. For the sponsor, the scope of the activity and the obligations of the sponsored athlete (or musical artist, influencer, etc.) tied to the activity should be as broad as possible, whereas it is to the sponsored athlete’s benefit to limit the ambit of that activity as much as possible.

The activity could include participation at an in-person or online Esports event, wearing sponsored clothing, or using a sponsored product.

Intellectual Property and Rights in Esports

The heart of any sponsorship agreement is the rights of association and all related rights that are granted to the sponsor. However, from the sponsored athlete’s perspective, it is important to limit those rights to ones that are necessary to carry out the sponsorship.

A sponsored athlete must deliver marketing and promotional value to the sponsor by its association with the sponsored athlete but wants to reserve any rights to itself not necessary to carry out the sponsorship. This helps the sponsored athlete maintain control of their brand and preserves potential future opportunities based on the rights it didn’t grant in a particular sponsorship.

One example is a sponsored athlete agreeing to appear at sponsored event and to allow promotion of that fact, but not granting the rights to film/record and make content for social media of their appearance at the event (unless of course, the sponsor is willing to pay more for that right).

Typically, a brand will want to be the “exclusive sponsor” associated with any sponsored athlete. But a sponsored athlete will generally want to try to limit the scope of that exclusivity, whether based on the territory that the exclusivity applies to (e.g. “Canada only”), or product category (e.g. “the exclusive energy drink sponsor”) and most definitely by the time period or term of the exclusivity.

The sponsored athlete will also need to grant the necessary sponsorship and other marketing and media rights for the sponsor to engage in all promotional activities contemplated in the agreement.

What Forms of Payment are Available?

Compensation generally comes in the form of a fee to a sponsored athlete, or the benefit derived by a sponsored athlete from a sponsorship arrangement. Fees are the most traditional form, but another common way to provide a benefit to the sponsored athlete is “in kind” consideration.

For example, a brand/sponsor may only provide free product (e.g. energy drink supplies) to an individual in exchange for some form of marketing or promotion by the sponsored athlete.

Often, there will be some combination of fee and “in kind” consideration provided for in the sponsorship agreement.

Esports Sponsors – Advertising and Promotion

In all sponsorship agreements, it is important to determine what advertising and promotional obligations a sponsored athlete takes on.

What are their deliverables?
Is it to use their social media platforms to amplify the brand the sponsor?
How many times are they required to post to social, for example, during the duration of the agreement?
Three times a week? Monthly?
What messages are they going to put out on social?
What level of approval does the sponsor have over the message being delivered through the channels?

Generally, as with other social media influencers like Esports athletes, the question of authenticity often comes up.

Is the product or brand sponsoring anything the athlete would naturally be associated with or use?
Is the product or brand off-base or disconnected from the athlete?
If so, does the sponsorship ultimately do damage to the brand of both the athlete and the sponsor?

Specific Considerations for Esports Sponsorship Deals

Like all sponsorships in entertainment or in traditional sports, the timing of key events in a season will dictate how much urgency, and therefore, leverage an athlete has in negotiating a sponsorship deal.

For that reason, it is important that Esports advisors and lawyers know the key dates in an athlete’s season, as well as upcoming tournaments, and use these dates and potential results to parlay them into a better deal for the athlete.

What are “Break Clauses”?

All sponsorship agreements can potentially contain a “break” clause which allows one of the parties to terminate the agreement early in specific situations.

A specific application of a break clause to an Esports sponsorship may provide a right to terminate a sponsorship in favour of the sponsored athlete if the athlete misses an event or fails to reach a particular threshold (e.g., not making it through to the next round of a gaming tournament).

More athlete-friendly break clauses may provide for an athlete to terminate a sponsorship without further obligation where a sponsor loses its official status with a particular league, or it may instead provide that a sponsor loses their renewal rights under the agreement.

Esports-Specific Payment Considerations

Again, the level and timing of payments are important in all sponsorship arrangements. How much of the sponsorship fee is paid upfront versus paid over specified milestones? Additionally, how much of the compensation is contingent on the sponsored athlete reaching certain thresholds?

Events can often act as triggers for payments to sponsored athletes, which acts as a hold back on sponsorship fees until closer to the time that a sponsored athlete is scheduled to receive the benefits of the sponsorship arrangement.

