This Practice Note sets out the intellectual property and competition law issues which may arise in connection with character merchandising (ie the practice of licensing the name or likeness of a character for use in the marketing of goods or services, which will usually require the licensing of trade marks and/or copyright). It considers issues which may arise pursuant to Articles 101 and 102 of the Treaty on the Functioning of the European Union (or in the UK, Chapter I of the Competition Act 1998), as well as possible block exemptions or individual exemptions that might apply. It also considers the interaction between competition law and the tort of passing off.