INTRODUCTION
At some point, we’ve all bought cartoon characters, such as goodies of Mickey Mouse, the Frozen Princess, Shahrukh Khan posters, Sachin Tendulkar, or celebrity products, in the form of keychains, T-shirts, pencil boxes, notebooks, mugs, etc. These have left a lasting impression on us since we were young. We refer to all of these items we can access as character merchandise.
It is a marketing tactic that uses the name, image, or other personality attributes of a well-known character- fictional or non-fictional, to advertise a product or service. The idea behind this strategy is to make consumers want to purchase the product by establishing a connection between the character and it.
According to sources, The Walt Disney Company was the world’s largest brand licensing company in 2023, with an estimated 62 billion dollars in global retail sales of licensed consumer goods and experiences. The first cartoon character to be marketed as a wildly popular cuddly toy as a character merchandise was Felix the Cat (USA), which debuted in the year 1919.
Today, we can find that popular characters like web series characters, Marvel superheroes, or even Harry Potter are being used more often by fashion brands globally to create themed products that cater to a broader adult demographic.
However, how have these character merchandising techniques adapted the best-selling strategies, and require legal protection, particularly in the area of Intellectual Property Rights?
Today’s entertainment industry and its brand licensing market are dominated by the world’s youth. By appealing to buyers’ emotional and psychological demands, character merchandising guarantees the business financial success and market share seizure.
TYPES OF CHARACTER MERCHANDISING
FICTIONAL CHARACTER MERCHANDISING: This is the most traditional and relevant form of character merchandise. Fictional character merchandising entails using the key aspects of fictitious characters to promote and advertise products and services. It includes licensing and selling products from different media such as Movies (Disney), TV Shows (Game of Thrones), Comics (Marvel, Archies), Anime (Dragon Ball Z), and, Cartoons (Shinchan, Doraemon).
PERSONALITY MERCHANDISING: It uses the personality of a well-known or authoritative person’s identity to advertise products and services. Personality form of merchandising is the practice of prominent celebrities from several industries like sports, film, music, etc. allowing a distinctive aspect of their personalities to be used in connection with the merchandise. For example, Kareena Kapoor advertised Lux, Taylor Swift’s merchandise line, and Virat Kohli endorsed Manyavar. Thus, by linking any well-known celebrity or figure with the product or service, personality merchandise generates psychological demand for the same.
IMAGE MERCHANDISING: Image merchandise combines the elements of the first two categories. Here, actual performers portray fictional characters from TV series or movies to promote and advertise products and services. Here, the customers associate those actors with the fictional characters themselves. E.g. Hannah Montana played by Miley Cyrus, or Daniel Radcliffe’s famous Harry Potter character.
In the first character merchandising case of Star India Private Limited v. Leo Burnett India The Bombay HC stated that ‘public recognition is an important aspect revolving around Character Merchandising and only those Characters/Celebrities who have gained/acquired a reputation among the public are being exploited.
LEGAL PROTECTION
Character merchandising is protected by various intellectual property regulations, such as those about designs, copyrights, and trademarks.
COPYRIGHT PROTECTION
The owner or licensee is primarily better protected under copyright laws. Any fictitious character is automatically protected by copyright from the moment it is created. In character merchandising, copyright is a crucial component of IP rights that essentially safeguards the unique characteristics of fictitious characters. For such characters to be protected by copyright, they must be different and original. The owner of character merchandising products has the exclusive right to make copies, distribute them, and sell them as he likes. The owner also has the right to sue the infringer for any unlawful use or infringement and pursue remedies like profit accounting, damages, and injunctions. Copyright protection turns an element of character merchandise into an investment that can be sold or licensed for profit. The copyright owner may get financial compensation via licensing and merchandising agreements in the form of royalties or other payments for the use of character merchandise. In addition, registering for character merchandising gives the owner a competitive and fair advantage in the market.
MORAL RIGHTS PROTECTION
Moral rights, under copyright protection, protect the relationship between the creator and their work, generally recognized under the civil rights jurisdiction. It includes:
- The right to claim authorship
- The right to object to any distortion, mutilation, or other modification of the work
- The right to have a work published anonymously or pseudonymously
Therefore, if there is any mutilation or change to the agreed-upon agreements or in the context of personality or image marketing, the celebrity figure may assert moral protection on copyright grounds for such.
TRADEMARK PROTECTION
Imagine that a well-known pop band has chosen to collaborate with a clothing company to introduce T-shirts bearing their name and insignia. Here, the band and the apparel company will enter into a trademark license agreement to execute this business. Businesses and brands can profitably capitalize on the appeal of well-known characters by strategically using character merchandising. The owner can register their character or any of its attributes, like face, image, or sound, with the Trademark Office. They can then use a trademark assignment agreement or a licensing arrangement to market their character and thus access the commercial market by creating merchandised goods. Authorized third parties are then granted permission to use the characters in market-available merchandised goods or services through these trademark agreements.
DESIGN PROTECTION
Owners and designers have the option to register their specific designs, particularly those that will be produced and sold on an extensive basis. To enable such protection, a design needs to be:
- Fresh or innovative
- No earlier publication of the same or similar design
- Not in violation of public morals, nor scandalous
OWNERSHIP RIGHTS
The rights to the characters created are generally owned by the creators of those characters. In the event of a transfer of character’s ownership or a license granted to another individual, that individual assumes ownership of such character merchandising. However, several variables are included to determine the ownership of a character for merchandise, including:
CREATOR: The rights to the character often belong to the person who created it.
EMPLOYER: The employer is the owner of the copyright if the character was made for them.
ACTUAL INDIVIDUAL: The rights belong to the real individual if the character is based on them. This is generally in the case of image and personality merchandising.
However, these legal ownership and rights are often conflicted and vary depending on licensing agreements, employment contracts, or the prevalent laws of the nations.
The court has taken an intriguing stance under US law to safeguard the imaginary character using two tests:
THE TEST OF DISTINCT DELINEATION
The Nichols v. Universal Pictures Corp. case established the distinct delineation test, which held that fictional characters might be protected by copyright law if they were clearly defined. The test looks for any kind of infringement in the character’s expression after determining whether it is sufficiently defined to be protected by copyright. “Therefore, the less developed the characters are, the less they can be protected by copyright; and that is the penalty an author must bear for marking the characters too indistinctly,” the concerned court noted.
THE STORY BEING TOLD TEST
“A character may only be protected under copyright law if the character constitutes the story being told, but if the character is the chessman in the game of telling the story, he is not within the area of the protection afforded by copyright,” this test was established under the Warner Bros. case. It was determined that the author would retain the right to utilize his character in subsequent works, provided that these uses did not infringe upon the original work, which was protected by Warner Bros.’s copyright. As a result, the fictional character should play a significant role in the narrative.
CONCLUSION
Character merchandising is a thriving business in today’s youth. While the business and growth of the media sector increases, with TV shows, literary novels, movies, clothing brands, and small-scale businesses, these sectors successfully capture the needs and demands of the consumers. It is an ingenious marketing tactic to capitalize on consumers’ affinity for well-known characters, whether fictional or real. This also increases the need for adequate protection and optimization use of character merch, for its owners and as well as for the person being the face of those products or services. Commercial exploitation of these fictional characters makes them popular, and this is where intellectual property laws come into play to protect the owner’s rights.
Author(s) Name: Somya Ojha (The University of Burdwan, West Bengal)
