U.S. Copyright Notice of Inquiry Regarding AI and Copyright

The U.S. Copyright Office released today a notice of inquiry concerning AI and copyright.  The Press Release states:

Today, the U.S. Copyright Office issued a notice of inquiry (NOI) in the Federal Register on copyright and artificial intelligence (AI). The Office is undertaking a study of the copyright law and policy issues raised by generative AI and is assessing whether legislative or regulatory steps are warranted. The Office will use the record it assembles to advise Congress; inform its regulatory work; and offer information and resources to the public, courts, and other government entities considering these issues.

The NOI seeks factual information and views on a number of copyright issues raised by recent advances in generative AI. These issues include the use of copyrighted works to train AI models, the appropriate levels of transparency and disclosure with respect to the use of copyrighted works, the legal status of AI-generated outputs, and the appropriate treatment of AI-generated outputs that mimic personal attributes of human artists.

The NOI is an integral next step for the Office’s AI initiative, which was launched in early 2023. So far this year, the Office has held four public listening sessions and two webinars. This NOI builds on the feedback and questions the Office has received so far and seeks public input from the broadest audience to date in the initiative.

“We launched this initiative at the beginning of the year to focus on the increasingly complex issues raised by generative AI. This NOI and the public comments we will receive represent a critical next step,” said Shira Perlmutter, Register of Copyrights and Director of the U.S. Copyright Office. “We look forward to continuing to examine these issues of vital importance to the evolution of technology and the future of human creativity.”

Initial written comments are due by 11:59 p.m. eastern time on Wednesday, October 18, 2023. Reply comments are due by 11:59 p.m. eastern time on Wednesday, November 15, 2023. Instructions for submitting comments are available on the Office’s website. Commenters may choose which and how many questions to respond to in the NOI.

The NOI includes the following questions:

General Questions

The Office has several general questions about generative AI in addition to the specific topics listed below. Commenters are encouraged to raise any positions or views that are not elicited by the more detailed questions further below.

1. As described above, generative AI systems have the ability to produce material that would be copyrightable if it were created by a human author. What are your views on the potential benefits and risks of this technology? How is the use of this technology currently affecting or likely to affect creators, copyright owners, technology developers, researchers, and the public?

2. Does the increasing use or distribution of AI-generated material raise any unique issues for your sector or industry as compared to other copyright stakeholders?

3. Please identify any papers or studies that you believe are relevant to this Notice. These may address, for example, the economic effects of generative AI on the creative industries or how different licensing regimes do or could operate to remunerate copyright owners and/or creators for the use of their works in training AI models. The Office requests that commenters provide a hyperlink to the identified papers.

4. Are there any statutory or regulatory approaches that have been adopted or are under consideration in other countries that relate to copyright and AI that should be considered or avoided in the United States?  How important a factor is international consistency in this area across borders?

5. Is new legislation warranted to address copyright or related issues with generative AI? If so, what should it entail? Specific proposals and legislative text are not necessary, but the Office welcomes any proposals or text for review.

Training

If your comment applies only to a specific subset of AI technologies, please make that clear.

6. What kinds of copyright-protected training materials are used to train AI models, and how are those materials collected and curated?

6.1. How or where do developers of AI models acquire the materials or datasets that their models are trained on? To what extent is training material first collected by third-party entities (such as academic researchers or private companies)?

6.2. To what extent are copyrighted works licensed from copyright owners for use as training materials? To your knowledge, what licensing models are currently being offered and used?

6.3. To what extent is non-copyrighted material (such as public domain works) used for AI training? Alternatively, to what extent is training material created or commissioned by developers of AI models?

6.4. Are some or all training materials retained by developers of AI models after training is complete, and for what purpose(s)? Please describe any relevant storage and retention practices.

7. To the extent that it informs your views, please briefly describe your personal knowledge of the process by which AI models are trained. The Office is particularly interested in:

7.1. How are training materials used and/or reproduced when training an AI model? Please include your understanding of the nature and duration of any reproduction of works that occur during the training process, as well as your views on the extent to which these activities implicate the exclusive rights of copyright owners.

7.2. How are inferences gained from the training process stored or represented within an AI model?

7.3. Is it possible for an AI model to “unlearn” inferences it gained from training on a particular piece of training material? If so, is it economically feasible? In addition to retraining a model, are there other ways to “unlearn” inferences from training?

