Protecting image rights in an M&A deal
Michelle Blunt (Partner, Baker McKenzie, Intellectual Property Practice, London) explains the practical consideration companies need to take to protect image rights in a deal.
At face value, image rights can seem fairly simple. They are anything but – especially in an M&A deal. Image rights refer not only to pictorial images such as photographs or video but can also mean a person's name or any other distinguishing feature such as their voice, gestures or body art. Most jurisdictions do not have a clearly defined or unique "image right." That absence means that there is a need to use a patchwork of intellectual property (IP) rights to try and protect a person's image. And, in the absence of care, this can result in gaps in protection.
Complexities of image rights
In an M&A context, image rights can be especially relevant if the target's value is connected to a personal or eponymous brand. Many eponymous brands end up being sold. Christian Dior, Jo Malone and Laura Ashley were all initially personal brands that are now owned by others.
This raises complex issues which can impact the deal structure. If the person's name has been trademarked, you take an assignment of the trademark registration but you can't stop them using their name altogether (unless they are willing to change it). You can acquire copyright in photographs or video footage of them but you can't stop them being photographed in future.
In the context of buying the rights to a "regular" asset, the seller no longer has the right to use it. However, on a practical level, this can be difficult when transferring image rights, particularly if the person is still alive – they will still need to use their own name.
Protecting image rights
There are a number of practical options that can be employed to secure rights for a buyer in respect of image rights:
- Define the rights as clearly and as broadly as possible. But if there are specific elements that are key such as a name, ensure they are specifically included.
- Define what can and cannot be done with any parts of the image that cannot be wholly transferred (e.g., a voice). For example, it may be reasonable to allow use in a personal, non-commercial context.
- Seek undertakings that the person transferring their image will not claim for aspects such as defamation or breach of privacy/human rights. Consider extending any restrictions to other family members if the surname is important.
- Carry out due diligence on the subject of the image rights to determine any risk to the value of those rights. For example, you might want to get representations and warranties around criminal behaviors and also set clear expectations about what behaviors you expect or would prohibit going forward.
- Consider whether image rights survive death and, if they do, what the law says about who inherits those rights.
The ability to effectively transfer image rights may be a key part of a transaction. Identifying the relevant IP rights and then legally transferring them is not straightforward. However, careful planning and deployment of pragmatic solutions can help with an effective transfer and, ultimately, a successful transaction.