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Megastar personalities are intellectual property in draft law

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The Guernsey Intellectual Property Office (IPO) has opened a public consultation on draft laws that would for the first time anywhere in the world allow celebrities to register their personality rights as a form of intellectual property. A sports law expert said the chance for enhanced legal certainty over their image and potential financial benefits could lure celebrities to register their rights on the island.

Under the proposals seen by Out-Law.com, individuals will be able to register their personality and gain exclusive rights to exploit their image. Under the terms of the draft text this would mean celebrities could control the use of their name, or the one they are known by as well as other characteristics, such as their voice, autograph, mannerisms, likeness, appearance, expressions, gestures or "any other distinctive characteristic or personal attribute" associated with them. They would also have rights over which photographs, illustrations or videos they feature in. These image rights could also be conferred upon "fictional characters".

Images will only be deemed to be protected if they are distinctive and have "actual or potential value" and will be deemed to be 'used' if they are communicated to the public or in connection with sponsorship, among other prohibited uses.

Those who exploit a registered personality's image rights without that person's consent will generally be deemed to be infringing on those rights if they use an identical image to one that is protected - such as by using a celebrity's name to publicise an event or product. An infringement will also be deemed to have occurred if a similar image to one that is protected is used without consent where there is "the likelihood" of associating that similar image as belonging to the registered personality.

Where an identical or similar image is used to one that is protected that "without due cause, takes unfair advantage of, or is detrimental to, the distinctive character, repute or value of that registered personality" without consent, an infringement of that person's rights will also be deemed to have occurred.

The draft legislation does include exceptions whereby a personality's protected trait can be freely exploited legitimately without prior approval. Individuals that use protected images in "acts done privately which derive no commercial or financial benefit" would generally not be infringing on that registered personality's rights, the draft text states. There is also scope to use protected images for the purpose of identifying the personality or as an incidental inclusion in material that is made publically available. The protected image rights can also be freely exploited for educational purposes.

The media and others can also use the 'fair dealing' defence to legitimately refer to registered images in news reports, commentary and in satire, whilst academics have the same licence to do so in research projects.

Generally, the limitations only apply providing the protected image rights are used "in accordance with honest practices in industrial, commercial or not for profit matters" and is "not detrimental or does not take unfair advantage, without due cause, to the distinctive character or repute of the registered personality".

Some countries in the world do have legislative provisions that give individuals particular rights over their personality, image or publicity, but currently there is nowhere that offers celebrities the chance to actually register those rights.

More than just a gimmick

James Earl, a senior sports law expert at Pinsent Masons, the law firm behind Out-Law.com, said that although the new legislation could at first glance appear to be something of a gimmick to generate business, it would provide greater legal certainty to celebrities over how to exploit and enforce rights over their image.

“Although image rights are not, for example, directly enshrined in existing legislation in the UK there have still been ways for famous people to control and protect how their image is exploited, so it is not as if this ability did not exist at all prior to this legislation being drafted,” Earl said.

“If a person's image is of significant commercial value to them, there are ways to assert control over it, such as by registering trade marks or, where appropriate circumstances exist, claiming others are trying to pass off as them by unfairly exploiting goodwill around their reputation," said Earl. "In addition celebrities, like all members of the public, are also generally entitled to a private life as a fundamental human right but of course this has regularly been subject to legal challenges by the media that claim the equal right to freedom of expression.

"Aside from giving image rights full legislative recognition, what Guernsey is proposing is a more ‘black and white’ way for personalities to determine whether image rights have been infringed. The first test cases from this legislation will therefore be fascinating to watch," Earl said.

"An interesting point to note from the draft legislation is that it will be the Guernsey Registrar of Intellectual Property who determines the legitimacy of image rights applications. Given that not everyone will be able to register image rights - on the basis that one generally has to have a sufficiently prominent and valuable 'image' to exploit - it will be curious to find out just where the dividing line is between an image worthy of protection and one that is not. It does appear, at present, to be a subjective matter, though of course one would expect guidance to accompany the new legislation in this regard,” Earl said.

Earl also said that there could also be an additional financial benefit for Guernsey's corporate administration, trustee and legal industry.

“Guernsey is a small island and it has to compete for business with other off-shore jurisdictions. The Bailiwick already offers tax breaks to companies that hold assets, such as intellectual property, based there and Guernsey is highly-regarded as a jurisdiction of choice," he said. "However, the ability to establish registered image rights in Guernsey may encourage more people to assign those image rights to corporate vehicles and get trustee administrators based on the island to manage those assets."

"This legislation certainly gives Guernsey a unique competitive edge in this regard. However, UK resident personalities need to be incredibly careful to ensure that their arrangements are legitimate," said Earl. "HM Revenue & Customs is increasingly clamping down on those that are unfairly seeking to avoid higher tax in the UK. Image rights structures are at the forefront of what HMRC consider to be potential tax avoidance vehicles. It's therefore essential to obtain proper legal and tax advice from the outset - my experience is that HMRC will look for any weakness in a structure, however small."

The Guernsey IPO's consultation is open until 7 March. The finalised image rights legislation could be introduced this summer.

Copyright © 2012, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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