01 April 2012

Image Rights Laws to be Introduced in Guernsey

“Image is everything” - Andre Agassi once famously declared in an advert for camera brand, Canon. Back in the 80s, Agassi, with his flamboyant style of play, long pony tail and eccentric shirts was a maverick, the epitome of anti-establishment and with this simple endorsement the rebellious Agassi was widely credited with reviving interest in Canon’s commercial image as well.

Background

Two decades on, and although fashion tastes may have changed, this tag line has lost none of its relevance. Image is big business. Famous sports personalities, celebrities, entertainers and sports clubs, such as Manchester United and Liverpool F.C., derive a significant portion of their total income each year from sponsorships and endorsements. In fact, many modern celebrities earn more from this exploitation of their image rights than from the “performance” fees in the activity which initially brought them to general notice. According to the Sunday Times’ Rich List for 2011, David Beckham’s estimated net worth for 2010/2011 was approximately £135 million, of which a staggering 80% is likely to be attributable to sponsorship and other endorsements. Protecting a celebrity’s image is therefore crucial in order to ensure that third parties are not able to exploit it without authorisation. It is therefore interesting to note that the law in this area is still relatively under-developed compared to other traditional areas of intellectual property rights such as copyright and trademarks.

Although the concept of “image rights” – that is, the right of a person to protect the use of an individual’s name, image or likeness or other distinctive aspect of their personality – is considered by many to be a 21st century phenomenon, in the United Kingdom the right to protect a person’s “image” can be traced back to the mid 1800’s, when Prince Albert issued proceedings against publisher William Strange for publishing a portrait of his family without his consent. Prince Albert won the case by successfully arguing a breach of confidence.

Fast forward to 1929 and image protection became a key point in the case of Cyril Tolley, an English amateur golf champion, who raised objections against a company for using a caricature of his image, without his consent, to promote its brand. Tolley’s primary concern was that such a use of his image threatened the loss of his amateur status as a golfer on the basis that the public might perceive Tolley, through the use of his image, to be receiving professional fees. This concern was felt to be justified by the Court, who prohibited the further publication of the adverts by applying the common law doctrine of passing off.

Although the Prince Albert and Tolley cases were successful in the absence of specific image rights legislation, other claims have not been so successful. For example, in 1999, the estate of Elvis Presley alleged trade mark infringement against a company who used the term “Elvisly Yours” to promote its products. However, the UK Court of Appeal determined that as Elvis Presley’s estate could not demonstrate a causal link between Elvis Presley, the brand, and the goods which the trading company sold, it was unlikely that consumers would be misled into believing that the goods were endorsed or licensed by the estate. The claim failed. The Spice Girls were also equally unsuccessful in their action against Aprilia, the manufacturer of motor cycles and scooters, for displaying their images on Aprilia scooters without the group’s authorisation. The action was determined by applying the law of misrepresentation and, ultimately, failed.

Although English law has no law of privacy as such, some success in protection of celebrity image has been achieved by reliance on the right to respect for privacy enshrined in human rights legislation and breach of confidence. There are several well-known cases in this area, involving celebrities such as Naomi Campbell, Michael and Catherine Douglas and Max Mosley. Naomi Campbell sued the Daily Mirror when the Mirror published a photograph of her leaving a Narcotics Anonymous meeting. The Mirror lost the case, which was argued on the basis that publication of the photograph represented an invasion of Ms Campbell’s right to privacy and a breach of confidentiality. In the litigation involving Michael and Catherine Douglas, Hello printed photographs of their wedding. Mr and Mrs Douglas had sold exclusive rights to the photographs to OK! Magazine and gone to some length to prevent guests from using cameras. The claim succeeded on the basis that the photographs were private and confidential. However, the courts involved were careful to note the need to respect the fundamental principle of freedom of the press. As a result of these competing principles it is fair to say that - although helpful - reliance on breach of confidence or privacy offers limited protection of images.

Accordingly, English Courts have, so far, failed to expressly recognise character or image rights as such or a proprietary right of publicity and whilst there is currently some indirect protection for images at common law (through the laws of copyright, defamation, breach of confidence and passing off) the current situation is far from comprehensive or satisfactory.

Image Rights in Guernsey

Guernsey has recognised the fact that there is a significant gulf between existing laws and business practice in this area. It has also recognised that the lack of any statutory definition of an “image right” has led to uncertainty as to the extent of these types of rights and has limited the value-creation opportunities. It has therefore taken ground breaking steps to introduce the world’s first registered image rights law, which is anticipated to come into operation in the second half of 2012.

The law will not only establish Image Rights as a separate branch of intellectual property rights, it will also provide clearly defined safeguards for many celebrities and sports stars looking to protect and capitalise on their image.

The ongoing development and awareness of the issues concerning intellectual property from within the island, in conjunction with its reputation as a well regulated financial centre, with a host of professional fiduciaries able to assist in the creation and management of the types of structures which will be required to hold such rights, will place Guernsey at the forefront of image rights’ development and protection.

