The laws relating to intellectual property rights (IPRs) in Guernsey are currently being radically changed and broadened to allow the jurisdiction to provide a more sophisticated environment for the use and protection of IPRs. The new legislation covers the protection of copyright, database rights, performers rights, registered designs, trade marks, and unregistered design rights.

As IPRs are increasingly a dominant form of economic asset, with the growth of information based companies and e-commerce, their value requires legal protection and the income streams generated by them require tailored and efficient structures.

Guernsey: Stable and Fiscally Efficient

With the implementation of the new laws, Guernsey will place itself at the forefront of the offshore jurisdictions in the IPR sector by providing not only for increased protection for existing IPRs registered here, but also for new business. Guernsey already has the necessary legal and financial infrastructure and services in place to support this market, and combined with it being a fiscally efficient jurisdiction in which to do business and hold intellectual property assets, this will lead to the development of new structures and products.

Sound Financial Planning

The Guernsey fiscal regime is very advantageous compared to many other jurisdictions as there is no capital gains tax, no VAT, and low corporation and income tax. It is proposed that corporation tax rates will change from 2008 to zero. Guernsey also has a stable economy, is very close to London and other major European capitals and is in the GMT time zone. This makes it an ideal location for IPRs and their use internationally, and should be of particular interest to e-commerce businesses, businesses using databases, and franchising/licensing concerns where royalties or other cash flows can be well managed.

The New Laws

The current position is that any trademark registered in the UK can be registered in Guernsey on application to the court and the mark is then kept on an independent register of trademarks. This type of passport system will be replaced from 1st June 2006 with an independent Guernsey registration system This Guernsey registration will then be able to be utilised as a first registration to make further international registrations (if required) once Guernsey has acceded to the relevant international treaties and conventions. As certain types of right may only be capable of being protected and recognised as personal property in Guernsey, in some cases Guernsey is likely to be the only point of IPR registration.

Guernsey also plans a continuous development of IP legislation in order to keep pace with new and emerging technologies which may provide structuring and intellectual property protection opportunities which are not available in other jurisdictions. This already includes, for example, a set of subsidiary legislation giving the ability to protect and structure rights relating to semiconductor topographies, databases, performances, and designs. It is envisaged that subordinate legislation will also extend to image rights (for example in someone's physical appearance or voice), plant varieties, biotechnology, internet IPRs (such as distribution, rental, rights of public communication, economic rights in "unfixed" performances, broadcasting and encryption).

Protection and structuring of image rights, for example, may be of considerable benefit to celebrities wishing to organise licensing arrangements for the use of their names, appearance or voices for commercial benefit.

The most important part of the new legislation relates to the classification of intellectual property rights as personal or moveable property under Guernsey law, thereby making them capable of transmission, licensing and transfer by some form of contract or will whilst effectively remaining offshore. Previously the right in a trademark or design in Guernsey was equivalent to a simple registration reflecting the right, and nothing more. This has given rise to only limited use of intellectual property structures in Guernsey in the past.

The New Legislation

The new legislation is available on the States of Guernsey website (http://www.gov.gg/ccm/navigation/government/law-officers/legislation/intellectual-property/) and includes:

• Intellectual Property (Enabling Provisions) (Bailiwick of Guernsey) Law, 2004
• Intellectual Property (Enabling Provisions) (Bailiwick of Guernsey) Law, 2004 (Commencement) Ordinance, 2005
• Intellectual Property (Office of Registrar) (Bailiwick of Guernsey) Ordinance, 2005
• Copyright (BOG) Ordinance, 2005
• Database Rights (BOG) Ordinance, 2005
• Performers' Rights (BOG) Ordinance, 2005
• Registered Designs (BOG) Ordinance, 2005
• Trade Marks (BOG) Ordinance, 2006
• Unregistered Design Right (Semiconductor Topographies) (BOG) Ordinance, 2006
• Unregistered Design Rights (BOG) Ordinance, 2005

Summary

The new IPRs legislation provides a number of opportunities for businesses that extensively use IPRs such as e-commerce and franchises and consideration should be made to registering IPRs in Guernsey.