Authorship and ownership in copyright law in Canada is an important and complex topic which lies at the nexus between Canada's Copyright Act,Copyright Act, RS 1985, c C-42 an important body of case law, and a number of compelling policy motives. Analysis of authorship and ownership of copyrightable works in Canada can proceed by examination of the rules determining the initial allocation of copyrights, rules governing subsequent changes in ownership, and finally rules governing complex works such as compilations.
Rules determining initial allocation of copyrights Canadian copyright law sets out rules which determine who is to be the first owner of the copyright for a new copyright-able work. The rules cover different groups of people such as the authors of the work, employees who create works in the course of their employment, independent contractors who create works under contracts for services, and academics. It is helpful to think of the rules which set out in initial allocation of copyright as 'default' rules because the whole or a portion of the 'ownership' of the copyright may always be transferred to a different person in a contract of sale.
The first owner of the copyright: author Section 13(1) of Canada's Copyright Act states that "[s]ubject to this Act, the author of a work shall be the first owner of the copyright therein."Copyright Act, RS 1985, c C-42, s 13(1) The courts have issued a number of decisions which provide some definition to the concept of who is an author according to Canada's Copyright Act. Two helpful decisions regarding the matter of who is an author are Gould Estate v. Stoddart Publishing Co. Ltd. and Donoghue v. Allied Newspapers Ltd.Donoghue v. Allied Newspapers Ltd, 3 All ER 503
Gould Estate and Donoghue cases Gould Estate and Donoghue are two cases which help to define what an author is in the terms of the Copyright Act by providing examples of persons who are not authors. It has been stated that "[c]opyright exists in the expression of ideas or information, not in the information of ideas themselves."
In Gould Estate, the Canadian pianist Glenn Gould participates in a number of interviews with a freelance writer, John Carroll, who is gathering material for an article about Gould. Without the information from Glenn Gould to John Carroll, there would be no material for the magazine story. Nevertheless, it is Carroll who writes all of the ideas down into a concrete expression. The case makes it clear that the author is not the person who invents the ideas but is rather the person who fixes them into a concrete expression.
Donoghue is a very similar case on its facts and in its result. Mr. Donoghue was an ex-jockey who is under contract with Allied Newspapers to tell stories about his days racing horses so that the stories may be written down and printed in the newspaper. Although the column when published holds Donoghue out to be the author, the court decided that all of the writing was done by a newspaper staff member. As in Glenn Gould, the person who relates the story or the idea was held not to be the author because they did not fix the story into a concrete form and thereby transform it from an idea to an expression. The notion of fixation at play here is derived from Canadian Admiral Corp. v. Rediffusion Inc.Canadian Admiral Corp. v. Rediffusion Inc., 14 Fox Pat. C. 114, Ex. C.R. 382, 20 C.P.R. 75, 1954 CarswellNat 5
Gould Estate and Donaghue make it clear that fixation is a necessary condition for authorship, but they do not hold that fixation is a sufficient condition for authorship. So much is clear in Donoghue when Farwell J states that [I]f an author employs a shorthand writer to take down a story which the author is composing, word for word, in shorthand, and the shorthand writer then transcribes it, and the author then has it published, the author and not the shorthand writer is the owner of the copyright. A mere amanuensis does not, by taking down word for word the language of the author, become in any sense the owner of the copyright.
This qualification of the rule of fixation is supported by the facts of Donaghue because the court comments that "I doubt very much whether [Mr. Donaghue] would, unaided, find it easy to write a series of articles for any newspaper at all." This comment by the court reasonably permits the reader to conclude that in the opinion of the court, all of the skill and judgement in the expression of the article derived from the journalist. Consequently, the journalist was more than a mere scribe.
In summary, there is case law which provides that an author in the meaning of section 13(1) of Canada's Copyright Act must fix the work into a semi permanent form, but cannot be a mere amanuensis and must provide the originality and the skill and judgement of that expression.
Historical Exceptions to section 13(1): Section 13(2) Section 13(2) of Canada's Copyright Act relates to the copyright in engravings, photographs, and portraits. A past version of the Copyright Act in section 13(2) assigns the copyright in engravings, photographs, and portraits not to the photographer or author but to the purchaser who provided valuable consideration in exchange for the work.Copyright Act, RS 1985, c C-42, s 13(2) In other words, a wedding photographer hired to take pictures at a wedding, will not own the photos rather than the client.