The new law will take its place alongside a host of other essential intellectual property rights offered by the island, ranging from copyright, trademarks and patents to databases, performers’ rights and design rights. The new law has been drafted to complement these existing intellectual property rights – so, for example, a sports star, when publishing his autobiography, will be able to rely on the law of copyright to protect the written content of the book, register any distinctive use of his name by trade mark and register his image on the front cover of the book through the new image rights legislation, and to trade all of these rights via a company administered in Guernsey.

The new law will create an Image Rights Register and a Registrar of Image Rights. It will enable a personality to register their personality and any images associated with that personality. Such image rights will bear the legal classification of a property. The law will be the first of its type in the world, with the result that image rights will be identifiable assets. There will, of course, be requirements on registration including that the image is “distinctive”. Registrable features of a qualifying personality will include a person’s name and any other associated distinguishing indications (such as voice, signature, photograph, character or likeness) which identify the personality uniquely. Thus Bruce Forsyth could register photographs and his catchphrase of “nice to see you, to see you nice”. The legislation is intended to capture all those distinctive indicia of an individual which go to their own unique, distinctive personality. It is also worth noting that the proposed law recognises joint and corporate personalities.

Scope of Protection

The new Image Rights law will only apply and protect image rights registered within the Bailiwick of Guernsey. However, registration of image rights will also provide useful collateral evidence in other countries of the intent of the celebrity to protect their proprietary image. In turn, this may add strength to other IP rights held by the personality.

The Guernsey Courts will hear and determine applications under the new law should a dispute arise. Although Guernsey is an offshore jurisdiction, with its roots in Norman law, Guernsey has adopted a common law system similar to that of England, and, when determining cases, the Guernsey Courts have the discretion to follow English case law and/or that of other similar jurisdictions. Furthermore, common law remedies available in England such as Anton Pillar orders, injunctions and other well-established forms of interlocutory and injunctive relief are available in Guernsey.

Guernsey also offers the benefit of using a major international language and has proximity to the UK and Europe. 

Administration and Management

The benefits of registering an image in Guernsey will include: (1) to provide protection of the rights tied into Bailiwick law; and (2) to facilitate a secure, stable environment for the management of the rights.

Once registered, the image right, as an identifiable asset, can be placed within a Guernsey structure which can then license, assign or even dispose of the asset. Not only will this be of benefit from an administrative perspective, but, depending on the location of the individual and the jurisdiction in which the image rights are being traded, as an offshore jurisdiction, there may also be tax advantages to holding the rights in Guernsey.

The benefits to be obtained in using a Guernsey structure not only impact on the individual trading his “image rights” but also on the recipient management company or sports club who could also structure the management of those rights from within Guernsey. The vehicle or vehicles to be used will depend on the situation, but the possibilities are endless.

Guernsey has a range of corporate vehicles capable of being used to manage and administer intellectual property rights. These include:

  • Companies: an intellectual property holding company can be created to hold an individual’s various intellectual property rights, allowing management of those rights to be carried out offshore and by professionals;
  • Protected Cell Companies (PCCs): in 1997 Guernsey introduced the concept of the PCC which is a single legal entity made up of cells, with the assets in each cell ring-fenced from the other cells. The benefit of a PCC is that the assets of one cell are not available to creditors of another cell; a product which may be well suited to house varying intellectual property rights within one structure;
  • Incorporated Cell Companies (ICCs): in 2006 Guernsey took the PCC to another level with the introduction of the ICC – an ICC is also made up of cells, however each cell has a distinct legal entity and is incorporated separately. ICC’s are also interesting because the cells can contract with each other. An advantage of an ICC is the relative ease with which a cell can be converted into an ordinary company and, where appropriate, migrated to another jurisdiction. As such, an ICC may be a suitable structure to hold various intellectual property rights and be of particular relevance to rights arising in a corporate setting, such as a sports club;
  • Trusts: a Guernsey law trust is a flexible vehicle capable of being tailored to suit an individual’s specific needs in relation to who may benefit from the assets held and under what circumstances. Guernsey is recognised globally for its stable and well regulated trust industry; and
  • Foundations: Guernsey is in the process of finalising Foundations legislation. Foundations are legal entities created for a specific, non-trading, purpose, capable of contracting in their own name. They are administered by a council according to contractual rather than fiduciary principles and as such will be familiar to those from a civil law background.

Intellectual property rights impact on many different facets of a personality’s brand and it is vital that consideration is given to how the varying types of intellectual property rights can be protected and who will own them. The appropriate vehicle to be used will depend on the situation and specific legal and taxation advice must be undertaken prior to the creation of any structure. With the new law due to be implemented in the second half of 2012, now is the time to consider the options available and the many and varied new opportunities that present.

In introducing an image rights law, the Bailiwick of Guernsey will be established as a place for world-leading legislation in intellectual property. Carey Olsen is able to provide specialist legal advice to assist at all stages in the process of establishing and protecting intellectual property rights, and particularly prior to the creation of any corporate structure necessary to manage and administer those rights.

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