This allows for payments and cashflow to occur at a time closer to when the promotional benefits provided by athletes are realized when based on events (e.g. the League of Legends World Championships), rather than dates in the future. In Esports, payments schedules and thresholds are often determined based on the last fixture in a tournament, which provides incentive for an athlete to continue providing benefits to the sponsor until the tournament is over, regardless of their involvement in the last fixture.

For help with your esports sponsorship agreement, whether as a sponsor, or as someone receiving a sponsorship opportunity, or sponsorship generally, please get in contact with us. We are happy to help!

For more information or to set up a minute Discovery Call with one of our entertainment lawyers please feel free to Contact Us.

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Corporate Law: Why, When & How to Incorporate Your Entertainment Business

Mark Edwards — Mon, 21 Nov 2022 15:39:58 +0000

Can an Entertainment Business Incorporate?

Do you ever wonder how to incorporate your entertainment business? Most businesses reach a point when they consider whether to incorporate. This decision on whether or not to incorporate is no different in the entertainment industry. Film producers, music labels, talent agencies, and video game developers are just a few examples of entertainment industry businesses that may eventually decide to contact a corporate lawyer to help them incorporate.

This blog will discuss relevant legal considerations regarding when and how to incorporate your entertainment business.

What are the Reasons to Incorporate your Company

The following are a few advantages of incorporating.

Limited Liability

Corporations are legal entities separate from their owners. As a result, a corporation is responsible for its own debts and other obligations. The liability of the shareholders, directors, officers, and employees of the corporation is limited – with a few exceptions, these individuals cannot be held personally responsible for the debts of the corporation.

Corporate Grants

There are certain industry grants that are only available to incorporated businesses.

Corporate Tax Credits

If you want to access Canadian cultural tax credits, such as are available for films, television series or interactive digital media, the applicant must be incorporated.

Investors

Shares are a convenient and attractive solutions for investors (the shareholder) financing your entertainment business.

Continuous Existence

Private and public corporations live on until they are wound up or dissolved. Other business structures, like a sole proprietorship or partnership of individuals (ie: LLP), are more difficult to continue when the individual owner or partner dies.

Tax Implications

There are a variety of financial tax advantages for corporations. We recommend getting in touch with an accountant for further financial advice on this point.

When is the Best Time to Incorporate your Business?

When is the right time to incorporate your business? Unfortunately, there isn’t a single answer to that question. It will depend on the particular circumstances of your business. For example, for film or television production companies, if you want to access available tax credit programs or other grants, you will want to ensure that you incorporate early in the pre-production stage.

If your business is not required to be incorporated, the decision of when to incorporate is less obvious. As your business grows, a number of things change: risk increases (when to incorporate, to manage and minimize that risk, will depend on your tolerance for that risk): the need for investment capital increases (when to incorporate, to provide a structure for investment, will depend on the capital intensity of your particular business and the availability of other sources such as profit and your own resources); taxation increases (when to incorporate, to minimize tax, will depend on whether you are retaining income in the corporation or paying all of it out to yourself as soon as it’s received).

In addition, incorporating can help to impose structure onto your business – through designated roles and corporate governance (practices and procedures that standardize the decision-making process.

The Process of Incorporating your Business

If you do decide to incorporate, the first question you need to ask is whether you are going to incorporate provincially or federally. One of the main distinctions between the two jurisdictions is that if you incorporate at the provincial level, the registered office of the corporation must be within that province.

A federally incorporated company can have its registered office in any of the provinces or territories. From a corporate governance standpoint, if you choose to incorporate federally, at least 25% of your directors must be Canadian residents. Ontario does not have a similar restriction.

Both Canadian and provincial corporations can be incorporated online without a law firm’s assistance, but a corporate lawyer can add significant value – prior to incorporation, by advising on the choice and availability of the corporate name, and on the use of multiple share classes and their attributes; and after incorporation, by issuing shares, electing directors, appointing officers, passing general and specific operational by-laws and other opening resolutions, setting up the corporate minute book and completing both mandatory and optional filings.

Ontario Incorporation

More information on incorporating within Ontario, can be found here. The basic government fee for registering an Ontario corporation is $300.00 CAD.

