Merchandising Right: Intellectual Property of Animation Derivative Products

Issue 32,By Zhou Yi, China IP,[Copyright]

One day in 1997, law student Du Ying of Peking University was standing on the platform to answer questions and defend her master thesis. Recalling that day, Ms. Du, now a professor of the university, said: “my subject was quite new at that time and I was not sure I could pass.”

What Du studied was merchandising rights, one of its applications being intellectual property protection of animation derivative products. The concept arose again in 2006 along with the popularity of the “Blue Cat” series. Although recognized as the best theoretical method of protecting animation derivative products, it doesn’t work well in reality.

“It is difficult to determine the borders of rights, and to distinguish it from intellectual property rights. It is even harder to legislate,” Du told a China IP reporter.

Protection of animation derivative products in reality 
Animation images and animation derivative products are closely connected ideas, the latter usually developed on the basis of the former. Presently there is no consensus on whether an animation image is protected by copyright in China. Some believe that it is an “artistic work,” but others say it doesn’t represent a work. The courts sometimes do not grant animation images copyright protections. For example, in the case of the “match figure,” the work was not considered an original design since it belonged to the public domain.
Such unlicensed products are habitually called “pirated” ones in articles and in reality, and thus should be protected by the Copyright Law. “When the protection of animation images is controversial, the legal backing for the derivative products is even weaker,” said Du.

The intellectual property question of animation derivative products refers to the developing of products using animation images without authorization from the right holder. Rights granted in the developing of products using animation images, such as design patent and trademark, can be regulated by corresponding laws. Without these related rights and lows, protection over intellectual property of animation products will be impeded.

Right holders have two legal remedies for the infringement upon animation derivative products, according to professor Du.

One is the conflict of prior right. According to the Trademark Examination Standards, the application of the registration of a trademark of copyright without permission of the right holder shall be regarded as infringement upon the prior right of the right holder, and the disputed trademark shall not be accepted or be withdrawn. But it is limited to a trademark and as a result other character elements of an image, such as sound and clothing, are not protected. Besides, it is only about the validity of a trademark and does not make regulations to put it into effect..

The other is article 5 of the Anti-unfair Competition Law. This law makes it an unfair practice for one to use the specific name, package, decoration of the famous or noted commodities, or use a similar name, package, decoration of the famous or noted commodities, which may confuse consumers distinguishing the commodities from the famous or noted commodities. But the work or animation image must be famous ones, and the court usually requires a direct competitive relationship between the plaintiff and the defendant when determining unfair competition. However, in practice there is virtually no competitive relationship if an animation company only engages in licensing and is not involved in production. Many derivative products’ producers can not be punished by law if they don’t have competitive relationship with the right holders.

“Presently, perhaps the most ideal way is through the protection of trademark rights, that is, through all-around registered trademarks. Taking the Pleasant Goat and Big Big Wolf as example, right defending would be legally easier if the design markings of Creative Power, ‘Pleasant Sheep’ ‘Big Big Wolf” all become registered trademarks,” said Du. “On the other side, the courts should not be the only ones to be blamed for the poor situation in right defending, because the judges lack legal backing.”

However, as mentioned earlier, the amount of time and the cost involved in registering your rights are both nearly insurmountable difficulties in reality.

Merchandising right
When discussing the protection of animation derivative products, scholars tend to believe the law should establish a new intellectual property right in China; that is merchandising rights.

“Merchandising right is a new kind of intellectual property right in modern economic societies. It refers to the right of the right holder to obtain financial gains through the commercial use of his name, image and his work, character, mark or other creations. It chiefly includes the right of an actual figure and a virtual figure,” said Du.

Animation derivative products rights should belong to the merchandising of a virtual figure. It is not an idea originated in China, but comes from Europe and America (the right of publicity) and Japan (the right of merchandising).

Theoretically, merchandising rights can effectively protect animation derivative products. It can even be extended to the whole cultural creative field, such as virtual roles in games and stars in the entertaining industry. “In fact, the right of publicity in the United States is a result of its mature entertaining industry,” said Du.

However, it is a rocky way from theory to legislation. In creating a new type of right, a series of sophisticated questions must occur, such as how to determine the borders of rights and how to construct a corresponding legislative system.

So far, the most convenient and reliable way to provide legal backing is to revise the idea of reproduction in the Copyright Law so it is the same as in the Berne Convention: Authors of literary and artistic works protected by this convention are entitled the exclusive right of authorizing reproduction of these works in any method or in any form. As a result, unauthorized production of animation products would be legally regarded as an action which can be controlled by the concept of copy.

Note: during the interview, an American lawyer told a China IP reporter that the right of publicity in the United States covers only actual figures but not virtual figures. However, in China, the principles on the right of publicity for an actual figure and a virtual figure are similar, so there is no strict differentiation.  

(Translated by Li Heng)

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