The current government of Canada is presenting a new Bill, Bill C-11, which will legislate a new version of the copyright act in which section 13(2) will vanish. (Bill C-11 was passed and received Royal Assent on June 29, 2012.) The effect of this legislative act will be that the rule for first ownership of copyright in photographs, portraits, and engravings will revert to the general rule in section 13(1). Consequently, it will be the wedding photographer and not the client who will be the first owner of the copyright. If the client wishes to own the copyright in the wedding photos, the client will have to buy the copyright from the photographer in contract.
New legislation: section 32.2(f) This modification of the Copyright Act may be of concern to purchasers of photographs who may worry that they will no longer be able to reproduce and share their photographs, or at least will have to incur some transaction cost in bargaining for permission to reproduce or purchase of the copyright. Bill C-11 does foresee this difficulty and provides some remedy in section 32.2(f).Parliament, Bill C-11, 1st Session, 41st Parliament, 60 Elizabeth II, 2011 (14 October 2011) online: <http://www.parl.gc.ca/HousePublications/Publication.aspx?Language=E&Mode=1&DocId=5144516&File=36> Section 32.2(f) will provide that it is not an infringement of copyright to use a photo or portrait for non-commercial purposes if you commissioned the photograph or portrait for valuable consideration. This provision is clearly intended to provide the purchasers of the wedding photos with the ability to enjoy the photos they bought and to share them. However, if a commercial purchaser wished to make copies, or if a non-commercial client wishes to own the copyright, they will need to bargain with the author because section 32.2(f) will not apply and section 13(1)will give first ownership to the author and the section 13(2) exception will be eliminated.
Section 13(2) and the Coase theorem: general overview The elimination of section 13(2) provides an opportunity to apply an economic analysis to the allocation of the initial copyright. For this purpose, it is helpful to conduct analysis along the lines of the Coase theorem. Ronald Coase theorized that when transaction costs are very low, the initial allocation of rights is not important from an efficiency standpoint because those persons who know how to put a resource to use in the most productive way will simply purchase the right or the resource from the person who has it because the person who knows how to put a resource to use in the most productive way will be willing to pay more than any other person in order to purchase this right.
The corollary of this theorem is that when transaction costs are not very low, it is important that the first allocation of the copyright be to the person who can make the most productive use of it. Otherwise, the person who knows how to put a resource to use in the most productive way will probably be deterred by the high transaction costs from purchasing that right. This logic may apply to rights such as copyright.
An analysis in terms of Coase's theorem might determine that the rule from section 13(2) is more efficient than the rule in section 13(1) when it comes to products such as wedding photos because it is likely that people who purchase wedding photos will want to make copies. If the copyright is vested in the photographer, then the client would have to ask for permission each time they wanted to copy one of the photos or give a photo or a copy to another person. Each of these requests would create a transaction cost which would decrease the efficiency of exchange and possibly make it more difficult for the person who places the greatest value on the photos to control the copyright. Section 32.2(f) can play an important role in reducing these transaction costs.
The Coase theorem applied to section 13(2): Asymmetry of information There is also a second reason why section 13(2) would be more efficient than section 13(1) for items such as wedding photos. This reason is that there is probably asymmetry of information between the photographer and the client, meaning that the photographer is probably aware of the copyright rules while the client is probably not. Under the section 13(2) rule, because the client is initially vested with copyright, the photographer has to ask to buy the copyright from the client if the photographer wants the copyright. In the course of the negotiation, the client would become informed about the law. In this, section 13(2) is efficient in that it creates an incentive for more informed parties to share that information with less informed parties. As there is greater symmetry of information between the parties, transaction costs are less and bargaining is easier. However, if the photographer is the first owner of the copyright, he has no need to ask his client about purchase of the copyright and consequently it is unlikely that the client will learn about the copyright on the photographs.
Exceptions to section 13(1): Section 13(3) Section 13(3) of the Copyright Act addresses the subject of work made in the course of employment. In summary, the provision states that if a given copyrightable work was made in the course of employment, the first owner of the copyright is not the author of the work but is instead the employer in question unless there was an agreement to the contrary. There are many exceptions to this general rule such as exceptions for freelancers, journalists, and academics.
Section 13(3) and the Coase Theorem It is more efficient for the employer to have the copyright ownership of the work because the employer is probably better organized to put that work to the most productive use. Consequently, even if the default rule did not give the copyright ownership to the employer, the employment contract would probably provide that the employer has the copyright.
Freelancer's exception The exclusion of the work authored by freelancers from the rule in section 13(3) is not so much an exception from the rule as an application of the rule, because freelancers are not deemed to be employees under contracts of service. Consequently, the effects of section 13(3), which apply only to works authored by employees under contracts of service, would not apply to freelancers and section 13(1) will apply normally instead.