7.4. Absent access to the underlying dataset, is it possible to identify whether an AI model was trained on a particular piece of training material?

8. Under what circumstances would the unauthorized use of copyrighted works to train AI models constitute fair use? Please discuss any case law you believe relevant to this question.

8.1. In light of the Supreme Court's recent decisions in Google v. Oracle America   and Andy Warhol Foundation v. Goldsmith, how should the “purpose and character” of the use of copyrighted works to train an AI model be evaluated? What is the relevant use to be analyzed? Do different stages of training, such as pre-training and fine-tuning, raise different considerations under the first fair use factor?

8.2. How should the analysis apply to entities that collect and distribute copyrighted material for training but may not themselves engage in the training?

8.3. The use of copyrighted materials in a training dataset or to train generative AI models may be done for noncommercial or research purposes. How should the fair use analysis apply if AI models or datasets are later adapted for use of a commercial nature?  Does it make a difference if funding for these noncommercial or research uses is provided by for-profit developers of AI systems?

8.4. What quantity of training materials do developers of generative AI models use for training? Does the volume of material used to train an AI model affect the fair use analysis? If so, how?

8.5. Under the fourth factor of the fair use analysis, how should the effect on the potential market for or value of a copyrighted work used to train an AI model be measured?  Should the inquiry be whether the outputs of the AI system incorporating the model compete with a particular copyrighted work, the body of works of the same author, or the market for that general class of works?

9. Should copyright owners have to affirmatively consent (opt in) to the use of their works for training materials, or should they be provided with the means to object (opt out)?

9.1. Should consent of the copyright owner be required for all uses of copyrighted works to train AI models or only commercial uses? 

9.2. If an “opt out” approach were adopted, how would that process work for a copyright owner who objected to the use of their works for training? Are there technical tools that might facilitate this process, such as a technical flag or metadata indicating that an automated service should not collect and store a work for AI training uses? 

9.3. What legal, technical, or practical obstacles are there to establishing or using such a process? Given the volume of works used in training, is it feasible to get consent in advance from copyright owners?

9.4. If an objection is not honored, what remedies should be available? Are existing remedies for infringement appropriate or should there be a separate cause of action?

9.5. In cases where the human creator does not own the copyright—for example, because they have assigned it or because the work was made for hire—should they have a right to object to an AI model being trained on their work? If so, how would such a system work?

10. If copyright owners' consent is required to train generative AI models, how can or should licenses be obtained?

10.1. Is direct voluntary licensing feasible in some or all creative sectors?

10.2. Is a voluntary collective licensing scheme a feasible or desirable approach?  Are there existing collective management organizations that are well-suited to provide those licenses, and are there legal or other impediments that would prevent those organizations from performing this role? Should Congress consider statutory or other changes, such as an antitrust exception, to facilitate negotiation of collective licenses?

10.3. Should Congress consider establishing a compulsory licensing regime?  If so, what should such a regime look like? What activities should the license cover, what works would be subject to the license, and would copyright owners have the ability to opt out? How should royalty rates and terms be set, allocated, reported and distributed?

10.4. Is an extended collective licensing scheme  a feasible or desirable approach?

10.5. Should licensing regimes vary based on the type of work at issue?

11. What legal, technical or practical issues might there be with respect to obtaining appropriate licenses for training? Who, if anyone, should be responsible for securing them (for example when the curator of a training dataset, the developer who trains an AI model, and the company employing that model in an AI system are different entities and may have different commercial or noncommercial roles)?

12. Is it possible or feasible to identify the degree to which a particular work contributes to a particular output from a generative AI system? Please explain.

13. What would be the economic impacts of a licensing requirement on the development and adoption of generative AI systems?

14. Please describe any other factors you believe are relevant with respect to potential copyright liability for training AI models.

Transparency & Recordkeeping

15. In order to allow copyright owners to determine whether their works have been used, should developers of AI models be required to collect, retain, and disclose records regarding the materials used to train their models? Should creators of training datasets have a similar obligation?

15.1. What level of specificity should be required?

15.2. To whom should disclosures be made?

15.3. What obligations, if any, should be placed on developers of AI systems that incorporate models from third parties?

15.4. What would be the cost or other impact of such a recordkeeping system for developers of AI models or systems, creators, consumers, or other relevant parties?

