Character merchandising—IP and competition law issues
Produced in partnership with Aimee Brookes of Bristows LLP
Character merchandising—IP and competition law issues

The following IP guidance note Produced in partnership with Aimee Brookes of Bristows LLP provides comprehensive and up to date legal information covering:

  • Character merchandising—IP and competition law issues
  • The Merchandising Agreement
  • Applicable Competition Law
  • Technology Transfer Block Exemption Regulation
  • Vertical Agreements Block Exemption
  • Exclusivity
  • Territorial restrictions
  • Restrictions on passive sales
  • Pricing
  • Abuse of a dominant position
  • more

Character merchandising is the practice of licensing the name or likeness of a (usually fictitious) character for use in the marketing of goods or services. In theory, that character association makes the goods or services more attractive to the market. For the licensor, as well as the royalty fee generated, the licensing of such character rights can be invaluable for marketing and sponsorship.

Copyright

Under the Copyright, Designs and Patents Act 1988, a copyright statutory right will arise in original artistic works as soon as they are created. If a character itself is an artistic work, it is possible for it to be protected separately from the underlying work.

Trade marks

The name or image of a character could be registered as a trade mark, provided it meets the requirements under the Trade Marks Act 1994.

The Merchandising Agreement

A merchandising agreement may take various forms. Merchandising agreements are often, though not always, between parties who are not competitors and are generally regarded as agreements which are vertical in nature. A merchandising agreement will always include a trade mark and/or copyright licence.

As with all types of agreement, restrictions in a merchandising agreement can give rise to competition concerns. For example, licensing on a national basis with restrictions on sales outside the national territory has the potential to result in the partitioning