Alice in Merchandise-land – the value of character and celebrity merchandising

Sharon Givoni Consulting Consumer Law, Entertainment Law, Food Law, Intellectual Property, Packaging, Protecting ideas

The value of celebrity endorsements on food advertising, packaging and labelling is indisputable, whether it be Jamie Oliver with his range of products, George Clooney for Nespresso or Serena Williams for Gatorade (and Nike… and Berlie… and…)

Take-Away Tips for your business

• The use of images of fictional beings on products, such as cartoon characters, is likely to appeal to consumers.
• Celebrity endorsements is a highly lucrative industry and celebrities will generally expect some sort of remuneration to endorse a product.
• To avoid getting, never use such images without express consent of the legal owner.

What is the law?

In Australia, there is no statutory legislation expressly directed towards preventing a business from using the identity of a celebrity or a fictional character without consent.

However, the use of the image or character of a celebrity will be unlawful if it constitutes a misrepresentation or a false claim of sponsorship and approval of that celebrity (for example if you were to use an image that looked like Kylie Minogue to promote a fashion label or her name for a perfume).

A celebrity may also have a claim for “passing off” if the unauthorised use “cashes in” on the celebrity’s goodwill and reputation by implying a connection between the celebrity and the product. Same as the example above, using a name or even a saying that someone else uses (think Paris Hilton’s That’s Hot or think Britney Spear’s This sick beat or even Dame Edna Everage Hello Possums).  Even Make America Great Again (no secrets who that is – Donald Trump).

In this area, legal protection generally depends on several factors, including:

• how famous a person or fictional character is;
• whether the public is likely to think a celebrity or fictional being is in some way connected to the product or service being marketed;
• whether there are copyright or trade mark issues involved;
• whether the owner of the image or character has been entitled to an endorsement fee for such use; and
• whether the person’s name or image has been used in a way that is defamatory.

In other words, each case will turn on its own facts and there are a range of issues you should consider before using character or celebrity merchandising.

Duff Beer, from fiction to reality – the importance of consent

Duff Beer, first seen on The Simpsons, is known by everyone as Homer Simpson’s favourite drink. In 1996, Duff Beer appeared on supermarket shelves.

The owners of the rights to The Simpsons, Twentieth Century Fox, never wanted the fictional beer to be promoted in real life.

This was due to concerns that it may encourage children to drink and thus potentially damage the company’s reputation. However, in 1996, South Australian Brewing and Lion Nathan Australia ventured to produce and market an alcoholic drink named “Duff Beer”.

Twentieth Century Fox were quick to bring legal proceedings and the Federal Court ruled against South Australian Brewing. In considering the target market of the product, the nature and strength of the associations conveyed by the use of “Duff Beer”, the court found that consumers were likely to associate the product with the cartoon despite the use of a disclaimer. Consequently, the product was pulled off the shelves.

Others tried and failed, when finally in 2014 the “official” Duff beer finally arrived, selling through Woolworths stores.

However, consumers could only get that wonderful Duff for a short period of time.

Woolworths was quickly forced to stop selling the beer after the Alcohol Beverages Advertising Code were concerned that the beer would be appealing to children and young people. Matt Groening was right for his concerns all along!

What our firm can do to help

Character and celebrity merchandising can be lucrative for your business, however it is important that you get the right consent in place first.

If you are thinking of using a celebrity or character to market your product, you should first seek legal advice to protect yourself. We are able to provide labelling and packaging advice in relation to character merchandising and celebrity endorsements.

Sharon Givoni regularly runs seminars and workshops for educational institutions, businesses and industry associations. Packaging and labelling laws, as well as copyright are some of the areas she often presents on.

Disclaimer: This article is of a general nature and not to be replaced with tailored legal advice.