Guernsey is set to beat all the world’s other jurisdictions in overhauling its intellectual property regime to better protect the image rights of high-profile individuals like sports and media stars. For the first part of this feature, click here. 

Rights into perpetuity

Elaine Gray, counsel at Carey Olsen, touches on another way in which the new law promises to boost business among Guernsey’s financial and legal professions: succession planning. A key point here is that under Guernsey law image rights will have the potential to exist in perpetuity and so stars will be able to bequeath the licensing for their image rights (or indeed parts of them). Interestingly, the law will allow the posthumous registration of image rights (although this will only go back 100 years). In fact, Jason Romer, managing partner at law firm Collas Crill, said he has already received inquiries from the relatives of a recently-deceased celebrity. Here, the question of who owns the rights (the deceased’s estate, spouse or children) “will be a particularly difficult question,” he continued. In such cases “lots of due diligence will have to be performed to ensure that there is a clear chain of title,” added Gray.

Contentious cases like this aside, Guernsey’s existing intellectual capital means it is well-placed to serve all the business which will arise from the Image Rights Ordinance – however complex the structure required. “Once you have legal clarity on the ownership of image rights, you can assign the rights to a company which then trades it…you can enter into contracts, you can get financing,” said Gray, highlighting some of the ways the benefits from image rights could be exploited. As such, the IR Ordinance represents a “perfect partnership with the rest of the financial services industry; it sits well with them and it’s the perfect bolt-on,” she continued.

Who will be “GIR1”?

The IR Ordinance has “clear advantages for ultra high net worth celebrities,” said Gray, “Guernsey will give them an advantage they cannot obtain anywhere else in the world.” There is therefore much anticipation building over who the very first individual to register an image in the island’s registry will be. On this front, one man who will certainly find himself being pumped for information will be John Ogier, registrar at the Intellectual Property Office (part of Guernsey Registry) and a key driver of the initiative from a governmental perspective.

Guernsey expects the first registrations to take place at the end of this year or the beginning of 2013, but since the island is central to the affairs of scores of sports, media and entertainment stars, it’s difficult to speculate who GIR1 will be. One thing is for certain, however, the identity of this individual will likely become public knowledge very quickly as the Guernsey image rights register will be publicly searchable online. This kind of transparency is in fact representative of Guernsey’s whole approach to the legislation – the island is keen to actively engage with HM Revenue & Customs on how it will function in practice, for instance. “We want it to be robust… we want to demonstrate to HMRC that this is a proper product,” said Gray.

The IR Ordinance is clearly a source of some pride among Guernsey’s legal profession, not only because so much work has gone into getting the legislation right. The world’s eyes will all be on Guernsey and so from a reputational perspective “it’s really important to get it right first time round,” explained Romer.

Given how groundbreaking the IR Ordinance is, one would think that Guernsey would be keeping its cards pretty close to its chest when it comes to the intricacies of the legislation – and it has, but while still gathering as many heads around the issue as possible. In the words of Romer, the draft legislation was distributed to a “very focused” group of legal practitioners for their feedback (the consultation period closed in March).

Focused the consultation may have been, but it has also been very thorough and as such Guernsey’s industry is “very optimistic” the legislation will go straight through when it goes before the States of Guernsey (this is hoped for in the autumn some time). The fact that the States unanimously voted for the proposal of the legislation last autumn is “quite unusual” and therefore very promising, said Gray. The fact that Guernsey’s new Commerce and Employment Minister is, in Gray’s words, “very much behind IP” must also bode well - as must the fact that the island is keen to do more business with the media sector in general (the island is also looking to become an international data streaming hub, for example).

Imitation: the sincerest form of flattery

In the years to come other jurisdictions will no doubt amend their own regimes to keep pace with Guernsey’s IR Ordinance but the island’s practitioners are confident of owning the field for some time to come since such complex legislation necessitates a significant lead time. Singapore is widely predicted to be the next jurisdiction to tackle image rights, but it will probably be a couple of years before the Asian powerhouse IFC manages to catch up, experts told this publication. Guernsey has “first mover advantage just as it did with Protected Cell Companies; image rights offers the same opportunities,” said Gray. Guernsey was the first jurisdiction internationally to introduce PCCs back in 1997.

That said, Romer went on to explain that such imitation will actually be viewed very positively by Guernsey since it vindicates the island’s decision that there was a gap in the statute books, as it were. For now, however, those behind the IR Ordinance are proud for Guernsey to stand apart as a unique jurisdiction in the IP stakes. “You don’t often get the chance to do something truly unique and groundbreaking. We’re shouting about it because we’re very proud to have got to this stage – it’s hard to overstate just how unique an offering this is,” said Gray.

It’s not often in the fast-moving world of international wealth management that a jurisdiction can claim to have a truly unique offering, but in this case Guernsey seems to have developed just that. It will be interesting to see how far the island’s financial and legal services industries can press home Guernsey’s advantage.