16. What obligations, if any, should there be to notify copyright owners that their works have been used to train an AI model?

17. Outside of copyright law, are there existing U.S. laws that could require developers of AI models or systems to retain or disclose records about the materials they used for training?

Generative AI Outputs

If your comment applies only to a particular subset of generative AI technologies, please make that clear.

Copyrightability

18. Under copyright law, are there circumstances when a human using a generative AI system should be considered the “author” of material produced by the system? If so, what factors are relevant to that determination? For example, is selecting what material an AI model is trained on and/or providing an iterative series of text commands or prompts sufficient to claim authorship of the resulting output?

19. Are any revisions to the Copyright Act necessary to clarify the human authorship requirement or to provide additional standards to determine when content including AI-generated material is subject to copyright protection?

20. Is legal protection for AI-generated material desirable as a policy matter? Is legal protection for AI-generated material necessary to encourage development of generative AI technologies and systems? Does existing copyright protection for computer code that operates a generative AI system provide sufficient incentives?

20.1. If you believe protection is desirable, should it be a form of copyright or a separate sui generis right? If the latter, in what respects should protection for AI-generated material differ from copyright?

21. Does the Copyright Clause in the U.S. Constitution permit copyright protection for AI-generated material? Would such protection “promote the progress of science and useful arts”?  If so, how?

Infringement

22. Can AI-generated outputs implicate the exclusive rights of preexisting copyrighted works, such as the right of reproduction or the derivative work right? If so, in what circumstances?

23. Is the substantial similarity test adequate to address claims of infringement based on outputs from a generative AI system, or is some other standard appropriate or necessary?

24. How can copyright owners prove the element of copying (such as by demonstrating access to a copyrighted work) if the developer of the AI model does not maintain or make available records of what training material it used? Are existing civil discovery rules sufficient to address this situation?

25. If AI-generated material is found to infringe a copyrighted work, who should be directly or secondarily liable—the developer of a generative AI model, the developer of the system incorporating that model, end users of the system, or other parties?

25.1. Do “open-source” AI models raise unique considerations with respect to infringement based on their outputs? 

26. If a generative AI system is trained on copyrighted works containing copyright management information, how does 17 U.S.C. 1202(b) apply to the treatment of that information in outputs of the system?

27. Please describe any other issues that you believe policymakers should consider with respect to potential copyright liability based on AI-generated output.

Labeling or Identification

28. Should the law require AI-generated material to be labeled or otherwise publicly identified as being generated by AI? If so, in what context should the requirement apply and how should it work?

28.1. Who should be responsible for identifying a work as AI-generated?

28.2. Are there technical or practical barriers to labeling or identification requirements?

28.3. If a notification or labeling requirement is adopted, what should be the consequences of the failure to label a particular work or the removal of a label?

29. What tools exist or are in development to identify AI-generated material, including by standard-setting bodies? How accurate are these tools? What are their limitations?

Additional Questions About Issues Related to Copyright

30. What legal rights, if any, currently apply to AI-generated material that features the name or likeness, including vocal likeness, of a particular person?

31. Should Congress establish a new federal right, similar to state law rights of publicity, that would apply to AI-generated material? If so, should it preempt state laws or set a ceiling or floor for state law protections? What should be the contours of such a right?

32. Are there or should there be protections against an AI system generating outputs that imitate the artistic style of a human creator (such as an AI system producing visual works “in the style of” a specific artist)? Who should be eligible for such protection? What form should it take?

33. With respect to sound recordings, how does section 114(b) of the Copyright Act relate to state law, such as state right of publicity laws?  Does this issue require legislative attention in the context of generative AI?

34. Please identify any issues not mentioned above that the Copyright Office should consider in conducting this study.

It will be very interesting to see the responses.  I wonder if AI was used to help generate the questions.  I am sure someone will submit AI generated responses to the questions.  I do wonder about moral rights [fn. 38 in the document].

