by Raman Mittal
University of Delhi, Associate Professor, Delhi, India

Merchandising of intellectual property (IP) is the marketing technique where the goods or services are decorated and embellished with established IP with an aim that such embellishment will induce the public to buy them. A coffee mug carrying the image of Spider-man, a toy made in the shape of He-man, a T-shirt with a logo of Harvard University, a rakhi in the shape of Donald Duck are all instances of merchandising of various forms of IP. In all these examples, IP such as trademarks, copyrights and designs belonging to others have been used by the producer of goods/services. The producer could, however, do that only through licensing of relevant IP rights.

It was with the appearance of Mickey Mouse and other Disney characters in the 1930s that the concept of merchandising became a significant licensing business practice. The concept of ‘characters’ was fuelled by popular magazines and comics. With the arrival of radio, films, television, and advertising, the concept of merchandising became an industry in its own right. In recent years, the business of so-called ‘merchandising’ of names and images of fictional characters and celebrities has become commonplace, and is ‘probably a multi-billion industry in the Western World.’

This article, on the one hand, seeks to dissect the practice of character merchandising so as to find out its true meaning and scope and, on the other hand, it analyses the practice from various different angles of laws implicated, licensing of intellectual property rights, together with its commercial potential and associated legal risks. The meaning of this law is best illustrated by principle cases on the subject— therefore the article looks into various interesting controversies and leading cases that this practice has generated. This article draws on the commercial practice of character merchandising, the related legal disputes and the consequent jurisprudence that developed in the Western World and transposes the same in Indian settings, and tries to examine the Indian legal framework in this context.