The importance of image rights in pay deals for leading players today cannot be understated, and it has become a major element of a player's annual package, along with the need to think more flexibly about wealth management in general, according to Grant Howitt, head of Intertrust's Guernsey Intellectual Property Group. Players and their agents know that their incomes can be significantly boosted by payments for use of his image in promotions.
The commercial appropriation or exploitation of a person's identity and associated images are commercially valuable, particularly for individuals who commercialize their images in association with the promotion of products or services. These days it is not only about talent, it's just as much, or even more, about the brand. Often a career in sport is at its height at a young age, but if the brand can be built and protected, it is possible to capitalize on that talent for years after retirement and even after death.
The protection of the image of an individual has increased over the years in many jurisdictions, either through case law or through limited inclusion in other Intellectual Property ("IP") laws such as Copyright legislation. However until recently, no legislation existed anywhere in the world that was exclusively drafted for the protection of all aspects of someone's image. Seeing this gap, and after years of debate and a successful consultation exercise with lawyers, financial experts and various other advisors, Guernsey has now become the first jurisdiction in the world to establish an individual legal code solely for the registration and protection of "Image Rights" as set out below.
On 28 November 2012, the States of Guernsey approved the Image Rights (Bailiwick of Guernsey) Ordinance 2012 which brought into effect the world's first registrable Image Right. This legislation means that personalities or their agents, on their behalf, can now register and protect their Personality and Image Rights at the Guernsey Registry.
The following types of personalities can be registered:-
- Natural persons;
- Legal Persons;
- Joint Personalities (eg two or more persons who are intrinsically linked in the eyes of the public);
- Groups (whose memberships can be interchangeable); and
- Fictional characters (human or non-human).
Legislation also allows for the personality of a deceased person to be registered for up to 100 years after their death. Similarly the personality of a legal person can be registered up to 100 years after its dissolution.
Being able to register Image Rights in an environment which recognises them by statute provides greater clarity in the definition of these rights and a higher degree of protection from unauthorised use by third parties than is currently on offer in any other jurisdiction.
This legislation will further secure Guernsey's position as a world class jurisdiction for IP Management and more specifically the administration and management of Image Rights for top class sportsmen, entertainers and celebrities. The new image rights law will take its place alongside other IP legislation already in place in Guernsey such as trademarks, patents, design rights and copyright. The new law has been drafted in a way to complement these other IP rights and this total package can potentially provide significant benefits.
Although the image rights law will only apply and protect such rights registered in Guernsey, registration will also provide a useful collateral evidence in other countries of the intent to protect the proprietary image and may well add strength to other IP rights already held and registered in other territories.
The legislation will allow athletes and sports teams, amongst others, to consider centralizing the ownership of their image (and other IP) rights in Guernsey, safe in the knowledge that there is a clear legislative framework Image rights payments are normally made through companies, owned by the sports star or an appropriate vehicle such as a Trust or Foundation. Payments relate to any off-field earnings, including replica shirt sales, promotional work and endorsements.
Depending on the residence and domicile status of the sports star, those payments can possibly be exploited more effectively and efficiently by being packaged outside the separate employment contract, and in most cases can significantly reduce the tax burden. Image rights are increasingly important in negotiations, and it is becoming more common for top-flight sports stars, depending on their tax status, to base their image rights company in a tax neutral jurisdiction such as Guernsey. The company owning the image rights can be used as an accumulation vehicle for retirement, or profits can be taken out of the company in a tax-efficient manner.
A well planned offshore structure can also potentially further enhance the tax advantages and provide long-term estate and succession planning for the sports star and his or her family. While Guernsey is often perceived as just another offshore tax haven, the island is in fact trying to create the best environment possible for the Island to become a location for centralization and management of IP to sit alongside its world renowned financial services industry. The industry has decades of experience in providing trust and corporate services, and there is substantial expertise in using the innovative modern structures available locally for the preservation of institutional and individual or family wealth and assets, with estate and inheritance planning being key elements of the island's wealth management offering.
Registered Image Right Agents
Registered Image Rights agents need to have a place of business in Guernsey to ensure a commitment and contribution to the Island and these agents will need to comply with a Code of Practice and Regulations to ensure they are deemed fit and proper by the Guernsey IP office. Grant Howitt, who heads up our IP team at Intertrust in Guernsey, was amongst the first group of individuals to have his application to register as an Image Rights agent accepted and is therefore now eligible to make submissions. Grant was also one of the first agents to submit a registration to the Image Rights Registry on behalf of an existing client.
The Intertrust group both in Guernsey and globally has developed expertise in the administration and management of Image Rights and other IP holding and licensing structures over nearly two decades and today our clients include some of the world's top performers and artists and renowned personalities such as footballers, musicians, pop artists, DJs and fashion models.
The Intertrust Intellectual Property Group focuses on convenience and tax efficiency and working with the best lawyers, accountants, agents and managers, solutions are crafted to accommodate each individual situation. The increasingly global nature of entertainment, sport and media requires a truly international perspective. With IP experts in various strategic locations including Amsterdam, Cayman Islands, Cyprus, Dublin, Guernsey, London, Luxembourg and Singapore, our Intellectual Property Group provides the skills, contacts and specialized services to capitalise on the commercial potential of a song, name or image.
For further information on this legislation or registration requirements or for any requests regarding our services in respect of Image Rights and other IP Rights please contact Grant Howitt of our Intellectual Property team in Guernsey.
Originally published in FC Business, January 2013
For more information about Guernsey's finance industry please visit www.guernseyfinance.com.
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