Character Merchandising is a new age business phenomenon to commercially exploit the famous comic characters in garb of generating revenue and fetch profit by using the pictures, voice dialogues of famous characters / personalities of which the general public are emotionally connected. The evolution of the character merchandising was by the famous company – Walt Disney Studios in 1930’s when they licensed the famous character like Mickey Minnie and Donald duck. Technological advancement and channels devoted to children entertainment has created a demand in the market and influenced the said segment to buy the product as the general public get attached to the character.
There are three type of character merchandising.i.e. Fictional, personality and image merchandising.
The protection of the character merchandising falls under multiple intellectual property laws namely, trademarks, copyrights, and designs. This article focuses on the protection of the character merchandising under the Copyright law in India and US, as copyright law provides the more essential protection to merchandising of characters since it grants the creator of the particular character the right of ownership and hence the discretion to allow for further merchandising.
Producer is the copyright owner of every act in a film, cartoon or any program and hence the producer has the exclusive rights. The Act provide protection to the copyright holders and creators’ rights.
Section 2 (d)(v) defines the producer of a cinematographic film to be the author of that film and grants him the exclusive right to make copies of the film or any photograph from any image from that film within the meaning of Section 14 (d).
Section 38(4) of the Act, clearly states that once the performer consent re the use of his performance in a cinematographic film, the right to the performance is no longer valid. Meaning thereby that the producer owns all the rights once consented by the performer.
The collective reading of the aforementioned provisions indicates that once a performance becomes part of the cinematographic film the performer ceases the right on the work and the producer is the sole owner of the cinematographic film and have the right to exploit the images in the form of merchandising
Section 13 of Copyright Act, 1957 allows protection of literary, artistic, musical or dramatic work, sound recording and cinematographic film. A fictional character may be protected under the literary work, and its performance may be protected under the dramatic work and can be granted performers’ rights. In order to gain copyright protection for fictional characters, they must seem distinct in the eyes of the public. The character is protected under law subject to the condition that it should be original and should be an expression of an idea and should exist in some material form. The below are case laws discussed to showcase the trend followed by the Indian judiciary in relation to character merchandising in India. While using the Character merchandising through fictional characters, or image of a movie or television character, copyright license has to be obtained otherwise it would amount to copyright infringement
Under US law, the court has adopted an interesting approach to protect the fictional character by way of two test-
- The distinct delineation test was first introduced in the case of Nichols vs. Universal Pictures Corp, wherein it was stated that copyright law could guard the fictional character if they were distinctly delineated. The test examines whether the character’s expression is adequately delineated to be copyrightable and then whether there is any sort of infringement in character’s expression. The concerned judge observed, “It follows that the less developed the characters are, the less they can be copyrighted; and that this is the penalty an author must bear for marking the characters too indistinctly.”
- The Story being told test was introduced in the Warner Bros. case.in which it was stated that “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.” It was decided that the author reserved his right to use his character in other works as long as these uses did not invade on the specific original work, which had been copyrighted to Warner Bros. Therefore, the test showcase the fictional character should be crucial part of the story.
Judicial Precedent in support of Character Merchandising in India
1. Raja Pocket Books v. Radha Pocket Books.
The case shows how the copyright law protect the character and its character rights thereof and how related to the distinctiveness of the actor. The plaintiff developed the character of a man and wore a green body suit and a red buckle belt famously known as Nagraj. The defendant starts a comic which look similar to that of the plaintiff character and named it Nagesh. They both had similar fictional powers as well, that of a snake.
The Hon’ble Delhi High Court held that the copyright of ‘Nagraj’ was with the Plaintiff and the Defendant’s character was likely to infringe upon the Plaintiff’s if they continued to use it in any image or poster or any advertisements which would ultimately amount to infringement of the Plaintiff’s copyright.
2. Star India Pvt. Ltd v. Leo Burnett.
The defendant created an advertisement of a consumer product called “Tide Detergent” telecasting it with the title of “Kyonki bahu bhi kabhi saas banegi” which is in relation to the famous TV show, “Kyunki saans bhi kabhi bahu thi”. In the said advertisement the character of grandmother, mother-in-law and daughter-in-law, similar to the characters in the serial of the plaintiff.
It was contended by the plaintiff that there was an infringement of the copyright because an average viewer will have an impression that the plaintiffs are endorsing the defendant’s product and there is a connection between plaintiffs in the said serial and the defendants and their product.
However, the court was of the opinion that the "The characters to be merchandised must have gained some public recognition, that is, achieved a form of independent life and public recognition for itself independently of the original product or independently of the milieu/area in which it appears"
The court applied the test of “substantial similarity” and after much observation both quantitatively and qualitatively, it was concluded the two work were different and there is no work of substantial copying or similarity between the two. The case was in favour of defendant as no actual damage was established
3. Disney Enterprises & Anr. v. Santosh Kumar & Anr.
The Delhi high court ruled that the defendant were liable for selling products using images of character of Hannah Montana, Winnie the Pooh, etc. whose merchandising rights were owned by the Plaintiffs. The court determined that the general public will associate such character with plaintiff only.
4. Diamond Comic Ltd. & another v. Raja Pocket Books & Others.
In this case the defendant was the owner of a popular character “Shakti man” into the comics which he has assigned to the plaintiff. Pursuant to gather fame and a name in the comic community by the plaintiff, the defendant began producing their own comics, In lieu of the same, Delhi High court was of the view that defendant had assigned his character to the plaintiff, the defendant could not exploit it by creating their own comic as this would constitute to copyright infringement.
The US court deals with the question of copyright protection of a character before infringement analysis. Although the Indian Copyright Act, 1957 is supporting the cause of producer and copyright owner to a certain extent, however, it is insufficient to ensure protection of character merchandising. The courts in India follow the abstract concept of idea and expression and fail to analyse whether character deserves copyright protection but straight away jump into the analysis of whether infringement has been made.
It is advisable that the Indian court must consider the approach as followed by the US court in order to ensure better protection to the authors when they commercially exploit their creations. Tests like character delineation test and story being told should be introduced in India to streamline the pattern for protection in case of infringement in relation to character merchandising.
Considering the growing market for commercial exploitation of the character, we conclude that India is in dire need of having a specific legislation for character merchandising to protect the right of the rightful owner as legal uncertainties has not only proved to be a hindrance to the business interest but also to the resulted loses to the rightful owner. It is foremost important to shape the law regarding the concept of character merchandising and its effective enforceability ensuring all the deserving privilege to copyright owner/ proprietor.
About the Author
Managing Associate – Trademarks Prosecution, at Rahul Chaudhry & Partners
Pallavi Dora is a Managing Associate at Rahul Chaudhry & Partners. She has obtained her BBA-LLB from University of Petroleum and Energy Studies, Dehradun and her LL.M from National Law University, Jodhpur in 2017. With an experience of over 7 years, Pallavi is actively involved in handling all trademark prosecution matters and copyright matters of the firm.
 In the case of a cinematograph film-
(i) to make a copy of the film including a photograph of any image forming part thereof;
(ii) to sell or give on hire or offer for sale or hire, any copy of the film, regardless of whether such copy has been sold or given on hire on earlier occasions;
(iii) to communicate the film to the public;
 1997 (40) DRJ 791
 2003 (2) BomCR 655
 CS(OS) 3032/2011
 2005 (31) PTC 378 Del