Character Merchandising and Personality Endorsements
Character merchandising is the secondary exploitation of the essential features of a popular fictional character or a real person in respect of commercial articles, so that prospective customers are ultimately led into buying such products due to their penchant for the character or fictional person. Simply put, it is commercially using the wide appeal of a popular character for merchandising of products and services.
A personality endorsement on the other hand is the term used when real persons are involved in the commercialisation. Character and personality merchandising is a modern means of increasing the appeal of products or services to potential customers who have an affinity with that character or personality. In fact, character and personality merchandisers believe that the main reason for a consumer to buy low-priced mass goods is not because of the product itself but because of the name or image of the celebrity or fictional character that is reproduced on the product.
For example: Fictional characters typically derive from film cartoons (Mickey Mouse, Bugs Bunny); toy creations (Barbie) ;television series (Teletubbies, The Simpsons), live action feature films (Star Wars); comic books (Smurfs, Tintin); fiction books (Harry Potter, Winnie the Pooh and computer games (Lara Croft).
Real persons or characters used for merchandising are usually famous actors, musicians and singers (Rolling Stones, Britney Spears), sports celebrities (David Beckham, Tiger Woods, Virat Kohli), and potentially any person with a marketing potential. It is estimated, for example, that David Beckham earns as much as US$18 million a year from his endorsements for Vodafone, Adidas and Pepsi, among others.
Personality merchandising involves merely the use of the name or image of the person to adorn a product. Personality endorsement refers to a person informing the public that he/she approves of the product or the service or is happy to be associated with it. It is quite common for celebrities to allow their names to be associated with specific product.
Character Merchandising under IP Law
The rights of ownership in respect of the subject matter of character merchandising do not belong to one single person or party when real or fictional characters are used for merchandising. For this reason, a single law does not provide protection or deal with legal issues faced in character merchandising. It is a group of laws that affords protection to different aspects of character merchandising and is used for enforcement of a multitude of rights in case of misuse or violations.
When a fictional character is introduced in a literary work or as an artistic work, it is governed by the principles of copyright law. Typically, authors of the works hold copyright over the fictional characters. However, if the character is a work for hire, the party commissioning the creation of the character holds copyrights. Further, when a fictional character is a part of a movie or a teleseries, the producer of the series has copyrights over the character.1
The producer of a movie or tele series may not have full rights to exploit the characters that cannot be separated from the actors portraying
the same and the image based on the character is built around the actor. In such case, personality rights of the actor also apply in addition to copyrights of the producer. This, at times, gives rise to conflict between the two kinds of rights.
Since the essential personality features of fictional and real persons are used in relation to articles of commerce, trademark law principles also come in picture in cases of character merchandising. Owing to the wide explanation of a trademark under the Trademarks Act, it becomes possible to have the essential personality features of any fictional or real person protected as trademarks. Not only the name of a character, but his/her image, signature, character designs, voice, catch-phrases used by him/her, and the like, can be protected under the scope of trademark law. While in case of a celebrity or an artist, one has to consider the most distinctive personality attributes that are famous and worthy of trademark protection, for any fictional character originating from a literary source or a cinematograph film or as artistic work, like a cartoon, it is simply treating such fictional character as a trade indication and using the same in respect of articles of commerce. Character merchandising is the first step for treating famous fictional characters or real personalities as trade indications.
Right to Publicity
An individual's property is the extension of his personality. This was pointed out by Hegel and is commonly known as the Hegelian justification of intellectual property rights. The right of publicity, often called personality rights, is the right of an individual to control the commercial use of his or her name, image, likeness, or other unequivocal aspects of one's identity. The elements typically comprising the Right of Publicity are referred to as "name, image and likeness." This trifecta varies from state to state.2
India, like the UK, does not have an independent legislative provision protecting an individual's right of publicity. This right has largely been enforced in India under the common law tort of passing off, to establish that i) the disputed mark possessed goodwill and reputation, ii) there was misrepresentation of the mark creating likelihood of confusion and iii) there was actual damage or likelihood of damage.3 To show 'reputation', the enforcement of this right would, in most cases, inadvertently be dependent on commercial exploitation of the plaintiff's mark – effectively justifying why a commoner's name may not be protectable under the tort of passing off.
Although the earliest cases recognizing a right of publicity focused on preventing the unauthorized use of a celebrity's "name or likeness", the scope of protection has expanded significantly. Today, the boundaries of "likeness" are wide. Courts now recognize that a celebrity has a legitimate proprietary interest in his personality and that a defendant may violate this right, even if he does not use the celebrity's name, portrait or picture. The expanding right of publicity provides celebrities with the opportunity to use their names for great profits. This is particularly true in advertising, where a celebrity's endorsement of a product or service can attract consumer attention, add status or credibility to the product and, most importantly, increase sales of the product or service advertised.4
Testimonials by well-known personalities have "stronger appeal to the purchasing public than other types of advertising". Hence, they stimulate sales of the products and services endorsed.
Because the law treats a celebrity's identity as property which he may use, lend or sell to others for profit, the celebrity, like other property owners, should not be permitted to use his property with impunity or in a manner harmful to others. Along with recognition of the proprietary right to one's identity, a concurrent duty to refrain from using that right to the detriment of others should be attached. The celebrity's right of publicity "has commercial value only because the law has granted him the exclusive right to deal in the marketplace with his name, picture or opinion".
Character Merchandising has become immensely popular given the sort of business advantage it entails. At the same time, the law has not managed to catch up with this fast-paced business practice. The legal uncertainties not only prove to be a hindrance to the business interests but also result in unanticipated losses to the rightful copyright owners. The need of the hour is to use the existing laws with a new perspective and evolve a mean path where the celebrity can reap the benefit of fame without obstruction, while at the same time the copyright owners can utilize their content to the maximum. Notwithstanding the availability and extent of existing forms of legal protection, the practice of merchandising the essential personality features (mainly the name and the image) of a fictional character or of a real person has rapidly evolved in some countries from a subordinate activity into an important independent source of revenue and even, in some cases, into a civilizing force if one considers its impact on the public at large (mainly on the younger generations).
1 Suneeth Katarki, Chacha Chaudhary and Character Merchandisng available at http://www.mondaq.com/india/x/361128/Trademark/Chacha+Chaudhary+And+Character+Merchandising
2 Jay S.Kogan, Celebrity Endorsements ,Boston University Journal of Law pg 88
3 Reckitt & Colman Products Ltd v Borden Inc  1 All E.R. 873
4 Jay S.Kogan, Celebrity Endorsements ,Boston University Journal of Law pg 92
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.