Monday, 30 November 2015

Restricting the Usage of a Valuable Asset Post-Mortem: The Robin Williams Trust

Under U.S. wills and trusts law, unlike other jurisdictions, the intent of the decedent is a paramount consideration in the enforcement of restrictions on the disposition and exploitation of assets after death.  In other jurisdictions, courts tend to be wary of attempts by decedents to control valuable resources after their death because of concerns with dead hand control.  Why should the dead be able to make binding decisions on the living concerning scarce and valuable resources?  Isn’t it better for the living to make those decisions in light of current considerations and needs of the beneficiaries?  In the United States, courts tend to view restrictions on alienability of property by beneficiaries not so much as dead hand control, but as essentially conditional gifts.  Absent some other overriding public policy, courts are likely to enforce those restrictions. 

Notably, as discussed recently on this blog here, the right of publicity is a very valuable right in the United States.  Under many right of publicity statutes, it is not just a right a celebrity has during life, but it is a right that can be transferred at death.  There is a viable and potentially very valuable post-mortem right.  For example, California Civil Code section 3344.1 provides in part: “The rights recognized under this section are property rights, freely transferable or descendible, in whole or in part, by contract or by means of any trust or any other testamentary instrument, executed before or after January 1, 1985. . . . An action shall not be brought under this section by reason of any use of a deceased personality's name, voice, signature, photograph, or likeness occurring after the expiration of 70 years after the death of the deceased personality.”  Notably, the Internal Revenue Service (tax collecting authority in the United States) is embroiled in a lawsuit concerning the valuation of Michael Jackson’s right of publicity, among other assets of the estate.  The Internal Revenue Service has claimed “a value of $434,264,000 for Jackson's ‘image and likeness,‘’ and Michael Jackson’s estate claimed a value of $2,105 (Notably, the Internal Revenue Service recently upped the amount of the tax liability!).  As you can imagine, the difference between the tax liability based on the two valuations is enormous.  The difference apparently rests on a disagreement about what post-mortem activities can be used to calculate the value of the estate at death—an apparent ambiguous question under U.S. law that this case may resolve.  

Ordinarily under U.S. trust law, a trust is not published and is usually private.  However, if there is litigation concerning a trust, a trust may be made public.  Recently, the Robin Williams trust was published as an exhibit to litigation concerning a family dispute about the disbursement of some personal property.  The Robin Williams trust attempts to address taxation concerns by leaving Robin Williams’ post mortem right of publicity with his charitable foundation.  This addresses the problem that the estate may have with a huge tax burden at the death of a celebrity that the estate may not have the liquid assets to address.  From the taxation perspective, it appears that the post mortem right is not so much a blessing, but could be a curse for beneficiaries of the estates of celebrities.  

Interestingly, the trust also includes a provision that restricts the exploitation of the right of publicity by the charitable foundation for 25 years from Robin Williams death.  Some commentators speculate that this provision was included in the trust to prevent the usage of Williams’ image in product endorsements or in movies that the William’s may have disagreed with, particularly in the age of digital media.  For example, commentators have pointed to the post-mortem usage of Paul Walker’s digital image in the recent blockbuster Fast and Furious movie.   (But, who doesn't want to see Ms. Doubtfire X?) Notably, the right of publicity in the U.S. is often justified because it provides an incentive for people to develop commercially valuable personas.  However, it is also sometimes justified because of a concern with the right to privacy.  In this particular case, Robin Williams is essentially exercising a form of dead hand control to suppress the usage of his commercially valuable right of publicity.  In the U.S., I have little doubt that courts will enforce the restriction.  However, should we enforce the restriction?  Should we allow this commercially valuable asset to lie fallow for 25 years, particularly when it could be used to benefit a charitable foundation?  Should the foundation be able to challenge the restriction?  For sure, Williams’ intent and right to privacy should weigh heavily in the analysis.  However, he is dead and the "right" trustee may be able to make decisions concerning the exploitation of his right of publicity that may be consistent with Williams' general intent.

For additional commentary and sources, see Audrey G. Young, Use of Foreseeable Post-Mortem Events in Valuing Estate, Estate Planning (April 2015); Eriq Garnder, Robin Williams Restricted Exploitation for 25 Years After His Death, Hollywood Reporter (March 30, 2015); and Natalie Robehmed, Why RobinWilliams Won’t be Making Millions Beyond the Grave, Forbes (October 27,2015). 

