Always acquire the proper permission before you eat at McD****** or drink a C***.
by Doran Chandler

It happens more often than you might expect: a producer completes a film, locks picture, makes a sale, and then drops by our law office to inquire about “clearing” the film for Errors & Omissions insurance coverage. In reviewing the film, we note that the producer filmed copyrighted and trademarked material, but failed to get the necessary permission to include it in the film.

E&O insurance policies insure against claims arising from accidentally infringing a copyright or trademark, invading someone’s privacy or otherwise getting tripped up on someone else’s rights. In order to qualify for E&O coverage, the film in question must be fully cleared and the producer must acquire all necessary permissions from third parties whose rights might otherwise be infringed. If a film includes material that potentially infringes a third party’s copyright and permission has not been acquired, there are a number of options to consider.

First, the film could be edited to remove the offending material. This is only a viable option if time, finances and/or creative willingness permit. Second, there may be an exception allowing the inclusion of certain copyrighted material in the film without permission.

Likely the most popular excuse for copyright infringements is the concept of “fair use”. Although referred to regularly in industry reference materials available here in Canada, fair use is a US principle based on the belief that it is not “fair” to find every copying to be a violation of copyright law if such copying was for certain purposes, including criticism or review. (For example, the concept of “parody” falls under fair use in the US and has provided many a filmmaker with substantial sources of otherwise protected material. Thank you Mel Brooks and Mike Myers!)
Fair use does not exist in Canada and is often used interchangeably, and often confusingly, with “fair dealing”, the concept found in the Canadian Copyright Act. Other than in very clear-cut cases, extreme caution must be used in relying on fair dealing, which is a very limited defense as the use of the material must be for “private study, research, criticism, review or newspaper summary”. Unfortunately, because there are no hard and fast rules available, it is impossible to define what is and is not fair dealing.

Other than fair dealing, in Canada, the concept of “incidental inclusion” may provide another possible exception to copyright infringement. If the use of copyrighted material is very minor and is incidentally and not deliberately included, (for example, a pre-existing credit card door sticker at a retail location), it is likely that the use will fall within incidental inclusion and will not be considered an infringement. It can become prohibitively expensive and time consuming to clear every protected item in a film, no matter how small the use.

If E&O insurance is required, and if none of the above options is feasible, in some cases it may be possible to “exclude” the offending material from the E&O insurance policy and effectively assume the risk yourself. (Be aware, however, that these types of exclusions may not be acceptable to broadcasters and distributors.)

The bottom line? Always, always, always ensure that you acquire all necessary permission to include any protected material in your film before you start shooting.