Character merchandising is a marketing method by which goods or services similar or related to the well-known real or imaginary character are made for appealing the customers. In other words, the idea of character merchandising simply refers to creating a merchantable product around a famous character, whether real or fictional. Concept of character merchandising incepted when Walt Disney Studios started licensing their famous characters in 1930s, to the present day film product placements such as 'Toy Story' where movies are produced around the characters to serve as a medium of promotion of toy characters. Development of the advertisement industry over the time has emphasized how the fame of famous characters can build cognizance and immensely blow out the admiration of such goods and services. Main source of characters for character merchandising is literary, dramatic, and cinematographic work1.
Before going into the legal issues related to character merchandising let us first have a look into the types of character merchandising.
Types of Character Merchandising
Fictional Character Merchandising
The concept of character merchandising was first initiated by Walt Disney Studio by putting separate department for licensing the right to use its cartoon characters Mickey, Minnie and Donald on different products. Popularity of the cartoon characters amongst the people makes them most merchantable characters ever created. Merchandising of a fictional character is basically done by placing name, image, sound/dialogues on the products. One of the Indian examples is the use of Mickey and Minnie cartoon characters on Cadbury chocolates. Use of different superhero characters on school bags and lunch boxes is another example of character merchandising of the fictional characters like cartoons. When a fictional character is created it automatically enjoys the copyright protection as a general rule in most of the legal systems, the author or creator is registered as the owner of the copyright over the created character. Where such character is created under the employment, then the employer becomes the first owner of the copyright.2
What are the sources of these fictitious or cartoon characters?
Literary work: literary work has been the largest source of fictional/cartoon character, talking about Marvel literature characters are explained with such detailing that the person reading it can literally visualize the character, most of the literary arts are accompanied by their visual art expressions. Cartoon character Tintin is the best example of this, it was created by Belgian cartoonist Georges Remi, and it was published for the first time in Belgian newspaper in 1929. With time Tintin became widely popular and appeared in many animated movies and television shows. It also appeared on Belgian postage stamps and Euro coins. Today, a big merchandising business revolves around the character of Tintin.
Artistic work: artistic work like paintings of eminent artists also forms part of the merchantable characters. A number of paintings of Raja Ravi Varma, a well-known artist from India, have been used in merchandising.
Cinematograph films: cinematographic films reaches a very large number of population around the globe because of being entertaining in nature. People feel connected to the characters of such cinematographic films which creates a connection with the consumers, hence various businesses across the globe uses movie characters for marketing their services and products. Animated movies like Adventure of Tintin, Kun Fu panda, Shrek are popular all around the world, whereas movies like Star Wars, Marvels avenger series have a huge market base. According to a study Disney's revenue from merchandising and licensing is about US$ 28.6 Billion in 2010, which is almost 20 times greater than their theatrical revenue.3
Celebrity merchandising can be understood under two heads:
Personality Merchandising: using identity of a famous person for marketing goods and services is called personality merchandising. A famous person can be from any field like sports, movies, music etc. The domain from which they belong gives them a unique persona which can be used in association with product and services. This is also known by the name of 'reputation merchandising'. Personality merchandising improves business because of two reasons: firstly, people can immediately recognize and relate to the product endorsed by their favorite actor or personality and secondly, consumers tend to buy products which are has a picture or any connection with celebrities.
Image merchandising- fictional character played by real person: in the simplest sense image merchandising is using of a fictional character played by a real life person. Fictional characters are usually created in a literary work and at the time of making of cinematographic films from the literary work, the characters are played by the actors. In such cases, such character is identified by the person who has played that role. People can easily relate when they see their favorite character from a film. Some of the examples are Sherlock Holmes and Iron Man played by Robert Downy Junior, Captain Jack Sparrow played by Johnny Depp etc.
Character Merchandising and Legal Perspective
Issues related to personality rights: every individual has two rights related to personality 'right to privacy and right to publicity'. Right to privacy is a common law right which prevents any person from interfering in private and personal life of any other person. Intrusion in privacy of any individual constitutes a tort under the common law practice. Under US legal system use element of any individual's personality constitutes invasion in the privacy of such person.
Norris v. Moskin Store Inc,4 four acts which are recognized as invasion of privacy:
- Intrusion upon one's physical solitude or seclusion;
- Public disclosure of embarrassing private facts of an individual;
- Flash light i.e., putting a person in a false, non-necessary to be defamatory and
- Appropriation of one's personality for commercial gain.
Copyright and character merchandising: the producer of a cinematographic film is considered to be the author of the film. When we talk about fictional character based films the producers have complete right to exploit the character in a manner they desire. Cases where a role is played by a real life person producer may have to see some limitations in exploiting the character in question or need to take consent of the person playing such character. Principle behind giving copyright to the author is to recognize and give incentive to the author for his contribution and labour. Advocates of the celebrity right aver that a celebrity also puts his labour in creation, hence, that makes him also eligible to be incentivized for his contribution5.
In most of the cases conflict arises with respect to image merchandising, on one side producer claims to have complete right to use an image from the film, on the other hand, celebrity claims it to be violation of his publicity right and such kind of usage of the image by the producer for endorsing any product is false.