Federal Incorporation

More information on incorporating federally, can be found here. The basic government fee for registering a federal corporation is $200.00 CAD.

Who Can Help you With Incorporating your Company?

If you are a business owner and have questions about incorporating your company, we encourage you to speak with Edwards Creative Law or another entertainment lawyer. Our law firm is happy to answer your questions about incorporating and to assist you with the incorporation and post-incorporation processes necessary to incorporate and to transfer your existing business into the new corporation. Read our post about The Meaning and Importance of Shareholders’ Agreements in Canada.

Updated to November 21, 2022

Edwards Creative Law is Canada’s Entertainment Law Boutique, providing legal services to Canadians, and international clients who partner with Canadians, in the Music, Film & Television, Animation, Interactive Digital Media, Game, Publishing and Software industries.

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The Working for Workers Act, 2021, within the Entertainment Industry

Erin Moskal — Fri, 14 Jan 2022 16:00:25 +0000

The Working for Workers Act 2021 – Introduction

On December 2, 2021, Ontario Bill 27: Working for Workers Act, 2021, received Royal Assent and was passed into law. Bill 27 introduces new measures to improve employment standards for workers across the province. Most significantly, Bill 27 prohibits non-compete agreements between employers and employees, except in certain limited circumstances, and requires employer’s with 25 or more workers to have a “Disconnecting from Work” policy. This blog will discuss these key changes with a particular focus on the entertainment industry.

The Prohibition of Non-Compete Agreements

Bill 27 defines a non-compete agreement as “an agreement … between an employer and an employee that prohibits the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer’s business after the employment relationship between the employee and the employer ends.” Non-compete agreements have traditionally been used to stop former employees from starting their own business in competition with, or working for competitors of, their former employers.

The prohibition on non-compete agreements is straightforward and the sole exceptions are non-competition in the context of the sale of a business or in the case of “executives”. Bill 27 defines an executive as “any person who holds the office of chief executive officer, president, chief administrative officer, chief operating officer, chief financial officer, chief information officer, chief legal officer, chief human resources officer or chief corporate development officer, or holds any other chief executive position.” It remains to be seen how courts will interpret who qualifies as an “executive”, but it is likely that an employee’s duties within an organization will be more important than whether that employee’s job title contains the word “Chief”.

Notably, other employee-related restrictive covenants remain enforceable in Ontario, including agreements of non-solicitation (a prohibition on soliciting a former employee’s clients or employees), non-disclosure or confidentiality, and assignments of intellectual property.

The Right to Disconnect

Employers with 25 or more employees are now required to have a “Disconnecting from Work” policy. Bill 27 defines “disconnecting from work” as “not engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages, so as to be free from the performance of work”. Employers with 25 or more employees as of January 1^st of any given year are now required to have a written policy setting out their disconnecting from work policy by March 1 of that year.

The importance of an employee’s right to “disconnect” from work at the end of the workday has gained acceptance, in significant measure due to the impact of COVID-19 on the workplace – in particular the increase in working from home, which has been widely recognized as having blurred the division between work life and home life.

Application to the Entertainment Industry

The prohibition of non-compete agreements and the right to disconnect from work are changes that will undoubtedly affect the entertainment industry. Production companies, animation and game development studios, artistic venues, management companies and labels, to name a few, will need to adjust their employment practices accordingly. On the other hand, truly independent contractors, who have and continue to play a large role in the entertainment industry, and who have always been outside the provisions of the Employment Standards Act, will not be affected by the new rules.

Working for Workers Act 2021 – Conclusion

As with all new legislation, the full impact of Bill 27 will take some time to reveal itself. If you are in the entertainment industry and have questions about how to apply these concepts to your specific circumstances as a worker or as an employer, or how to implement the new rules in your workplace we encourage you to speak with Edwards Creative Law or another entertainment or employment lawyer.

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Updated to January 12, 2022

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What is a Sunset Clause and why you should care?

Erin Moskal — Thu, 23 Dec 2021 20:31:11 +0000

What is a Sunset Clause – Introduction

Have you ever watched the sun go down on the beach? I bet you could actually see it wane into a tiny disc on the horizon, like a golden coin, and then evaporate in a whisper. The sun has officially “set”. Yet, it is not immediately dark. The afterglow often remains for an hour or two, providing some of the sky’s warmest and most dramatic colours. And that’s the end of my legal blog, enjoy your evening (signed, Bob Ross).