NFTs and Financing the Future of Potential Stars

NFTs are getting a lot of press.  For sure, NFTs have made a big splash in the art world.  I had an interesting conversation with a friend today about financing young athletes through the monetization of their right of publicity since the NCAA (and states) have begun allowing collegiate athletes to profit from their image etc.  One interesting issue concerns aspiring professional tennis players.  Often those players must make a decision between attempting to finance a shot at a professional career—a very expensive prospect, or go to college and see what develops.  Notably, as a friend mentioned to me, there are numerous excellent young tennis players who cannot finance the expenses to start a pro-career—expenses such as travel, coaching and trainer fees, hotel etc.  Many have to give up on a promising career because of a lack of funding.  Interestingly, this is a sport where economic class plays a big role—kids with less resources are unable to be developed and never get a legitimate shot at the pro-tour.  Allowing young players to monetize their right of publicity without damaging college prospects may be an interesting way for them to gather resources to support a professional career in the future and develop (maybe crowd-funding works).  Local businesses, family, friends and others could invest in young players early.  But, what if we could sweeten the deal?  What if we could use NFTs to create a market for, as an example, electronic playing cards for young athletes?  Can you imagine what the NFT “playing card” for an athlete such as a young Andre Agassi, Messi, Ronaldo, or Michael Jordan may be worth after they develop in the future?  There are a lot of details to sort out, but you can see how a market can develop creating an enormous amount of value and good (and yes, a potential for bad).  See here for Topps entry into the NFT market for trading cards: Topps Digital Launching Baseball Card NFTs (beckett.com).  What if we could expand the concept further?  There's no doubt that we are at a place where maximizing the potential of human resources is our greatest challenge.  This could be a way to help.  Extend it to brilliant children to finance their education?  IP and NFTs at their best?  It's an interesting thought experiment. 

Valuation of the King of Pop's Image and Likeness: Not That High

The U.S. Tax Court released an opinion concerning the dispute between the U.S. Government and Michael Jackson’s Estate concerning the valuation of his image and likeness.  Notably, the court stated that the estate valued his image and likeness at $3,078,000, and the government valued it at $161,307,045.  That’s quite a spread and you can imagine that the tax bill looks very different based on the valuation.  The court ultimately valued Jackson’s name and likeness at $4,153,912.  The decision is over 250 pages and chronicles Michael Jackson’s rise to fame as well as the problems.  Importantly, the decision raises how even when Michael Jackson was enjoying commercial success as an artist that licenses of his name and likeness did not do well at all.  The decision states:

Jackson’s personal fame meant that he received numerous requests for merchandising licenses for his “image and likeness.” To handle these requests, Triumph International, Inc.--an S corporation with Jackson as its sole shareholder --was incorporated in March 1984. In July 1984 Triumph entered into a five-year licensing agreement with Sullivan’s company, Entertainment Properties, for the use of Jackson’s image and likeness on a variety of products, including a line of clothing and fragrances. Under the agreement, Jackson was to receive $18 million upfront, with a potential total of $28 million. Jackson, however, was the only winner in this deal. He got the $18 million, but the merchandise didn’t sell, and the deal ultimately proved disastrous for the Sullivan family.

Based on Michael Jackson’s success at that time, one wonders if there were management issues concerning the exploitation of his image and likeness.  After Jackson was sued for child sexual assault, the court notes that his next tour, while successful, did not have dates in the United States and was not sponsored.  The court states:

The tour did have one merchandising agreement. Triumph granted Sony Signatures “the sole and exclusive right and license to utilize the Licensed Marks in connection with the manufacture and [distribution]” of merchandise, with “Licensed Marks” defined as “name(s), symbols, logos, trademarks, designs, likenesses and/or images of [Jackson].” Sony Signatures paid a $6 million advance, and Jackson also got nominal amounts from a few other licensees. Sales of tour merchandise were, however, significantly less than the advance, and Jackson had to repay Sony Signatures nearly $4 million.

