2008, the front pages of newspapers and magazines from coast to coast in Canada
warned of an imminent danger. Canadians
were up in arms and the airwaves reflected their worry and concern. An environmental threat? A natural disaster?
A business crisis? No, the threat Canada faced was the potential loss of a
jingle, a theme song for Canada's hockey broadcast, a song so well-known and so
loved by Canadians that it is referred to as Canada's second national anthem.
story involving Canada and its national pastime, hockey, tempers can be
expected to run high. But in this case,
the threat to a Canadian icon can teach a cautionary tale to businesses in
every arena about the proper management and evaluation of intellectual property
interests, the necessity of recognizing the true value of intangible assets,
and the importance of anticipating and managing marketing changes that may
effect the value of copyright and other intellectual property interests. Finally, as in many business stories, the
management of relationships was a key element to this cautionary tale.
revolves around two Canadian power players, the Canadian Broadcasting
Corporation, a Crown corporation which is a public broadcaster in Canada, and
its television program entitled Hockey
Night in Canada, which has itself been
a national institution since 1952, remaining the most popular weekly sports
program in Canada, averaging more than one million viewers every Saturday
Claman, a jingle writer, wrote a song in 1968 and entered into a competition
held by an advertising company which was charged with looking for some music to
become the theme song, for a couple of years at most, for Hockey
Night in Canada. When the jingle was originally written in
1968, none of the sponsors for the show liked the song. However, it was chosen out of a group of
four songs which were submitted in the competition. With time, however, the jingle became one of Canada's most
writing the jingle, Ms. Claman allowed the song to be used for almost 25 years
with no license fees being paid and no license agreement being entered
into. Had the CBC used its superior
resources during that quarter of a century, it could easily have tied up the
copyright rights during that period of time, particularly had it realized the
increasing value represented by the intangible asset of the copyright in the
song. Ms. Claman finally began
receiving royalties in the early 1990's after her accountant pointed out to her
that she was missing out on potential income.
She entered into a licensing arrangement with the CBC which eventually
paid her $500.00 every time the song was used by the CBC in association with
the broadcasting of hockey games in Canada, the only right which was given to
the CBC under the arrangement.
taking a license in copyright should always be aware of the value of the
copyright and should consider the risks in paying for only a narrow use license
agreement. Had the CBC recognized the
potential for growth in non-traditional markets, they may have been able to
negotiate a broader licensing agreement to capitalize on those opportunities.
of the copyright in the jingle was also significantly changed by market forces. Ms. Claman's licensing agent licensed the
tune to Bell Canada to be used for cell phone ringtones. Since that time, the song has consistently
been in the top five of all downloaded ringtones in Canada. However, rather than recognizing and
obtaining the rights to such uses, the CBC attempted to make Bell Canada
guarantee hundreds of thousands of dollars worth of advertising to the CBC in
return for its release of its potential rights to the ringtone. This alleged attempted interference with the
copyright holder with the licensing of the song in other areas is but one of
the grounds relied upon by Ms. Claman in a lawsuit commenced in 2004 against
the CBC. The ringtones issue was
clearly the last straw in a relationship which had been characterized by a
seeming indifference on the part of the licensee.
did the Hockey Night in Canada broadcast use the song on an unlicensed basis
from 1970 to 1995, but when the license agreement terminated in 2002, the CBC
continued to use the song without any license in place. The CBC also allegedly substantially altered
the musical arrangement of the song without any appropriate approval and in
breach of the moral rights of the copyright holder. The lawsuit also alleges that the License Agreement had been breached,
since the broadcaster used the tune too often, since the license agreement
stipulated that the song could only be used for Hockey Night in
Canada broadcasts within
Canada, but that the CBC had used the music on games shown in other countries,
and for other programming.
relationship was obviously coloured by this litigation, which had been allowed
to remain unresolved since 2004. This
strain on the relationship between the two parties was an ill portent of what
was to come. The CBC and Ms. Claman's
agents entered into over thirteen months of negotiations, but failed to reach a
deal for an extension of the License Agreement.
CBC gave up on negotiations with Ms. Claman's licensing company, CBC executives
announced that they would have a new competition to come up with a new theme
song for Hockey
Canada broadcasts. Immediately, 1,500 calls and
emails were received by the CBC from angry viewers. It was at this juncture that hockey fans, journalists, and
ordinary Canadians began to make their views heard, exemplified by the
following popular viewpoint: "It should be saved, it's part of our
heritage". In a dramatic shift, the
CBC then announced that they wished to re-open talks with Ms. Claman with the
help of a well-known sports lawyer acting as a mediator. However, by that time it was too late.
On the CBC's
end, the intrinsic value of the song was never truly realized until it was too
late. Scott Moore, the executive
director of CBC sports is quoted as saying "What Hockey Night in
Canada was really about is hockey, everything else is just window
dressing". This comment highlights
the fact that the CBC did not view those few bars of music as carrying much
goodwill or intrinsic value. The CBC
only belatedly reconsidered the value of the copyright in the song.
overnight, with the announcement by the CBC that it had failed to reach an
agreement with Ms. Claman and her agents, CBC's chief rival, the CTV, announced
that it had purchased the rights to the song.
extremely telling about the importance of the management of the relationship
between a copyright holder and a licensee is the following statement made by
Ms. Claman following the sale of the copyright in the song to CTV. "Throughout our negotiations, CTV
displayed a tremendous amount of respect for my family and the song. "The
Hockey Theme" means so much to Canadians, and we know it's in good hands
acquisition, CTV announced that beginning in the fall of 2008 the song will now
be heard on NHL broadcasts broadcast by CTV network, and that the song will
also be used as part of its hockey coverage at the 2010 Olympic Winter Games.
remains to be seen whether Hockey Night
in Canada will remain the Canadian institution which it has become and the
new theme song will eventually become just as popular as the original, or
whether Canadians will follow Canada's second national anthem over to CTV
hockey broadcasts, this incident will surely go down in the annals of Canadian
sports history. Equally importantly,
the incident series as a reminder of the care which must be taken by businesses
in evaluating the value of their intangible assets, ensuring that they own
outright any rights which they can own, and that with respect to rights which
must be licensed from third parties, ensuring that those rights are securely
licensed for all possible uses, and that the relationship between the licensor
and the licensee is carefully managed and evaluated at all times.
- Nancy A. Miller
Fogler, Rubinoff LLP