CHARACTER MERCHANDISING: A LEGAL PERSPECTIVE

Picture Courtesy: http://blog.ipleaders.in/wp-content/uploads/2014/10/the-world_s-top-10-best-minions-inspired-merchandise-9.jpg

This article was written by Ritisha Mukherjee, a student of ILNU. 

INTRODUCTION

Unprecedented growth in the advertising industry over the years has highlighted how the reputation of famous real and fictional characters can create awareness and spread popularity of goods and services. New methods of exploiting another’s reputation for commercial gain have been manifested by recent marketing trends.[1] Character merchandising is a marketing technique using which goods and services resembling popular fictional or real characters are made for attracting customers. In other words, it is the commercial exploitation of a famous character or personality using their well-recognised international appeal. Fictional characters are often derived from various literary works, cartoons, cinematographic works or artistic works. Real characters are used more in the fields of marketing, films, show businesses and sporting activities. In many situations, for example in the merchandising of Spiderman or Harry Potter T-shirts and toys, the image of the character works as the only reason for the consumer to purchase the product.[2] For instance; where a product such as ‘Kylie Minogue’s Beauty Cream is being sold, the consumers would have a preconceived notion in their minds about the implied guarantee and worth of the product.[3] The concept was put forward by Walt Disney who upheld the idea of selling t-shirts, mugs, badges and other products with Mickey Mouse, Minnie Mouse and Donald Duck in the 1940s.[4] It was then that character merchandising expanded from toys to clothing and other products, thereby extending the concept of merchandising by including character merchandising as its integral part.[5] Ever since, it has gradually grown to attain a stage where the cartoon character ‘Ginger Meggs’ is estimated to be worth up to two million dollars in retail sales in Australia with eighty products being made under licence.[6] ‘Strawberry Shortcake’, a scented doll created by a greeting card company made $US 100 million from its first year sales through 600 products based on its character.[7] Furthermore, ‘Dr. Snuggles, an Australian cartoon character was used in marketing a wide variety of products like live theatre, radio, newspapers, magazines, books, tapes, food etc.[8]

Hence, one way of expressing the concept of Character Merchandising would be to state that it is an advertising technique that uses the popularity of the character concerned as a vehicle for selling the products.[9]

TYPES OF CHARACTER MERCHANDISING

Over the years, character merchandising has evolved from a secondary source of commercial exploitation used by the entertainment industry to that of a primary tool for businesses to make revenue. For rightly comprehending the scope of character merchandising, its versatility must mandatorily be studied.

• Fictional and Cartoon Character Merchandising

Cartoon characters are the most popular merchantable characters ever created.[10] They also prove to be the oldest, being used by the Walt Disney Studios in the 1930s.[11] Indian examples inter alia include Mickey and Minnie Mouse on Cadbury products, Spiderman apparel.

Literary works, the largest source of cartoon and fictional characters have given birth to Pinnochio, Peter Pan, Garfield, Archie and Alice of Wonderland among others. Tintin created by the Belgian cartoonist Georges Remi gained wide popularity after its first publication in 1929 in a Belgian newspaper and was subsequently made into movies and television shows as well as Belgian postage stamps and Euro coins.[12] The most popular merchantable character being birn from artistic works is Da Vinci’s Mona Lisa which gained world-wide fame and was subsequently used in apparels. Cinematograph films have also helped character merchandising with popular movie characters like Kung-fu Panda and Nemo.

• Celebrity Merchandising

Celebrity Merchandising are of two types; Personality Merchandising and Image Merchandising. ‘Personality Merchandising’ or ‘Reputation Merchandising’ refers to the use of famous persons, mostly celebrities in marketing. As a result of such use, consumers instantly recognise the personalities used and relate to the respective products on one hand while on the other; they tend to buy those products more which form parts of celebrity lifestyle.[13] It includes using the essential attributes of celebrities, like his name, image, voice, or other personality features to promote goods and services in the market.[14] ‘Sach’, a brand named after Sachin Tendulkar, ‘Sauravs’, a restaurant in Kolkata named after Saurav Ganguly, perfume by the name of David Beckham are popular examples of Personality Merchandising.

