The curious case of moral rights in Canada

By Matthew Literovich

Not everything we do in the venture space relates to negotiating and drafting investment documents. Sometimes we assist with other legal documents that have a corporate aspect to them. Independent contractor agreements and intellectual property assignment agreements are two of these types of documents that are “corporate-like”. We consider them “corporate-like” because although they interact with other areas of law, our team deals with them on a regular basis.

One question I frequently get from American investors, however, is “what’s this business about moral rights?” Moral rights are not unique to Canada. I’ve seen them in Israeli documents, and I know they are common in France and Germany. They do theoretically exist in the US, but their application is so narrow that they rarely, if ever, come up in a corporate context.

So, in order to answer that question of our hypothetical American investor, we need to discuss the Canada goose. To you, the Canada goose may be a majestic creature of national pride or an optional skin for one of this year’s surprise hit video games. In any event, I imagine it’s not where you expected this blog post to be going. Many years ago, just a few blocks from Dentons’ office, a major shopping centre in downtown Toronto purchased a piece of sculpture art featuring a flock of Canada geese that dangled in the atrium above the shoppers in the mall. Come Christmas time, the owners of the shopping centre decided to put festive red ribbons around the necks of the geese in the sculpted flock. “Not so,” said the original creator of the geese. He alleged that he had sold the geese to the owners of the shopping centre, but he hadn’t given them permission to go mucking around with his vision for how they are to be displayed. A court agreed and required the owners of the shopping centre to take the ribbons down, and the Canadian concept of moral rights was born.

In short, moral rights grant the creator of an artistic work the right not to have the integrity of the work impugned. These rights cannot be assigned or sold, so when you buy the intellectual property behind someone’s work, you’re not actually getting it free and clear of all obligations. Like with the geese in the anecdote above, you can’t change or modify the work in a manner that is distressing to the creator. For a company that wants all of its intellectual property owned without an encumbrance, this is an issue.

Fortunately, lawyers are a creative bunch and realized that while you cannot assign moral rights, you can do the next best thing—waive them. By waiving them, you are basically promising not to enforce them against the owner. So now all of our intellectual property agreements have this additional language in them, which essentially puts everyone back into the same place as if moral rights had never been created. This means, by my rough estimate, the total sum of the effect of this nearly 40-year-old ruling has been to vex some American investors; make lawyers across Canada ensure a waiver of moral rights is included in every intellectual property agreement we review for you; and allow me to write a blog post that references the Untitled Goose Game.

To be clear, I’m not complaining. The owners of the shopping centre may take a different view, however. Legend has it that after the ruling against them, the old shopping centre owners intentionally skimped on the maintenance budget for the geese out of spite for the decision. Moral rights may prevent you from putting ribbons on your geese, but they certainly don’t determine how often you have to dust them.

Special thanks to Daniela Acevado who assisted in the initial review.