Character merchandising and product endorsement in South Africa

Latest news |

16 April 2014

There have been some interesting decisions in the UK of late on the related, but not identical, issues of character merchandising and product endorsement. The recent case of Betty Boop was one of character merchandising, and the issue there was whether trade mark registrations for the name and image of an old cartoon character known as Betty Boop had been infringed by a company that had used the image of the character without the licence of the trade mark owner.  The court found that there had been infringement, and in the process it rejected a number of defences that had been raised.

What’s particularly important, however, is that the court held that, as a result of significant licensing by the trade mark owner, the name and image had acquired trade mark significance for most people.  In other words, people seeing goods featuring the name and image assumed that they came from a particular source.  The judge said this:  ‘Ihave rejected the idea that all an average consumer today would see, when looking at the t-shirt, would be a 1930s cartoon character. They will see a character with modern currency. This association certainly takes advantage of the claimants’ investment in Betty Boop because many consumers will be moved to buy the t-shirt as a result of the favourable associations conjured up in their mind by Betty Boop, which associations are the creation of the claimants’ extensive work.’

The earlier UK decision of Rihanna v Top Shop involved product endorsement. The issue there was whether Top Shop, who sold t-shirts bearing Rihanna’s image but who had never bothered to get the singer’s consent, was guilty of passing off. Yes said the court, Rihanna is very well known and people will assume that she has endorsed the t-shirts.  The fact that Rihanna had endorsed products in the past, and the fact that she was active in the field of fashion, were clearly seen as relevant considerations.

Both decisions touch on an important question: just what do people think when they see products bearing the name or image of a well-known person or fictional character?  Do they believe that some company has randomly decided to use the name or image, or do they believe that there is some commercial link between the products and the celebrity or the company that holds the rights to the character?  A commercial link in the form of a licence or an endorsement agreement perhaps!

There was a time when the courts took the view that people seeing the names or images of well-known people on goods made no assumptions of a commercial link.  This was the approach adopted in a case involving images of Elvis Presley, where the UK authorities were not convinced that anyone would assume that those goods had been endorsed or licensed by the late singer’s estate.  The UK authorities took a similar view in a case involving Princess Diana merchandise.  A South African court struggled with the concept of character merchandising in an old case involving the original Dallas TV series.

But things change. In a case involving Formula One racing driver, Eddie Irvine, a UK court found that a radio station that had used his photo in an ad without his consent was guilty of passing off – the court was quite ready to believe that people seeing the ad would assume that he had endorsed the station. And in a South African case involving the 1994 Football World Cup, the court accepted that the public understands the concepts of character merchandising and endorsement. There can be little doubt that today most of us understand that those who are fortunate enough to own famous names and faces often licence their assets to those who provide us with the goods and services we buy, in return for a royalty or fee.

Yes it may depend on the facts!  We may possibly be more inclined to believe that licensing or endorsement has occurred in the case of clothing than in the case of actuarial services. And yes, we may be more inclined to believe that it has occurred where the celebrity is a sportsman rather than a politician – politicians do actually come up in trade mark cases from time to time, there was a spat a while back when a Russian businessman obtained a trade mark registration for the name Yulia’s Icicles, which would be used for lollipops in the shape of the famous braids of former Ukrainian president, Yulia Tymoshenko (a portent of trouble to come perhaps!)

The Betty Boop case dealt with trade mark infringement because there were trade mark registrations. Rihanna presumably did not have trade mark registrations, because she relied on the common law action of passing off, which requires you to prove a reputation or goodwill. Both these options are available in South Africa. But in South Africa there is another option, one which is not available in the UK. I refer here to personality rights, one of which is the right to identity.  Former Miss SA, Basetsana Kumalo, successfully relied on this right when she sued Cycle Lab for the unauthorized use of her photo in an ad, with the court finding that there was a wrongful impression of endorsement. This personality right is not dissimilar to the publicity right recognized in the USA – this right was unsuccessfully raised by the Hebrew University, the heir to the Albert Einstein estate, in a recent case that it brought against a company that used Einstein’s image in an ad, with the court holding that the right had expired because it only lasts for 50 years from the date of death.

Another option that may be available in South Africa is the Code of the Advertising Standards Authority, which provides that a company can’t portray a live celebrity without their consent – there are some vague exceptions, however, for example where it doesn’t interfere with the celebrity’s privacy, and where it doesn’t amount to unjustifiable exploitation.

But there’s no doubt that if you’re a celebrity or the owner of the rights to a character, having a trade mark registration is the best position to be in. That’s because trade mark infringement proceedings are likely to be far easier to run than a passing off case, or proceedings based on personality rights. It’s well accepted that the names and images of celebrities and characters can be registered for any goods or services.  All that’s necessary is a genuine intention to use the trade mark for those products, and this intention will be there if a licensing or endorsement deal is contemplated.   Some celebrities take this option, but it’s amazing how many don’t. It’s no doubt down to the fact that they simply don’t know that this option is available.

For more information, please contact:

NOLA BOND

Head of Trade Mark Department and Director

Department: Trade Mark

Tel: +27 11 324 3000

Email: nolab@dmkisch.com