What is the merchandising right?
As sectors of the cultural industry such as film, television and animation experience a boom, the names of these works as well as the names and images of the characters in these works have become valuable commodities. Although there is no specific definition of "merchandising rights" under current Chinese law, protection can still be obtained based on the general definition of this term as one of the rights and interests protected under the General Rules of Civil Law and other applicable law. In practice, merchandising rights are gradually widely recognized and protected as prior rights.
Does the P.R.C. Trademark Law Protect Merchandising Rights?
According to the provisions of Article 17 of the Opinions of the Supreme People's Court on Several Issues Concerning the Trial of Administrative Lawsuits on the Authorization and Formulation of Trademark Rights published on April 20th, 2010, the Supreme Court held that although provisions on prior rights are open clauses, any legal right that is entitled to protection should be protected as a prior right. On the question of whether or not merchandising rights enjoy legal protection as prior civil rights, there have been precedents that have recognized and established merchandising rights as such. In a trademark objection case involving the mark "BOND 007"1, the appeals court expressly stated that since the names of the characters in the 007 film series enjoyed prior popularity, they should be protected as prior rights.
Nevertheless, there have also been precedents in which the court has not recognized merchandising rights. In the trademark dispute Fanjingshan No.32046912, the court held that "in the current case, the plaintiff asserts merchandising rights as its prior rights. Since these rights have not been established by law, however, and since they have no definite content and do not fall within the scope of prior rights established by law, the trademark in dispute does not satisfy any of the elements of 'impairing existing prior rights of others' under Article 31 of the Trademark Law".
Judging from current circumstances, the Chinese courts' low regard for the concept of merchandising rights as prior rights has changed in recent years. Although no uniform definition of the term "merchandising rights" is yet available, there has been a general tendency to apply certain provisions to merchandising rights that allow them to meet the requirements for a form of legal protection that amounts to prior rights.
(Source: Protection of Merchandising Rights by the Trademark Law, by Ying Ying)
Footnotes
1. (2011) Gao Xing Zhong Zi No.374.
2. (2010) Yi Zhong Zhi Xing Chu Zi No.430.
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