Character Merchandising and Malicious Falsehood

11Character Merchandising and Malicious Falsehood


Character merchandising refers to the use of fictitious characters devised for a book, film, television series or a computer game. There are many famous examples including: the Disney characters, the Teletubbies, the Flower Pot Men, Bob the Builder, Spiderman, the Simpsons, etc. Such characters are commercially valuable because they can be licensed for use on a variety of products in return for a flat fee or a royalty. Character merchandising covers living personalities as well, such as famous sportspeople and celebrities. Famous people allow their name to be used for promotional purposes or to endorse products and services, for example J-Lo perfume. The law has attempted to protect character merchandising through passing off (when copyright and trade mark protection are not available).

Malicious falsehood is a tort that is related to passing off. It arises when a person publishes information maliciously, that is capable of damaging an enterprise’s position or reputation. However, this tort is not limited to commercial activities and has been used in a variety of ways to prevent the spread of malicious falsehoods. In some cases, there is an overlap between malicious falsehood and defamation. Nonetheless, for a successful claim of malicious falsehood the statement must only be false, not defamatory.

Question 48


A children’s production company, Norse Gods Ltd, has developed a new television series based on the Viking sagas aimed at children aged 6–10 years. The characters are derived from the Viking Sagas of the dark ages, depicting the gods as children growing up in Scandinavia. The stories revolve around the Blood Axe clan and their adventures. The three main characters are Erik Bloodaxe, Valkyrie and Harald Bluetooth. The television show proves to be a great success and the programmes are licensed to numerous international stations. A full-length feature film is produced and within a year the characters are famous around the world. The company enters into many lucrative character merchandising licence agreements to generate additional revenue. Another firm, the Hi Chin Cho (UK) Ltd (HCC), produce an ‘Unofficial Blood Axe clan Spellbook’ currently for sale in several large bookstores. Advise Norse Gods Ltd as to the nature of the legal protection they can rely on to enforce their rights in their fictional characters against unauthorised use by HCC.

Answer Plan

The issues to be considered are:

  • The availability of copyright and trade mark protection for fictional characters;
  • the usefulness of the common law action of passing off;
  • Reckitt and Coleman Products v Borden Inc (1990);
  • Mirage Productions v Counter-Feat Clothing (1991).



Merchandising involves the exploitation of image, themes or characters which have become famous. How can Norse Gods Ltd protect the Blood Axe clan fictitious characters it has originated? Surprisingly, such fictitious characters per se are not protected under English law. However, copyright, trade mark laws and passing off afford some degree of protection.

Copyright and Trade Mark Protection

Copyright protects the words and the form in which ideas are expressed, not the ideas or characters themselves. The type of unauthorised use traditionally envisaged by the Copyright, Designs and Patents Act 1988 (CDPA 1988), copying chunks of original text, is not what happens when someone misappropriates a famous Blood Axe clan character’s name or catchphrase for their bed linen or T-shirt.

It may be possible to protect the scripts or text of the Blood Axe clan series as literary works, if they can truly be shown to be original, but not usually a television format. Names do not attract copyright protection, as they are considered too short to be a literary work. They can, however, be protected by trade mark law. For example, Peter Rabbit is registered as a trade mark, which would be infringed if an unauthorised person published a Peter Rabbit book.

The Blood Axe clan characters are presumably illustrated, so it may be a little easier to protect them as artistic copyright works: s 4 CDPA 1988. The original drawings will attract copyright and any new works which use a substantial part of any of those drawings will infringe Norse God Ltd’s rights. Pictures or three-dimensional objects which bear a remarkable resemblance to the Blood Axe clan characters will also be infringements. Illustrations can also be registered as trade marks, but this does not protect the character as a concept, only each specific image. In 1993, copyright protection over Beatrix Potter’s pictures expired and each image was then registered as a trade mark. Now, each individual picture has the ® registered symbol against it, indicating it is a registered trade mark (™ denotes a trade mark that is not yet registered). Although the trade mark registration process is expensive it has the great advantage that trade marks can be renewed every ten years, so protection can be perpetual.

Passing Off

If the Blood Axe clan characters are not protected by copyright or trade mark, Norse Gods Ltd may still be able to prevent unauthorised use through the law of passing off, which is intended to stop someone trading on another’s reputation. Passing off applies if someone is confused into thinking that the new goods were designed or licensed by the original author. In Reckitt and Coleman Products v Borden Inc (1990) the House of Lords summarised the three elements to be proved in a passing-off action, now known as the ‘classic trinity’ formulation:

  1. goodwill or reputation attached to goods and service (for example in claimant’s goods, name, mark, get-up, etc.);
  2. a misrepresentation made to the public (leading to confusion or deception), causing . . .
  3. damage – actual or potential to the claimant.

Norse Gods Ltd could claim damages in passing off if the public thinks the Blood Axe clan characters had been licensed to HCC to use. This is because Norse Gods Ltd have actually created merchandising products and goodwill can therefore attach to the Blood Axe clan characters for merchandising purposes: Mirage Productions v Counter-Feat Clothing (1991)