• Image Merchandising

Image merchandising is an instance where characters of fictional films or television shows are played by real actors in the marketing and advertising of goods and services. It is considered to be a hybrid of Fictional Character Merchandising and Personality Merchandising.[15] Often, visualisation of fictional characters is done by actors playing out the respective roles in cinematographic works. In such cases, the identification of the character is done by combining the signature traits of the real life person as well as its fictional counterpart. Through such merchandising, the public can easily relate to their favourite characters being portrayed in a particular manner. Such examples include Harry Potter being played by Daniel Radcliffe, James Bond being played by various actors, Captain Jack Sparrow played by Johnny Depp etc. Such situations create a dual reputation for individuals whereby the same person develops a reputation of his own as well as carries the reputation of the character portrayed by him.

LEGAL ISSUES

Like real persons have personality rights, fictional characters have property rights. With respect to the legality of the concept of character merchandising, Jan Klink, in his book, upheld the vulnerability involved with the practice and said “apart from the risk of unfavourable media coverage, free riders ‘cash-in’ and appropriate the celebrity’s identifiers such as personality features and accessories in order to promote their own goods or services: names, voices and likenesses are hijacked for advertisements; look-alikes and sound-alikes substitute for stars unwilling to lend their image to certain products heir portrait”.[16]

Since Character Merchandising deals majorly with celebrities, the concept of personality rights gains importance. Furthermore, it is the inherent right of every person to control the commercial use of his or her identity.[17] Celebrities would be legally entitled to their right to privacy which would tend to get violated on commercial application of their personality traits. In spite of the identity and personality of every person being a merchantable property, the right of determining the extent of commercial exploitation vests entirely with the individual himself. Hence, presupposing that any act of infringing such rights would amount to unfair trade practice, the public intrusion into private life through unauthorised usage of individuals’ traits would be a violation of their fundamental right to privacy. However, the popular view in contradiction to the same highlights how celebrities by virtue of being a public figure lose their right to privacy to an extent by consenting to have a public life.[18] The debate goes on when proponents of the personality rights contend that there being a strict distinction between a celebrity’s public life and his likeness being used for commercial exploitation, they should have a choice to decide whether or not to allow promotion of products and services using their reputation and goodwill.

Protection under copyright law does not apply to ideas or concepts, but protects only the form of expression of such ideas whereby the author of an original work has rights to exploit his characters in any matter he deems fit. The authorship rights of producers to exploit images from the film conflict with the individual rights of the celebrities pertaining to the latters’ claims of violation of publicity rights.[19] It was seen in the case of King Features Syndicate Inc. v Kleeman Ltd. that the plaintiff, who had the copyright on the cartoon character ‘Popeye’, sued the defendants who were selling ‘Popeye’ dolls and brooches without authorisation or licence. The court granted an injunction on grounds of copyright infringement.

According to section 29 of the Indian Trademark Act 1999, a registered trademark owner can prevent others from using a deceptively similar or a highly identical mark on goods and services without permission of the owner of the trademark. Furthermore, an unregistered mark being used by a third party on goods and services entitles the owner to initiate an action for passing-off on establishment of goodwill in the trademark, misappropriation of the defendant and loss of trade or damage to goodwill faced by the plaintiff as a result.[20] There being no definite law to protect commercial exploitation of fictional characters, celebrities are entitled to protection under the Trademark Act. The Delhi High Court validated the transfer of trademark on Daler Mehndi’s name by the singer to his company, thereby holding that the act of the defendant in selling dolls that look and dance like Daler Mehndi was an act of passing off;[21] thereby recognising an unregistered likeness of a celebrity’s character.