Thursday, 26 November 2015


Since posting the first few items on the IP Finance weblog back in January 2008 I have greatly enjoyed my part in what soon became a team effort in seeking to promote greater awareness of those areas of IP law and practice that border financial issues.  Now that I am stepping down and retiring from active intellectual property work, I am happy to let you know that my fellow blogger Mike Mireles will be taking the reins of IP Finance.  If you have information or ideas that might make the basis of a good blogpost, or if you would like to be considered as a prospective member of the blog team, email Mike at and let him know.

Finally, a big thanks to all my blog team colleagues and to you, the readers, for making my participation in this blog the educative experience which it has been for me.

Wednesday, 25 November 2015

UK Spending Review & IP

Crickets - by Billy Hathorn
The UK Spending Review happened today – also known as the Autumn Statement – basically it's an update on the economic state of the nation in the UK and a staging post for economic, tax, etc announcements.

In past years, the Spending Review (or whatever it was known as in that particular year, the name changes) has brought us things like the patent box, R&D relief, and so on.

This year … crickets, from a tax perspective. Nothing much, really (a small change on entering into the intangibles tax regime for corporate partners).

There's some spending announcements though (with the usual caveat that it's a bit hard to tell what's new money and what's been announced before):

  • £5bn in health R&D, including £50m in antimicrobial resistance research; 
  • £150m to launch a Dementia Institute (presumably to do R&D);
  • investing £6.9bn in capital (capital what?) to ensure that the UK remains a world leader in science and research, and protecting the current £4.7bn research funding "in real terms" for the same purpose - but note that £6.9bn includes the £150m for the Dementia Institute;
  • investing £250m in a nuclear R&D programme (looks like it will be mostly for small modular reactor development, and focussed on spending in the North of England);
  • protecting funding for the arts in real cash terms for 5 years;
  • the £1bn Ross Fund investing in R&D in drugs, vaccines, diagnostics and treatments for infectious diseases – patterned with the Bill & Melinda Gates Foundation, so not all of that £1bn is coming out of UK pockets;
  • playing a leading role in international research efforts to reduce the costs of low carbon energy (no £ information indicated, though);
  • a new entity called "Research UK", based on the Paul Nurse review recommendations. This will work across (not with? maybe just poor wording …) the Research Councils to promote a strategic approach to science funding. Innovate UK will be integrated into Research UK. The Research Excellence Framework will be reviewed.
[ETA 26/11/15 – the Innovate UK grants are to be replaced by loans, according to a press release from BIS, which doesn't have more detail on the point]

The Review also notes that scientific R&D has grown by 21.3% and architecture and engineering activities by 38.8% (possibly since the beginning of 2010, although that's not entirely clear, and neither is it clear what metric they are measuring – employment numbers? capital expenditure? revenue expenditure?).

Stats for the curious: "research" is mentioned 46 times, "science" 35 times, and "technology" 30 times in the policy paper (PDF).

Tuesday, 24 November 2015

Vote on FRAND?

World Intellectual Property Review is running a survey about FRAND and the formation of the Fair Standards Alliance reported on this blog here.

WIPR is asking whether you agree that the definition of FRAND must have a clearer meaning to allow standards to foster innovation. There's no link provided to the arguments set out in the Fair Standards Alliance's white paper (found here), but at least one can post comments.

In this blogger's view, the question is a leading one. It's seems to be a no-brainer that it would be nice to have a clearer understanding of FRAND. But what does a clearer understanding mean? Clearly different things to different people and that is the kernel of the problem.

The survey can be taken here.

Friday, 20 November 2015

FRAND for all

We've been interested to see the start of a new group called the fair standards alliance which was launched this week. Based out of Brussels, the group has members from a number of industries and sets out four key principles:

  1. A license for a SEP should be available at any point in the value chain where the standard is implemented, and the important terms of those licenses should be transparent to other companies implementing the same standards;
  2. A FRAND royalty should reflect the value of the invention. In most cases that means that it should be based on the smallest device that implements those patents, and additionally it should take into account the overall royalty that could be reasonably charged for all patents that are essential to that standard;
  3. Injunctions and similar legal threats should be a last resort;
  4. A FRAND commitment made in respect of a SEP should not fall away simply because the SEP is sold to another company.
The groups membership includes firms as diverse as car makers BMW and Volkswagen together with ICT companies such as Cisco, Dell, and Intel to name just a few.

Their stated role is to promote fair, balanced and rational practices in the licensing of patents which are essential to standards and they set out their position in a detailed position paper available here.

Given the controversial nature of patents in the standard-setting process the group's role could be invaluable in providing an industry-wide view of the standard setting process from companies that are both innovators and product designers  who want to see a return on their investment but also appreciate the need for an approach that encourages the development of standards.