Breakdown

But that is not the end of my blog. My point is, that although “a thing” may be technically over, there is sometimes a residual period during which elements of the “now over thing” remain. A sunset clause in a contract is an example of this. A sunset clause provides for a set period of time, after the termination or expiration of a contract, during which one party continues to receive certain benefits (such as a share of revenue) under the contract. Often, sunset clauses are found in agent agreements in the film and television industry or manager agreement in the music world; however, sunset clauses are found in many other contexts as well.

Background

The theory behind sunset clauses is that, even though a contract has ended, a manager or an agent should still be entitled to receive benefits for work done by them during the term of the contract. Without a sunset clause, when a contract ends the artist may continue to benefit from the agent or manager’s work, without compensation to the agent or manager.

For example, a manager works for years to get an artist a big deal, which lands moments after the manager’s contract with the artist ends. The manager, the person responsible for bringing the deal to the artist, may be cut out. A sunset clause protects managers and agents in such a scenario.

What is a Sunset Clause – The time debate

How long should a manager be able to share in their former client’s income? Perhaps, like the light of dusk after the sun has set, it should decline after time. The manager likely has no active responsibilities or obligations to secure the income stream, even if the manager was directly responsible for having created the opportunity.

Leverage

Sunset clauses are not a foregone conclusion in an agreement. Like any provision, a party is only as likely to get the benefit a sunset provision if they have leverage to make the other party agree to it. What could such leverage be? Maybe the agent is a career-maker who greatly increases their clients’ prospects of having a successful career. Maybe the manager has a direct line to the head of A&R at Republic Records. To an artist, the prospect of paying a continuing revenue stream after having been made successful and wealthy may not seem so bad. But even managers who are not in the habit of making their clients career superstars may (and still do) ask for a sunset clause. However, always keep in mind managers need good talent to manage as much as artists need good, smart, connected agents and managers.

We help artists review sunset clauses they are asked to agree to when starting to work with an agent or manager. We also help managers prepare sunset clauses.

What is a Sunset Clause – Conclusion

The big question generally is whether a sunset clause is reasonable? One answer is that “sunset clauses are reasonable so long as they’re reasonable.” Helpful? The point is that not all sunset clauses are the same. There are many different ways a sunset clause can be written, just as there many different factors involved in preparing a sunset clause. Questions to consider when planning a sunset clause include how long the sunset clause will last, the scope of the revenues subject to the sunset clause, the commission percentage throughout the sunset clause term, and whether any specific outcomes must have happened during the term in order to trigger the sunset clause.

If you have received an agreement with a sunset clause, or if you want a client to sign an agreement with one, please let us know how we can help.

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Updated to December 23, 2021

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Starting Your Game Company – Legal Package

Erin Moskal — Fri, 19 Nov 2021 15:01:55 +0000

Author: Mark Edwards, Entertainment Lawyer

Starting Your Game Company – Introduction

Starting your game company can be incredibly rewarding: you have the freedom to decide whom you work with and what you work on. On the other hand, as with starting any business, it also means that you need to think about the business of the business, which can feel overwhelming.

Edwards Creative Law has a legal package to help game companies, new and existing, to formalize their business. We can help you manage the business of the business.

Our package includes the following four elements

1. Incorporation of the business

This service includes incorporation of the business and preparation of the opening resolutions – issuing shares, electing directors, appointing officers, and passing by-laws.

Incorporating a company online simply creates an empty shell. To fill that shell and to make it functional, the initial director(s) need to create shareholders, by issuing shares. Those shareholders then need to elect new directors or re-elect the initial directors, to manage the company. The directors then appoint officers to operate and act on behalf of the company. Together, the shareholders and directors need to pass the by-laws that set out the detailed processes by which the company will be governed, managed and operated.

2. Intellectual property transfer or license agreement

These agreements are to ensure your IP is transferred or licensed to the business, which is where you need it to be. View related blog

3. Employment and independent contractor (freelancer) agreements

These agreements are for each employee and freelancer. View related blog.

From the inception of the game idea to the final delivered game, your company must gather IP rights from everyone involved. This ensures that your company has a complete chain of title — an unbroken series of documents that prove that your company owns or controls all the IP rights in the game.