No country has enacted express legislation solely on the protection of character merchandising, nor does there exist an international treaty on the same.[22] In India, the only available remedies are constitutional rights pertaining to publicity and the common principle of passing-off. Unauthorised use in India hence faces responses like that of Amitabh Bachchan’s twitter post attacking a tobacco manufacturer who used his voice for promotion of the band without his permission; or that of Rajnikant’s legal notice published in leading newspapers threatening legal actions against unauthorised use of his persona.[23] Nevertheless, depending on the form of legal protection available in different countries, character merchandising is guided by civil sanctions like injunctions and compensatory measures. Furthermore, owners also hold right to sue or physically seize the concerned intellectual property from unlawful possession. Criminal sanctions can also be imposed in some countries in the form of fine or imprisonment.

The Lorimar case[24] is a landmark decision on character merchandising, wherein the respondents were clothing manufacturers and proprietors of a restaurant that used words also depicted in the television series ‘Dallas’ of South Africa. The applicants who were promoters and distributors of films asked the court for an interdict so as to restrain the respondents from such usage of characters, persona or concepts depicted in the ‘Dallas’ series.[25] Refusing the application for the interdict, the court held that although the respondents were earning benefits using the popularity of ‘Dallas’, it would not in any way mislead the public so as to confuse them about the producers of the television show being same as those of the clothing manufacturers or restaurant proprietors.

In the famous World Cup case, FIFA, the applicant alleged that the respondents had tried to extract royalty payments from FIFA’s sponsors and sub-licensees inter alia by obtaining trade-mark registration in 1969 for clothing and sports equipment; thereby seeking an interdict on grounds of passing-off. FIFA contended that the respondent had tried to indicate a relationship between his goods and the official organisers of the world cup tournament who had legally obtained from FIFA the right to use the World Cup trade-mark on their items; and had hence intended to deceive the public at large. The court upheld that since the event under consideration was the World Cup, the public at large was undoubtedly involved intrinsically, and hence, the use of the insignia symbolising the relation between the clothing and sports equipment would highlight a glaring trade connection between the events. The goodwill of the applicants combined with the involvement of FIFA in character merchandising was bound to create in the public’s mind a link between the products and the producers. Hence, the court granted the applicants an interdict on grounds of passing-off, thereby restricting the respondents to stop selling goods and services with the said World Cup logos in dispute.

In the famous Indian case of Raja Pocket Books v Radha Pocket Books [26], the Delhi High Court decided on the copyright ownership over the character of Nagraj who was published in green snake-like body stocking in the plaintiff’s comic series of Pocket Raja Books. The Defendant’s Radha Pocket Books started publishing comics using a similar serpentine character called ‘Nargesh’ who highly resembled Nagraj. The Delhi High Court held that the copyright of Nagraj rested with the plaintiff and the defendant’s attempt to advertise any similar character through stickers, posters or any other materials would amount to infringement of the plaintiff’s copyright.

RESOLUTION

In absence of any umbrella legislation in the country to tackle issues arising from character merchandising activities, a dispute resolution model may be resorted to for adjudging the ensuing problems.[27] However, in cases of cinematographic films where celebrities play a significant role of character very well-known to the public, for example Harry Potter, James Bond, Spiderman, Batman, etc, the producer of the cinematographic film should have permission to merchandise stills from the film that depict the celebrity.

For adjudicating disputes arising from character merchandising, the nature of the merchandising is first to be determined. In case of fictional or cartoon character merchandising, the rights are to vest exclusively with the copyright owner of the character if there exists no assignment of intellectual property rights, or licencing or any other contracts. In cases of personality based merchandising, the merchandising rights are to belong exclusively to the celebrity. For image merchandising, the copyright owners are to have exclusive rights to merchandise stills from intellectual properties such as cinematographic films.[28]

CONCLUSION

Character Merchandising is a concept that has been used in marketing goods and services for many years; being first recognised by the toy industry as a popular marketing tool.[29] Although Santa Claus is recorded as the a toy dating back to the nineteenth century, the works of Beatrix Potter made in the early twentieth century provide as the first major example of character merchandising.[30]

The scope of character merchandising being considerably big, the existing intellectual property regime to fails to protect the entire legality of the concept or safeguard its vulnerability. Although the trademark law provides protection for a name or a particular image, and the copyright law protects an individual’s creations, but they fail to protect the reputation of a person or fictional character from unauthorised commercial exploitation.

