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 relevant IP rights
  • The Merchandising Agreement
  • Applicable Competition Law
  • Technology Transfer Block Exemption Regulation
  • Vertical Agreements Block Exemption
  • Exclusivity
  • Territorial restrictions
  • Restrictions on passive sales
  • Pricing
  • more

As of exit day (31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this Practice Note. For further guidance, see Practice Note: Brexit—IP rights.

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.

The relevant IP rights

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.

According to English case law, a character’s name cannot be protected by copyright as a literary work. In the case of Exxon v Exxon, the judge described a literary work as something that is intended to afford either information or instruction, or pleasure in the form of literary enjoyment, and found that the