By Cecilia Lou and Vincent Yu King&WoodMallesons’ Corporate Group
Merchandizing the image of TV or movie character has become a common practice since long ago. Right owners not only use merchandizing as a way of publicity but also benefit from the sales of merchandise. In China, laws are silent on right to merchandize. Nevertheless, right owners can still harness the existing IP and civil rights regime to establish merchandise agreements for purposes of collecting royalty and enhance publicity. This article provides some of the key pointers in crafting the merchandise agreements.
Licensors need to double confirm whether they have right to enter into the merchandise agreements. Licensors can be copyright owner, trademark owner, design patent owner, or a licensee of the right owners. In the last scenario, it is advised for licensor to obtain a license to sublicense and enforce the right. For example, a movie studio may need to get a license from the actor to explore actor’s image in the movie. Also, overseas right owners may need to grant a merchandise right to the distributor or agent in China. In all, licensors should avoid situation where their right to dispose or license is limited.
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