"Wrote this, sang that, endorsed the t-shirt...": A legal insight into commercialising IP assets

Article first featured in Music Week, published August 2015

Taylor Swift is one of the most successful recording artists in the world and a role model for many, but some of her more recent attention from the press highlights another side to her - a business-savvy appreciation for protecting and commercialising her music and image. Her attempts to register various phrases as trade marks, together with her more recent battles with the technology giants Apple and Spotify over licensing terms, show an increased awareness of what is becoming an increasingly prominent issue for artists – protecting and exploiting the intellectual property (IP) rights that underpin their work, image and brand.

Artists’ income falls into two broad categories – income generated from the music itself (i.e. downloads, streaming, synchronisation rights and live performances) and income arising from commercial opportunities in ancillary industries (i.e. merchandising rights and endorsement/sponsorship opportunities.).  The decision as to which sources an artist chooses to explore, and to what degree, will be dictated to some extent by their own underlying artistic motivations and wider industry career aspirations – you can’t imagine David Bowie launching a range of action figures – but for many, the wider commercial opportunities can be just as lucrative as the music, if not more so.

It’s widely acknowledged that the shift from physical sales to downloads and streaming has drastically changed the playing field for artists. Whereas before an artist would get an appreciable slice of every £14.99 CD, now – with the going rate for streaming royalties  being between 0.1p and 0.5p – it can take 15,000 streams to generate that cover price. So although an established global artist with a large back-catalogue can still make a healthy living from streaming, the same cannot be said for up-and-coming or niche musicians and, as a result, the pressure to diversify into other commercial activities is more acute than it used to be.  Other licensing revenue (such as licensing music for adverts, television and film sound tracks) can continue to be a lucrative for artists, though by the very nature of the industry, competition is tough, a breakthrough never guaranteed, and some songs simply not suitable.

Even when royalties are received, they can often be shared in multiple directions. Music is a collaborative business, where a single song could include input from multiple songwriters, lyricists, musicians and samples. All of which can complicate the IP position. There have been several high-profile fall-outs between musicians that have ended up in court over the years, from Spandau Ballet to Procul Harem’s Whiter Shade of Pale and, most recently, Robin Thicke and Pharrell Williams being ordered to pay £7.3m to the estate of Marvin Gaye or infringing his copyright when writing Blurred Lines.

That isn’t to say that artists should be focused on squeezing every penny they can out of their work.  In fact, some have chosen (with mixed success) to forgo income from royalties in order to attract new audiences and maximise commercial opportunities. McFly famously gave away free copies of their Radio:ACTIVE album with a Sunday newspaper back in 2008, whilst just last year U2’s album was automatically uploaded for free onto consumers’ iPhones.

For those artists that do decide to venture into the world of merchandising and branding, it is not an entirely straightforward exercise. Unlike in the US, there is no such thing as “image rights” per se in the UK, but rather a range of other rights which collectively allow artists to police the use of their image. Trade marks can be a useful tool for protecting an artist’s name or logo, particularly in a merchandising or wider retail context.  Whilst it won’t necessarily always be appropriate for every artist, it’s certainly taking off at the top end, with the likes of Pharrell Williams and Ed Sheeran registering their stage names, and the Rolling Stones, their iconic “Forty Licks” album logo, for a wide range of music and clothing-related goods and services.

Aside from registered trade marks, the law of “passing off” does offer protection for well-known artists against the unauthorised use of their image; most recently when Rihanna prevailed in a court room battle against Topshop. Whilst the high street retailer held a licence to use the copyright in a photo of Rihanna, the artist had not authorised its reproduction on a range of clothing and successfully argued that the unauthorised use had undermined her goodwill elsewhere in the fashion industry.

In every artist’s musical journey, you can be fairly sure that, at the start, standing in front of the mirror with a tennis racket guitar, they are not thinking about trade mark registrations, merchandising contracts and collective licensing arrangements. And so it should be, because music, more than any other medium, relies on enthusiasm, talent, passion and optimism. However, it’s an unavoidable fact that it’s no longer “all about the music” and that awareness of IP is now an equally important requirement for a prosperous career in the industry.

This article was written by Tom Lingard, Partner and Henry Milas, Associate at Stevens & Bolton LLP

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Tom Lingard , Henry Milas

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