A complete chain of title is important to your potential business partners. From investors to distributors, your partners want to know that all rights have been accounted for. This provides certainty. Neither you nor your partners want someone coming out of the woodwork claiming they own rights that were never assigned and demanding more money for their contributions to your game.

In both Canada and the US, IP created by employees while on the job is owned by the employer, but IP created by freelancers is not. Ensuring that your game company owns the work of its freelancers is critical. In addition to the legal rights to the IP in your game, you need a waiver of moral rights (this applies to both employees and freelancers). Canadian law recognizes two types of moral rights of creators in their original works: a right of attribution (to be associated with the work by name or pseudonym, or to remain anonymous); and a right to the integrity of the work (to prevent changes to or uses of the work that would harm the reputation of its creator). Moral rights cannot be assigned but can be “waived” (i.e., a promise that they will not be enforced) in whole or in part. An assignment of intellectual property does not on its own establish a waiver of the creator’s moral rights, and without a waiver your game company may be prevented from making any changes to their IP – which is critical when developing a game.

4. Shareholders’ Agreement

Unless you are the only shareholder, or you and the other “owners” of the business are completely happy with the “bare-bones” provisions of the business corporations act under which the company is incorporated, you will want a Shareholders’ Agreement. A Shareholders’ Agreement defines who the directors are and which of the shareholders and/or directors have authority to make which decisions; deals with changes of shareholders or their situations; defines how shares can be sold or transferred; and defines a process for resolving disputes, without destroying the company.

If you have any questions or need any guidance with the legal issues involved in starting a game company, please give us a call. We are happy to help!

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Updated to November 18,2021

Assigning Concept Rights in Canada – Ask An Entertainment Lawyer

inkline_admin — Sat, 02 Oct 2021 05:51:16 +0000

Author: Mark Edwards, Entertainment Lawyer

Assigning Concept Rights in Canada – Introduction

Recently, I have been asked about assigning concept rights to a single purpose production company (“SPPC”) – in the first case, to assign the rights, in the second, to unwind an assignment that went far beyond what was needed. Incorporating an SPPC is standard practice when producing a film or television series or a significant game. When it’s created, an SPPC is an empty shell. To produce the film, show, series or game the SPPC must have rights to the concept, rights that typically come from your production company (“ParentCo”).

What is a Concept?

The first thing to remember is that to own a concept is to own a bundle of rights. These rights are infinitely divisible – they can be specific to types of use, a media platform, a creative medium, a product, a language, a time period, a geographic region, etc. Second, an SPPC is almost always a unique combination of elements – a very particular mix of owners, employees/contractors, customers and creditors.

Granting Rights

Unless there is a very good reason to do so, ParentCo should only grant the SPPC the very specific rights in the concept that it requires to achieve its limited purpose; for example, to finance, produce and exploit the first season of a television series. You might want the SPPC you incorporate for season two to be owned by different shareholders, to be staffed by different people, to be financed by different sources. Getting the rights for season two, if they have been assigned to the SPPC for season one can be a very significant problem.

Licensing Considerations

As well, in every rights assignment there should be a licence back, to ParentCo, of the derivative IP created by the SPPC. In every production, almost by definition, there will be elements created that were not in the original concept: new characters, settings, music, storylines, etc. While the SPPC can’t use those elements for anything other than its limit purpose (season one), neither can ParentCo, which can be a real problem assuming that you want to include those elements in season two.

Assigning Concept Rights in Canada – Conclusion

I like to think of ParentCo as the quarterback – controlling and directing the exploitation of the concept, deciding for each particular product which legal entity is going to be used and exactly how broad its rights need to be to achieve its particular purpose. Some rights, like merchandising, ParentCo might wish to retain, so that it can coordinate an overall strategy and grant merchandizing licenses that combine all of the assets from multiple seasons and multiple SPPCs.

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Updated to November10,2021

Esports: Opportunities and Legal Considerations for Creators

Erin Moskal — Fri, 17 Sep 2021 14:30:29 +0000

Esports: Opportunities and Legal Considerations for Creators – Introduction

Esports is an exciting, evolving and lucrative field of entertainment. On pace to outstrip the film and television industry in terms of sheer economic activity, Esports attracts an audience that is only eclipsed by the FIFA World Cup and the NFL Superbowl.

