Feature: Image Rights - do they exist and who should own them?  

Branded merchandising and celebrity endorsement is big business today, writes Andrew Braithwaite and Sonya Pennington of law firm Osborne Clarke. Sports clubs and the individual players particularly have become aware of the commercial value of their images and are selling clothing, computer games and mobile airtime. It is believed that almost two-thirds of total marketing spend of UK companies is on sport related marketing.

The concept of rights in a personality's image already exists in Canada and the US. The ‘right of publicity’ gives the individual the exclusive right to control commercial use and exploitation of his image, voice and likeness. Australia grants its celebrities the right to be compensated where they are deprived of endorsement fees from misrepresentation of their reputation. France has strong publicity laws, (Eric Cantona was awarded damages for the unauthorised use of his image on the cover of a video), and statutory publicity rights also exist in Italy, Germany and the Netherlands.
‘Image Rights’ however do not exist per se in the UK, but are based upon a number of statutory common law rights, none of which are specifically designed to protect the unauthorised use of a personality's image. Without a general right of publicity the rights which a celebrity has to rely on are: passing off, trademark infringement, copyright infringement, libel, malicious falsehood and the Trade Descriptions Act 1968.
Registration of a trademark gives the owner an exclusive right to use the mark for certain goods and services, licensing the use of such marks can generate lucrative licence fees and royalties. It also entitles the owner to prevent third parties from using it without first having to establish reputation and goodwill under it. Who can forget the efforts by UK soccer player Paul ‘Gazza’ Gascoigne to register his brand. However, trademark registration cannot give the protection needed in most cases, unless the name is disctinctive.

The fame game

Formula One driver Eddie Irvine used the law of ‘passing off’ to his advantage, (‘passing off’ is when a party tries to pass off their goods or services as another's without their consent, taking advantage of the others' brand, reputation or good will). A photograph of Eddie Irvine holding a mobile telephone was manipulated in the UK to replace the phone with a portable radio showing the brand of sports radio station ‘Talk Radio’. The image was then used by Talk Radio in its advertisements. This was a misrepresentation that he was endorsing Talk Radio. The courts noted that it was common for famous people to exploit their names and images by way of endorsement and that the endorsee gained the benefit of the attractive force of the reputation of that famous person. Also, it acknowledged that celebrities do have a 'property right' in their goodwill, which may be enforced against those who make false suggestions of endorsement of their products.
However, there is a fine line between false endorsement, which is actionable in the UK, and character merchandising, (where the celebrity image is used merely to adorn a product, and where there is no suggestion that the celebrity isto be associated with it), which still is not actionable.
Image rights are also treated as a commercial property right. German soccer’s Bayern Munich goalkeeper Oliver Kahn successfully stopped his image and name being used in the FIFA 2002 computer soccer game without his permission. The manufacturer of FIFA World Cup 2002 computer game, Electronic Arts was granted licences from various soccer federations and players' groups to use names and likenesses of players, however Kahn did not belong to any of the organisations and had not given permission for his likeness to be used. UK law firm Osborne Clarke advised Electronic Arts in the case.

Real issues for David Beckham

David Beckham's move to Real Madrid has recently been a hot topic. His face sells products worldwide and makes significant revenue for his club. Manchester United agreed to Beckham keeping hold of his image rights and allowed him the freedom to choose his own endorsements. As a result Manchester United paid him (via his image company) £33,300 a week for the club to use his image on club merchandise. He also has promotional deals with Adidas, Brylcreem and Police sunglasses and has recently signed a deal with retailer Marks & Spencer to design and promote a range of casual clothing for boys which will feature his name.
So what will happen to Beckham's image rights now he has signed for Real Madrid? A top Real Madrid official, Emile Butragueno says: "When a player signs for Real Madrid he must give up his image rights for the club to manage …. This is a must, a policy of the club, but of course we would respect previous agreements… Ronaldo and (Zinedine) Zidane had several contracts signed already but we now manage the image rights and share the revenue with them." This means that David Beckham’s current contracts that he has concerning his image rights will remain as they are, however, any future contracts must be managed by the club and the income will then be shared with the club.
Image rights are under discussion between the Professional Footballers Association and various clubs and it appears that a new standard players contract will be negotiated between the parties dealing with them.

Tax treatments

Where's there value, there's going to be tax - sports men and women have used companies to own their image rights and so receive more favourable tax treatment. In the case involving Dennis Bergkamp and David Platt of English Premier League’s Arsenal Football Club, the position of payments made to sports personalities for the exploitation of their image rights was considered. In this case both players had entered into promotional agreements with their own image rights companies to which they agreed to provide promotional services. Arsenal then entered into an agreement with the companies agreeing to supply to Arsenal the promotional services of the players in return for fees paid by Arsenal to the companies. Promotional agreements were separate commercial contracts and were held to be genuine commercial agreements which could be enforced. This case shows that it is entirely possible for sports personalities to separate their playing services from their promotional services so that their image rights do not form part of their employment contract. As long as the sport personality has an image of value, they can exploit it.
For tax purposes image rights are seen as capital assets even though image rights as rights do not actually exist under English Law.

Greater control for celebrities

It is not surprising that the courts are now recognising that the image and name of celebrities constitute a brand, and that such status brings with it huge economic potential. In the Eddie Irvine case, the court indicated that it is prepared to grant celebrities a greater degree of control over how their images are used.
While we wait for stronger national rights to protect our images, any commercial exploitation of a personality's image should be governed by an agreement between the parties at least stating who controls those image rights, what image is being exploited, the scope of the use and where it is going to be used - and of course the financial compensation. Any use of the name, image or brand of a sport personality without authorisation is liable to lead to legal action in several jurisdictions and is likely to be expensive.
Such large sums are at stake when it comes to the protection of image rights, this is not only the concern of the player but also the corporation which is putting in the money to market this image. What is clear is that these image rights can be owned, what goes with ownership is the power to exploit, and therefore licensing. Recent cases in various countries raise questions about the ownership of image rights and whether it should be the individual, the team or the league that they play in, or the federations in charge of the sport.
Some people believe that the public created the personality's fame and that it is the public as a whole which decide whether or not an individual is famous or not and who owns the rights. Other people argue that the personalities have worked hard to create their fame and so should be able to benefit commercially from the results of this hard work. Whichever way you view it, and with such commercial value at stake, you'd certainly want to have certainty over your image rights or your right to use other peoples' image rights.

Andrew Braithwaite is an intellectual property partner with Osborne Clarke, who advises both the owners of sports rights and those who exploit them in both old and new media - Sonya Pennington assists him. www.osborneclarke.com

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