Nevertheless, merchandising a popular character can turn out to be highly profitable. The character merchandising industry has developed rapidly owing to ‘wide and rapid degree of public recognition now made possible by mass media’.[31] India has a flourishing market for merchandising whereby character merchandising for kids has fetched unprecedented results. Indian comic characters also have ample scope of commercial exploitation.

Evidently, in light of the positive aspects of the concept of character merchandising, its practice has to be maintained in keeping with the balance between the necessity to preserve competition on one hand and on the other, maintain protection of individual rights pertaining to intellectual property in spite of character merchandising, for “Good merchandising will always take the consumer from deciding whether that are going to buy which are they going to buy”, said Steward Goldsmith, the Vice President of Sales for Todson[32].

[1] Character Merchandising: Legal Protection in Today’s Marketplace, Jill McKeough, Heinonline, 7 U.N.S.W.L.J. 97 1984

[2] Principles for the Protection of Character Merchandising in Cyprus, Archilles C. Emilianides, available online at https://www.academia.edu/4050708/Principles_for_the_Protection_of_Character_Merchandising_in_Cyprus last visited on 03.05.2017

[3] Id.

[4] Character Merchandising in India, Nikita Hemmige, September 17, 2014.

[5] Exploiting Celebrity: Character Merchandising and Unfair Trading, Andrew Terry, 12 U.N.S.W.L.J. 204 1989, Heinonline

[6] Supra 1

[7] Id.

[8] Id.

[9] Id.

[10] Character Merchandising, Nishant Kewalramani, Journal of Intellectual Property Rights, Vol 17, September 2012, pp 454-462, available online at https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwjM763vn6rLAhXIj44KHSwYBpcQFggbMAA&url=http%3A%2F%2Fnopr.niscair.res.in%2Fbitstream%2F123456789%2F14770%2F3%2FJIPR%252017%285%29%2520454-462.pdf&usg=AFQjCNFJvzrSP6yOqLvcnM2Ppfh7nHyVAw&bvm=bv.116274245,d.c2East accessed on 03.03.2017

[11] Id.

[12] Id.

[13] Id.

[14] Character Merchandising and Personality Merchandising: The Need for Protection – An Analysis in the Light of UK and Indian Laws; Manoranjan Ayilyath, December 4, 2011, Entertainment Law Review (Sweet & Maxwell, London), Vol 23, Issue 3, 2012 , available online at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1969820es on 04.03.2017

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] D. M. Entertainment Pvt. Ltd. v Baby Gift House and Ors., MANU/DE/2043/2010

[22] Character Merchandising, Report by the International Bureau, World Intellectual Property Organisation, Geneva, December 1994, available online at https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwiziYjYo6rLAhWIBI4KHfhqBj0QFggcMAA&url=http%3A%2F%2Fwww.wipo.int%2Fcopyright%2Fen%2Factivities%2Fpdf%2Fwo_inf_108.pdf&usg=AFQjCNG1hxbnzSoJBaQw9EZkG4FvWl8ZMA&cad=rja last accessed on 03.03.2017

[23] Id.

[24]Hall v Lorimar, [1993] EXCA Civ 25, [1994] IRLR 171

[25] Supra 22

[26] ‘Nagraj Case’, 1997 (40) DRJ 991

[27] Supra 10

[28] Id.

[29] Supra 5

[30] Id.

[31] Id.

[32] Savvy Marketing: Merchandising of Intellectual Property Rights, Lien Verbauwhede, SMEs Division, WIPO (World Intellectual Property Organisation), available online at http://www.wipo.int/sme/en/documents/merchandising_fulltext.html last accessed on 04.03.2017