The recent death of Prince points up an intriguing valuation issue known as the “right of publicity.” This is a form of intellectual property that covers an individual’s likeness, including his or her name, image, signature, voice, and so on. Of course, there could be a great deal of value when it comes to a celebrity.

Vexing problem: An article in Trusts & Estates on the Prince situation says that there is a lack of guidance and precedence for estate taxation of a posthumous right of publicity. Also, determining a date-of-death fair market value can be complex, so there can be wide discrepancies. For example, Michael Jackson’s estate valued his name and likeness at $2,105, but the IRS says the value is $434 million! The IRS and the Jackson estate are scheduled to appear before a Los Angeles Tax Tribunal in 2017 to settle their dispute, says the article.

The first case that allowed for individuals to maintain their right of publicity seems to be the Zacchini case that went to the U.S. Supreme Court (Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562 (1977)). That case involved newsreel coverage of a performer who shot himself out of a cannon. He claimed that the news exposure diminished his ability to capitalize on his skills. But a person doesn’t have to be a celebrity or of the same caliber as a human cannonball to get caught up in this issue. A kindergarten teacher sued Nestle over the unauthorized use of his image on labels of Taster’s Choice coffee. A jury awarded him $15.6 million, which represented 5% of the profits on the coffee plus lost licensing fees (the decision was reversed and the parties later settled).

What to do: Of course, the valuation of the right of publicity involves techniques and methods common to the valuation of other IP assets, such as determining royalty rates, examining cash forecasts, choosing a discount rate, and so on. But those who may be experts in other areas of IP valuation may want to consider consulting with someone who works with the right of publicity regularly to help ensure that the valuation is defensible.