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Right of Publicity as an Asset in Bankruptcy?

posted by Melissa Jacoby

A quick post to announce that intellectual property scholar Jennifer Rothman has just published an article that engages with the bankruptcy treatment of the "right of publicity." Painting with the broadest brush, the piece questions the alienability of an identity-holder's right of publicity more generally, and concludes creditors should not be entitled to "own (or control)" a debtor's right of publicity (p.236). For the bankruptcy and commercial lawyers reading this post, or courts confronting questions of creditor entitlement to a debtor's right of publicity, the article contains references to recent court decisions of potential relevance (pp. 199-200) in addition to important arguments on these questions. According to Rothman, there still is no published caselaw explicitly holding that creditors are entitled to the value of a bankruptcy filer's right of publicity. (If Credit Slips readers know of examples that did not result in published decisions, I would welcome a comment below, or a note to [email protected]).

Once upon a time, Diane Zimmerman and I offered a different assessment at the annual meeting of the National Conference of Bankruptcy Judges and in a resulting article. We did not celebrate the state law treatment of the right of publicity as an alienable property interest. But, taking the world as it existed, we concluded that the right of publicity should be treated as an asset in the rightholder's bankruptcy and that, on balance, it probably shouldn't be protected by an exemption. Our analysis elicited a range of reactions, including a handful of queries from creditors of famous people, lawyerly whispers in the ear to explain the reluctance of creditors to raise this issue, and a critique by the late Harvard professor David Westfall and co-author David Landau, who has since joined the legal academy. But, back to Rothman's thesis, I am sympathetic to the notion that an identity-holder's rights of publicity should be conceptualized as less alienable all around, which in turn would affect the bankruptcy and debtor-creditor calculus. 

As an aside, Rothman's article also introduced me to the work of property scholar James Penner, who offers a vivid observation about property rights and bankruptcy that Credit Slips readers will likely appreciate:

Loads of people are happy to claim that their rights to their kidneys or their right to vote are property rights, thinking no doubt that all of their valuable entitlements are their property. Or, if they embrace Lockean ideology, they may think that property rights are somehow better, stronger, or more fundamental than other rights. Until, that is, the consequences of bankruptcy for one's property rights are mentioned, and then the air is riven by the screaming clutch of an argument thrown into reverse.

-- J.E. Penner, Misled by 'Property', 18 Can. J. L. & Jurisprudence 75, 76 (2005). 



I can see the argument for exempting the right of publicity. I cannot see the argument for exempting the proceeds of the right to publicity.

It's just like kidneys. The bankruptcy court cannot order somebody to sell a kidney, although I'm sure that such an order is well within the spirit of BAPCPA. But if kidneys could be sold, the creditors would have a good argument that they're entitled to the proceeds.

I see an analogy with the problems that often surround bankruptcy sale of a debtor's closely held owner-operated business, where a non-bankruptcy sale would almost inevitably include non-competition provisions. If I control future exploitation of my fame, part and parcel of any lucrative contract will certainly be that I cannot trash the folks who are paying me. When hostile creditors buy my "right of publicity", can they restrict my free speech rights to tell the world that I disagree with what they are doing with it?

Your style is so unique compared to many other people. Thank you for publishing when you have the opportunity,Guess I will just make this bookmarked.

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