This is the first in a series of blog posts regarding estates of celebrities that have significant intellectual property overlays. Most of the estates will involve “rights of publicity”, a legal concept under state laws that differ substantially nationwide. In general, rights of publicity protect against commercial exploitation of one’s name, likeness, or other traits associated with the person. In some states, these rights survive death for a number of years, the number depending on the state (for example, 70 years in California). Copyrights and/or trademark rights will also usually figure in.
Let’s start with David Bowie, born David Robert Jones on January 8, 1947. As most readers will know, David Bowie was a famed musician and actor (e.g., as the Goblin King in Labyrinth). He passed away on January 10, 2016.
“Is it any wonder I reject you first? Fame, fame, fame, fame”
Fame, by David Bowie et al.
In the 1970’s, David Bowie realized that his manager, DeFries, owned a significant portion of Bowie’s rights in his music.
"He had this psychological nose-dive - all this music he had suffered to create didn't [entirely] belong to him." – Trynka
You might be asking – how can this happen? How could someone not own what he had created. In this instance, Bowie and DeFries created and agreed to an unusual contract which granted DeFries half of the royalties from Bowie’s music. As their relationship deteriorated, Bowie became increasingly frustrated with this arrangement and DeFries’ control over Bowie’s career.
In order to regain control over the music he had labored to create, Bowie partnered with Prudential in one of the first attempts to securitize musical intellectual property rights. By using the royalty streams (and underlying copyrights) from 25 pre-created records as the underlying asset, Bowie was able to secure bonds purchased by Prudential for $55 Million, to be paid back in 10 years, with a 7.9% rate of return. Bowie was able to use part of the proceeds of the sale to buy out his former manager, DeFries. While Bowie lost the rights to the income generated from those records from 1997 to 2007, after the bonds matured they were redeemed without default and Bowie regained the right to income thereafter.
Yet another smart move was to apply for and receive U.S. Trademark Reg. No. 2,481,821 in 2001, for DAVID BOWIE® for a number of goods and services, which adds strength to the rights of publicity associated with his name. While rights of publicity are limited in time, trademarks can last forever as long as they are continuously used as trademarks. (In a future installment we will discuss valuable rights of publicity in more detail.)
David Bowie also named as his executor William Zysblat, Bowie’s long-time business manager. The Washington Post opined, I think correctly, that: “Naturally, someone who has worked extensively with an artist is more informed about what the artist would have wanted his post-death career to look like.”
Although most of us aren’t famous (yet), these celebrity vignettes help illustrate the ways that creative thinking and strategic partnership can protect your assets and your legacy during your life and after your death.
Stay tuned for more ways to navigate the *Labyrinth* of intellectual property!
Post by: Jeffrey D. Myers, M.S., J.D.
Disclaimer: These materials are designed as a general overview and should not be relied upon for legal or tax advice. Please consult a qualified attorney and/or tax advisor for compliance and up-to-date information and advice specific to your circumstances.