The court concludes that:

We have to look for the value of each of Jackson’s assets as if “in the decedent’s hands at the time of its transfer by death.” Estate of Simplot, 249 F.3d at 1194-95. The value we put them as of the day he died is, we acknowledge, much less than their value much later under the Estate’s management. Branca, a friend of Jackson’s for many years, but a practical man forever, credibly testified that as popular singers age their prominence declines. Jackson, at the time of his death, was not behaving as if this were true; even a rational and undistressed hypothetical seller would have been hardpressed to avoid fire-sale prices. But Branca is right. Older stars’ “fans are less apt to buy tchotchkes.” Older stars do get less play on the radio. And according to all the expert witnesses, the same is true about even Jackson. They predicted that, like most popstars, Jackson would have a foreseeable surge in sales of his songs when he died, but a surge that would fade with time. They are right. Popular culture always moves on. There will come a time when Captain EO joins Monte Brewster and Terry Forbes as names that without googling sort of sound familiar, but only to people of a certain age or to students of entertainment history. And just as the grave will swallow Jackson’s fame, time will erode the Estate’s income. It resurrected and then sold what became its most valuable asset to Sony before trial. The value of what it has left, no matter how well managed, will now dwindle as Jackson’s copyrights expire and his image and likeness shuffle first into irrelevance and then into the public domain.

I am not sure “radio” time is that important anymore—like on an FM station, but see the licensing information mentioned above.  The full opinion has a lot of information on valuation and is available, here. 

US Collegiate Athletes may Profit from Name, Image and Likeness

The National Collegiate Athletics Association, an organization which essentially regulates collegiate athletics in the United States, has voted to begin the process of allowing student athletes to profit from the use of their name, image and likeness.  This vote was made in light of California’s recent decision to allow collegiate student athletes to be paid for playing.  Historically, collegiate student athletes were prohibited from receiving payment.  The NCAA press release states: 

Board of Governors starts process to enhance name, image and likeness opportunities

Each NCAA division directed to immediately consider modernization of bylaws and policies

October 29, 2019 1:08pm

In the Association’s continuing efforts to support college athletes, the NCAA’s top governing board voted unanimously to permit students participating in athletics the opportunity to benefit from the use of their name, image and likeness in a manner consistent with the collegiate model.

The Board of Governors’ action directs each of the NCAA’s three divisions to immediately consider updates to relevant bylaws and policies for the 21st century, said Michael V. Drake, chair of the board and president of The Ohio State University.

“We must embrace change to provide the best possible experience for college athletes,” Drake said. “Additional flexibility in this area can and must continue to support college sports as a part of higher education. This modernization for the future is a natural extension of the numerous steps NCAA members have taken in recent years to improve support for student-athletes, including full cost of attendance and guaranteed scholarships.”

Specifically, the board said modernization should occur within the following principles and guidelines:  

• Assure student-athletes are treated similarly to non-athlete students unless a compelling reason exists to differentiate. 
• Maintain the priorities of education and the collegiate experience to provide opportunities for student-athlete success. 
• Ensure rules are transparent, focused and enforceable and facilitate fair and balanced competition. 
• Make clear the distinction between collegiate and professional opportunities. 
• Make clear that compensation for athletics performance or participation is impermissible. 
• Reaffirm that student-athletes are students first and not employees of the university. 
• Enhance principles of diversity, inclusion and gender equity. 
• Protect the recruiting environment and prohibit inducements to select, remain at, or transfer to a specific institution.

The board’s action was based on comprehensive recommendations from the NCAA Board of Governors Federal and State Legislation Working Group, which includes presidents, commissioners, athletics directors, administrators and student-athletes. The group gathered input over the past several months from numerous stakeholders, including current and former student-athletes, coaches, presidents, faculty and commissioners across all three divisions. The board also directed continued and productive engagement with legislators. 

The working group will continue to gather feedback through April on how best to respond to the state and federal legislative environment and to refine its recommendations on the principles and regulatory framework. The board asked each division to create any new rules beginning immediately, but no later than January 2021.

“As a national governing body, the NCAA is uniquely positioned to modify its rules to ensure fairness and a level playing field for student-athletes,” NCAA President Mark Emmert said. “The board’s action today creates a path to enhance opportunities for student-athletes while ensuring they compete against students and not professionals.”

California to Raise Taxes Significantly?: What Impact on the Entertainment and Technology Industries?