The Indian Copyright Act, 1957 looks like the only system which provides for an explicit protection for the rights of copyright holders and the producers. Section 2 (d)(v) of the Copyright Act declares producer of a cinematographic film as the author of that film and gives him exclusive right to make copies of the film or any photograph from any image from that film within the meaning of Section 14 (d) of the Act. If we take a look at the Section 38(4) of the Act, it states that, ones a performer has consented for putting his performance in a cinematographic film his right over the performance does not subsist further. In other words, once any kind of performance has been added to a cinematographic film with due consent, all rights goes to the producer.
Indian Constitution: In case of conflicts related to character merchandising, to be specific personality merchandising India mostly takes recourse to old constitution principle of 'right to publicity' or common law principle of passing off. Looking at the pace at which entertainment industry is growing these principles are becoming vague. Article 21 of the Indian Constitution contemplates about right to life and personal liberty. Delhi High Court in 2003 opined that the right to publicity of a celebrity is enshrined in Article 21 of the Constitution (ICC Development International v. Arvee Entreorises). Present observations shows that the Indian constitution does not cover the interests of the producers and copyright owners.
Contractual Issues: endorsement related conflicts are common among the copyright holder and celebrity. For example: a celebrity may endorse a brand of a particular field and goes under contract of not endorsing any other brand from the same or substantially same field during the subsistence of this contract. On the other hand, the producer of a film in which the same celebrity has worked allows a still from that film to be used for endorsing a brand from the same field. In such a situation a conflict might arise between two brands from the same field and company might bring an action of breach of contract against the celebrity.
Trademark related issues: graphical representation of any name or mark which can lead to the source of a product or service is called trademark. Owner of a trademark enjoys exclusive right to use such mark and unauthorized use of such mark amounts to infringement of such trademark. A situation where the trademark is not registered, then the owner of the trademark can seek remedy under common law of passing off. Mostly owners of a character registers trademark or goes for a remedy under passing off for stopping anyone from using any character or from using any indication which shows the customers any kind of connection between the product and character. An association of a celebrity with a product puts fame of celebrity on the product and allows people to connect with the product instantly.
In India the Trademarks Act, 1999 is the most utilized statute on adjudicating matter related to character merchandising. Provisions of the Trademarks Act are broad in nature and therefore are easy to apply on matters related to character merchandising. Section 102 and 103 contemplates that, falsely using any trademark or falsely applying any trademark on any goods or services without consent of the respective trademark owner is an offence punishable with imprisonment and penalty. If any person wants to use any registered trademark on any goods or services he needs to take prior permission from the trademark owner and become registered user of the mark.
As per Section 50(1) (d) of the Act6 a registered user of the trademark shall be removed if he does not maintain quality of goods and services according to the terms of licensing agreement. Situations where trademark is not registered owner of such mark can recourse to the action of passing off. For succeeding in an action of passing off owner has to prove that his mark has a reputation and goodwill in the market and use of the same mark by defendant will result into damage upon the goodwill of the mark.
Because of non-availability of any particular law with respect to character merchandising producers of cinematographic films and celebrities often opt passing off action for protection of their name. Owner of a fictional character can rightly protect their creation by registration under the Act, which will also be beneficial from the business point of view for licensing the characters.
Star India Pvt Ltd v. Leo Burnett (India) Private Limited7 owner of a character enjoys right in the goodwill and reputation of such character. Whether a character is fictional or has been played by a real life person provided that the popularity of a given character has grown beyond the program or series to which the character is associated.
D M Entertainment Pvt Ltd v. baby Gift house and others8 in this case defendant was selling dolls which looked like Daler Mehndi and also sang his songs. The Delhi High court ordered for transfer of the trademark on the name 'Daler Mehndi' to his company DM entertainment and held that, the act of the defendant amounts to passing off.
Trademark can be used to protect the names and likeness of a character and it sets up an intellectual portfolio around the character to structure a licensing module for the same. In light of the above mentioned facts it can be interpreted that resorting to trademark and passing off action to adjudge character merchandising disputes, in favour of the celebrity is unjust towards the copyright holder and demands an independent system to resolve character related disputes.9
Disney Enterprises Inc. & Anr. Vs. Santosh Kumar &Anr.,10 the Delhi High Court held the respondent to be responsible for marketing products comprising depictions of characters such as Hannah Montana, Winnie the Pooh, etc. The merchandising privileges were possessed by the applicant. The Court held that, there was indeed an extreme amount of link between the applicant's claims and the aforesaid characters which is the sole reason as to why any mention to these characters reminds the consumers exclusively of the applicants. This is another example of fictional or cartoon character merchandising.
Looking at the present situation and above contemplated facts it has becomes necessary to provide a statute for dealing with character merchandising related issues, or to use existing statutes with broader interpretation where rights of the celebrity can be protected without disrupting the right of copyright owner.
* Patent Associate at Singh & Associates.
2. Nishant Kewalramani, "Character Merchandising", Journal of Intellectual Property Rights, Vol-17, pg- 454-462
4. 272 Ala 174 (Ala, 1961)
5. Supra note 3.
6. The Trademarks Act, 1999
7. 2003 (27) PTC 81bom, Para 13.
8. MANU/DE?2043/2010, para 16 and 17
9. Sudhindra Nicole J S, Marvel,s superhero licensing, WIPO Magazine, 3 (2012) https://www.wipo.int/wipo_magazine/en/2012/03/article_0005.html (last visited 21-06-2019)
10. CS(OS) 3032/2011
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