Historically, the offshore world has been known largely for its financial services industries.  In recent years, many offshore financial  centres have been looking to diversify their economic portfolios. In this regard, Guernsey’s  decision to diversify its portfolio by establishing a cutting-edge intellectual property regime is  proving to be well-founded.

In 2002, Guernsey’s government approved a pivotal policy document. This proposed the creation of an  innovative suite of intellectual property (“IP”) legislation. The vision was that Guernsey should  be recognised as a centre of excellence for the development and management of intellectual property  rights (“IPRs”).

In this Article, we outline the IP regime in Guernsey generally.  Other Red Articles deal  specifically with the protection of different types of IPRs.

About Guernsey

The Bailiwick of Guernsey comprises the islands of Guernsey (with the adjacent islets of Herm and  Jethou), Alderney and Sark, situated in the English Channel and close to the coast of France. Guernsey is a self- governing Crown Dependency with its own legislature, known  as the States of Deliberation.  Alderney and Sark have their own legislative assemblies. The  respective Islands’ parliaments have wide legislative competences, although some types of primary  legislation require to be sanctioned by Her Majesty in Council before becoming law.

The Genesis of Guernsey’s IP Regime

The 2002 policy document referred to above recommended that Guernsey’s legislature adopt a series  of legislative measures to transform the Island into a modern cutting- edge IP jurisdiction.  Guernsey has passed the basic cornerstone law which have enabled it to become TRIPS compliant.  The  cornerstone IP laws have drawn on a comprehensive review of other IP jurisdictions so that, for  example, Guernsey’s legislation for database rights have been drafted to address perceived dilution  of the European database right as a result of judicial interpretation.i

Guernsey’s IP regime is contained in primary and secondary legislation. The relevant primary  legislation was enacted in The Intellectual Property (Enabling Provisions) (Bailiwick of Guernsey)  Law, 2004. This Law authorised Guernsey’s legislature to introduce secondary legislation (in the  form of ‘Ordinances’), for individual IPRs on an incremental basis, without further reference to Her Majesty in Council.

The first output of secondary legislation came into force on 1 January 2008. Ordinances are now in  force in relation to copyright, database rights, performer’s rights, registered designs,  unregistered designs, trade marks, patents, image rights and registered plant breeders’ rights.

The umbrella-like structure of Guernsey’s enabling legislation is advantageous. Not only does it  allow Guernsey to enact Ordinances very swiftly, it permits Guernsey maximum flexibility to  introduce future amendments so as to keep pace with technological advances.

An Intellectual Property Office for Guernsey, headed by the Intellectual Property Registrar, opened  on 1 June 2006. More information about the Intellectual Property Office and relevant contact  details can be found on the Intellectual Property website at  http://www.guernseyregistry.com/ipo.

Legislation which has been enacted to date includes:

  • The Copyright (Bailiwick of Guernsey) Ordinance, 2005;
  • The Database Rights (Bailiwick of Guernsey) Ordinance, 2005;
  • The Performers’ Rights (Bailiwick of Guernsey)Ordinance, 2005;
  • The Registered Designs (Bailiwick of Guernsey) Ordinance, 2005;
  • The Unregistered Design Rights (Bailiwick of Guernsey) Ordinance, 2005;
  • The Trade Marks (Bailiwick of Guernsey) Ordinance, 2006;
  • The Unregistered Design Rights (Semiconductor Topographies) (Bailiwick of Guernsey)  Ordinance, 2006;
  • The Registered Plant Breeders’ Rights (Bailiwick of Guernsey) Ordinance, 2007;
  • The Registered Patents and Biotechnological Inventions (Bailiwick of Guernsey) Ordinance  2009; and
  • The Image rights (Bailiwick of Guernsey) Ordinance, 2012.

Why Hold IPRs in Guernsey?

From a business perspective, Guernsey’s corporate tax regime is advantageous for holding IPR’s in a  tax neutral environment. On a broader level, Guernsey’s sophisticated infrastructure includes a  suite of corporate vehicles which offer enhanced business flexibility as compared to other  jurisdictions. Trusts Guernsey has long been a prime jurisdiction for the formation and management of private trusts, which can be useful tools in the creation of  off-balance-sheet structures. In this regard, Guernsey introduced new legislation in relation to  trusts in 2007 which allows a much more flexible approach to holding assets in a trust structure. 

Protected Cell Companies The protected cell company (“PCC”) was pioneered in Guernsey in 1997. A PCC is a single legal entity. However, the company is made up of a  core and a number of ring- fenced, protected cells. The advantage of the PCC lies in the  segregation of assets and liabilities – the assets of one cell will not be available to creditors  of other cells in the event of insolvency. A PCC structure is therefore ideally suited for entities  involved in product development, in view of the scope for isolating and managing R&D and product  development risk.

Incorporated Cell Companies

In 2006 Guernsey introduced legislation to create a similar structure known as the incorporated  cell company (“ICC”). As with a PCC, an ICC will have cells. However, each cell is a separately  incorporated and distinct legal entity.

Why might one use an ICC rather that a PCC? The ICC structure may allow the cells to exploit their  status as independent legal entities, for example by the cells contracting with each other, which  might be useful for the purpose of licensing agreements.

Conclusion

Guernsey offers a unique environment for IP protection and exploitation, compared to other offshore  and indeed some onshore jurisdictions. With TRIPS cornerstone legislation and recognition in place,  Guernsey’s attention can now turn to the enhancement and protection of ground breaking IPRs.