Esports is a term used to describe competitive video game playing, often taking the form of organized competitions involving professional gamers, massive prizes and huge audiences. Esports is not limited to sports games (e.g. FIFA, MLB The Show) but may encompass any video game. Popular Esports franchises include League of Legends and Counter-Strike. Esports are usually viewed over online streaming platforms, particularly YouTube and Twitch. The immense popularity and rapid growth of Esports has led to many opportunities for creators, as well as novel legal issues.

Direct Opportunities for Esports creators

Esports has led to obvious and direct opportunities for video game creators. The traditional model for video game creators to make their fortune is to make a video game, have it published by a reputable publisher, and reap untold rewards through the sale of the game; however, this route is not at all easy or assured. It also ignores that the Esports industry is mature enough to have incumbent publishers and game titles that already have massive audiences, e.g. Epic Games, the developer/publisher that brought us Fortnite and Rocket League (note, I play in the Rocket League but will not be live-streaming my games on Twitch anytime soon).

Ancillary Opportunities for Esports creators

In addition to the direct opportunities for video game creators, the rise of Esports has resulted in many ancillary opportunities for creative industries generally that were not previously common in the video game industry. These opportunities include sponsorship, music licensing, endorsement and brand partnerships. Esports, like other platforms, can leverage its huge audience into advertising and promotional dollars. This can take the form of sponsorship deals with Esports athletes (e.g. Lol star Faker and his team are part of a multi-million dollar deal with Nike for apparel and the creation of a training facility), team naming rights (Shopify Rebellion) and even branded brick-and-mortar “stadiums” where Esports are played.

The ancillary opportunities in the Esports industry are many, something of which I have first-hand knowledge.

I was lucky enough to serve as counsel for Universal Music Canada in a novel, innovative partnership and music licensing deal with OverActive Media (OAM), a Toronto-based company that owns a number of Esports team franchises including the Toronto Defiant and the Toronto Ultra. OAM plans to build a new, self-funded entertainment facility located on the Exhibition grounds in Toronto.

The deal with Universal Music Canada included the licensing of walk-up music for athletes, in-platform promotion of Universal Music artists and initiatives, and in-person events. I also acted as in-house counsel for Universal Music Canada on a partnership deal with Luminosity Gaming that included music and promotion of Universal artists on the platform.

Legal Considerations for Esports

Many of the legal considerations around the ancillary opportunities in Esports are the same as those that exist for “real” sports. For every sponsorship, music placement, brand partnership, or Esports based promotional event there are numerous considerations to be negotiated by the parties, including payment terms, benefits, responsibilities, and ownership of rights. Ideally, these terms are recorded in a contract signed by the parties. The parties must also consider what may legally be delivered to sponsors and whether content will infringe the rights of third-parties, including copyright, trademark rights, personality rights and the right not to be defamed.

Also, where there are sports of any kind, there is sports betting. While a fair amount of this will happen illegally, betting platforms and regulators from various countries have already begun to involve themselves in the activity and associated revenue of legal Esports gambling. In May 2018, the US Supreme Court ruled that federal government cannot limit states from regulating sports betting, opening the doors for legal Esports gambling to a massive audience. Countries where Esports gambling is currently legal include Canada, the UK and the United States.

Esports: Opportunities and Legal Considerations for Creators – Conclusion

Esports has taken the world by storm. How the law will adapt to this rapidly evolving field of entertainment remains to be seen, but evolve it will. If you have any questions or need any guidance with legal issues around Esports or endeavours related to Esports, please give us a call. We are happy to help!

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Updated to September 16,2021

Author: Burt Gidaro, Entertainment Lawyer

Edwards Creative Law is Canada’s Entertainment Law Boutique, providing legal services to Canadians, and international clients who partner with Canadians, in the Music, Film & Television, Animation, Interactive Digital Media, Game, Publishing and Software industries.
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Gaming – Edwards Creative Law

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New Year’s Resolution #1: Don’t Rush

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New Year’s Resolution #2: Know Your Partners

New Year’s Resolution #3: Discuss Key Terms

New Year’s Resolution #4: Agree on Terms

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