In past posts, here and here, I discussed federal estate taxes in the United States and the right of publicity.  Celebrities at death may owe significant federal estate taxes based on a valuation of their right of publicity.  Generally, most states in the United States do not have an estate tax, including California.  However, that may change soon.  According to a recent update by Baker and McKenzie, a California bill creates a California estate tax in SB 378 (as well as a gift tax and generation skipping tax).  It would include an exemption of around US $3.5 million and has a cap at the level of the federal exemption of a single filer of US $11.4 million (the federal exemption).  This means that California would basically receive around 40% of every dollar between US $3.5 million and US $11.4 million.  Every dollar above US $11.4 million would be taxed by the federal government by 40%, but not by the state of California, according to the article.  This new tax would seem to impact workers in many important California industries, including the entertainment and technology industry.  Notably, the taxes collected by SB 378 would be used specifically to create a fund to benefit under-resourced people in California to achieve “'socio-economic equality and build assets among people who have historically lacked them.'”  


Moreover, the U.S. Supreme Court will also soon decide a case concerning the ability of a state to tax undistributed income from out-of-state trusts (see here and here).  

Whitney Houston's Tax Settlement on IP and Royalties

Accounting Today reports that Whitney Houston has settled with the tax authority in the United States, the Internal Revenue Service (IRS), concerning mostly the value of her intellectual property, particularly the right of publicity, and royalties.  The IRS's valuation was around $22 million.  The parties settled for $2 million.  Michael Jackson's estate has been embroiled in a similar problem with the IRS, here. For more on valuation of the right of publicity for estate tax purposes, see Sara Zherhi's article on the subject in Harvard's Journal of Sports and Entertainment Law (be sure to check the new tax law in the United States).  

Will Minnesota Keep Prince's "Purple Rain" Coming? Minnesota Rushes to Pass Post-Mortem Right of Publicity

In a recent blog post, I discussed the post-mortem right of publicity in connection with the Michael Jackson and Robin Williams estates.  As has been widely publicized, Prince recently passed away with apparently little to no estate planning.  While he was supposedly a savvy musician and businessman, he was like many—likely unwilling to contemplate that he may die and, thus failed to do any estate planning. 

Interestingly, the State of Minnesota (Prince’s domicile) is a state that does not have a statutory right of publicity.  Ordinarily, the right of publicity protects a person’s right to commercially exploit their likeness, name, or image.  The right of publicity is grounded in a right to protect a person’s privacy and to encourage people to develop valuable personas.  The Minnesota legislature is rushing to pass a statutory post-mortem right of publicity before the end of their legislative session (in two weeks). 

The interesting question is why the legislature is moving so fast.  The stated reason appears to be that this is prompted by Prince’s death, and more generally that a post mortem publicity right needs to be recognized.  The legislature could be moving quickly because they want Prince’s heirs to keep operating in Minnesota.  Related to that issue is the fact that Minnesota is apparently one of the few states in the United States to have a state estate tax. 

From a state taxation perspective, the death of a wealthy individual is fascinating.  The New York Times recently published an article about how one wealthy taxpayer moved his personal and business domicile from New Jersey to Florida.  According to the article, this one billionaire’s move would “put the entire state budget at risk.”  So, what happens when a very wealthy individual dies, particularly a person whose livelihood is based on the creative arts with substantial remaining value (As the Wall Street Journal notes, Prince died young so he didn't outlive his biggest fans who may be willing to pay--and pay for a longer time.)?   Of course, that person’s business interests will likely continue, but the question is who gets to tax it.

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). 

Professor Rothman's Right of Publicity Resource

The likeness and name of a celebrity can be very economically valuable.  Notably, Michael Jordan recently disclosed in a trial concerning the unlicensed use of his likeness and name that he made $100 million in sponsorship deals in one year.  Jordan was successful in that suit with a jury awarding him almost $9 million in damages.  In the United States, the right of publicity is one of the legal rights used to protect one's likeness and name.  The right of publicity is also a matter of state law and the scope, duration and existence of the right varies from state to state.  So, there are potentially 50 different state laws concerning the right.  In a 2011 article titled, "Why a Federal Right of Publicity Statute is Necessary," Kevin L. Vick and Jean-Paul Jassy make convincing arguments for why a federal right of publicity law should be passed and that it should preempt state law.  Notably, one significant concern is the breadth and length of some states' right of publicity laws, particularly in light of First Amendment concerns.  The scope of the problem with patchwork state law can be seen elegantly with Loyola Law School's (Los Angeles) Professor Jennifer Rothman's new right of publicity website: Rothman's Roadmap to the Right of Publicity. The website helpfully sets forth the law impacting the right of publicity in all 50 states and includes commentary concerning the right.  Take a look for yourself, here.