(Simon Chester is the research partner and a member of the KNOWlaw Group of the Toronto law firm McMillan Binch. This article was prepared with the assistance of lauralee bielert.)

It’s time to take copyright seriously. Freelance writers, photographers and illustrators delivered this message loud and clear with the launch last month of a $100 million class action suit against Thomson Corp. Heather Robertson, a prize-winning non-fiction author, launched the suit on behalf of all Canadian freelancers.

Robertson, whose book Driving Force won the 1996 Canadian Business Book Award, has earned a living as a full-time freelance writer for the last 25 years. The suit claims Thomson placed freelance materials in electronic databases without payment or authorization.

For producers of films or television programs, the Thomson suit is a sharp reminder that anytime they have a freelancer do any piece of work, they should make sure that there is a clear written agreement in place setting out the media in which the producer can make use of the freelancer’s work.

Thomson’s troubles

The Globe and Mail launched its Infoglobe electronic database in 1978, but it’s only recently that freelance writers have begun to demand compensation for the electronic publication of their work.

For many years, the freelance/publisher relationship was quite informal. According to general industry standards, a writer owned an article and assigned first North American publication rights to the acquiring newspaper or magazine, retaining the right to resell the story to other publications.

Until recently, newspapers didn’t even bother with assignment letters let alone formal contracts, and electronic rights simply weren’t an issue.

But the new technologies have, over the last few years, raised tough questions about risk – and reward – on the electronic highway. The issue has been most pointedly raised, not by salaried journalists, but by freelancers. Freelancers have expressed surprise and outrage in finding that their work has been loaded on electronic databases – or even on the Internet – without their permission.

What brought the issue to a head, earlier this year, was Thomson’s decision to request formal legal waivers from writers, illustrators and photographers. Thomson was not alone: Southam, Telemedia and Maclean Hunter also asked contributors to sign over the rights to their works.

In some cases, the legal language in the agreements was very broad. For instance, the Financial Post contract asked for a ‘non-exclusive, perpetual, worldwide right to publish, use, sell or resell the Work in any manner, form or media and by any means or technology now used or hereafter used.’

Other publications asked freelancers to waive their ‘moral rights’ – that is the right of creators to protect the integrity of their work. This waiver (standard in the film and television industries) alarmed many of the freelancers, given the ease with which text, sound and images can be transmitted and stored in easily manipulable bits and bytes.

What angered creators most, though, was that they were asked to sign over their rights without any additional compensation. The Periodical Writers Association of Canada responded to this by enlisting the help of other writers’ organizations. The end result was the suit launched against Thomson in which the plaintiffs are seeking damages all the way back to 1979.

Who owns a writer’s work?

Legally, the dispute centers around the provisions of the Copyright Act which make the individual who creates a work the first owner of the copyright in that work. This means that freelancers retain all rights to their works except those expressly assigned to the publisher. In other words, publishers cannot appropriate freelance works for use in other contexts.

Employees, on the other hand, fall under an exception to the general rule: the ’employer-employee’ exception, which provides that the copyright of any works created by an employee in the course of employment belongs to the employer.

The situation is further complicated by an ‘exception to the exception’ – employees who work for newspapers and magazines have the right to restrain the publication of their works other than as part of newspapers or periodicals. In other words, newspapers and magazines may not have the right to use their employees’ work in the electronic media without the employees’ permission.

There’s a lesson here. Producers and broadcasters using freelance or employed writers should review their practices to make sure they have all the rights they need or may want in the future.

U.S. developments

While copyright differs between Canada and the u.s., similar battles are taking place in both countries.

The highest profile fight is being led by the president of the National Writers Union, John Tasini. In 1993, Tasini and 11 other writers launched a suit against the New York Times and four other news and database companies.

It is estimated that if Tasini wins his case, the liabilities could go into the millions of dollars. Three writers unions have already boycotted the New York Times over its contractual demands relating to electronic rights. One magazine – Harper’s – has already agreed to split revenues 50/50 from online and cd-rom products.

Rethinking old practices is problematic. Even if publishers and other producers of product for the electronic media were willing to compensate writers for this use, there are huge practical issues to consider.

One is how to track the use and reproduction of works for the purposes of enforcement and compensation. Tracking has been a particular problem in the context of electronic databases. Publishers argue that it is difficult, if not impossible, to track use and accurately determine the amount of revenue owing to individual contributors.

Creators have responded with a number of practical solutions to get around the problems of determining appropriate levels of compensation. The National Writers Union in the u.s., for example, has set up a publication rights clearinghouse modeled after long-standing music organizations such as ascap. Photographers in the u.s. have set up a similar clearinghouse.

Other writers’ groups are proposing a simple flat fee system. Computer buffs are looking at a way of electronically tagging their works so that user access through electronic databases can be tracked automatically.

Robertson’s case has moved electronic copyright issues to center stage. Whether her case even gets to court is an open question. With $100 million at stake, we need a serious debate on how creators, publishers and other producers should profit from the electronic highway.

(This article contains general comments only. It is not intended to be exhaustive and should not be considered as advice on any particular situation.)