‘Artist + brand’ co-branding from a legal perspective

By Cecilia Chen and Huo Qiyi, ETR Law Firm
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We live in an age where seemingly any two unrelated brands can suddenly launch a co-branding campaign. In the world of co-branding, artists in many ways enjoy special status.

In particular, unlike other celebrities, artists participate in co-branding through their work, which involves copyright. Also, the core objective of co-branding is to attract traffic, and the traffic driven by an “artist + brand” campaign relies on the artist’s public image and renown, which in turn involves the artist’s rights of personality.

Together, copyright and the right of personality right constitute the core of “artist + brand” co-branding.

COPYRIGHT IN WORKS

When an artist’s work is part of the co-branding, and the brand holder does not require the artist to develop a new artistic expression, the existing work of the artist will be used; or the artist may be commissioned to recreate an existing work, or complete a secondary creation based on it.

Once the commission is completed – or a decision is made to use a certain work – the brand holder will enter into a contract to use the copyright of the artist’s work and derive profit.

legal perspective on co-branding
Cecilia Chen
Partner
ETR Law Firm

Acquisition of copyright. To avoid any risks of the co-branded product being plagiarised, or being accused by a third party of plagiarism, the brand holder often requests to be granted relevant copyright by the artist. In practice, copyright of art does not necessarily belong to the artist. For example, a game design proposal or rules of play may belong to the game company. To avoid unnecessary legal risks, the artist needs to ensure the originality of his/her work.

Vesting copyright in commission. Copyright of commissioned works should be vested in accordance with contract arrangements, except when there are none, in which case it should go to the commissioned party. However, article 19 of the Copyright Law states that “the vesting of the copyright of a commissioned work shall be provided for in a contract between the commissioner and the commissioned party”, leading to debate as to whether the moral rights in a commissioned work should also be vested in the commissioner.

When arranging for the vesting of the copyright of a commissioned work, parties are advised to avoid expressions such as “all rights pertaining to the copyright shall vest in a certain party”, or “the copyright shall vest in a certain party”. It is better to provide exactly which rights go to the brand owner and which to the artist in order to avoid any disputes.

Licensing copyright. The brand holder mainly uses the artist’s work based on licensing agreed in the contract.

legal perspective on co-branding
Huo Qiyi
Paralegal
ETR Law Firm

In addition to economic rights, there is room for licensing the right of publication and the right of alteration among the moral rights of an artist. It is rare for an artist to publish a work and exploit its economic value without involving any economic rights. If the right to publish cannot be licensed to another, then there is no room for the use of other property rights.

With respect to the latter, the right is mainly concerned with minor textual or terminology changes to the work, or revisions needed for brand publicity purposes, and does not involve changes to the author’s intention; so there is nothing inappropriate in the author granting permission to another to make changes to his work.

One of the more common ways of licensing is for the artist to license the brand holder to freely produce and sell the work during a certain term. Once the term expires, the brand holder is required to cease production but may, for a certain period of time, continue selling products for which production has completed.

Alternatively, the parties may opt not to set a licence term, but permit the brand holder to produce and sell a certain quantity of the product.

ARTISTS’ PERSONALITY RIGHTS

What the brand holder needs to use is not only the artists’ portrait and name, but also their renown. The brand holder must obtain the express permission of the artist for the use of an artist’s portrait, and the permitted purpose and duration should be as detailed as possible.

However, the brand holder does not need to obtain the artist’s permission to use their name and renown; listing the artist’s name is a manner of protecting the artist’s right to attribution, while listing some of their renown is merely stating an objective fact.

The artist has the right to hold the brand holder accountable for any abuse or misuse, however. Furthermore, the artist should demand that the brand holder not use any language that would mislead the public into thinking they are the spokesperson for the product when using an artist’s portrait, name and/or renown for promotional purposes.

OTHER COMMERCIAL CONSIDERATIONS

(1) Restrictions on competing products. Stipulating the competing products and defining the co-operation are usually key in practice. For the former, the most secure approach is to take the “definition plus enumeration” model, i.e., explicitly list the products included in the competing products and prevent omissions from the list by setting a definition.

For the latter, it is suggested that for clauses such as “shall not co-operate with competing brands or similar products of certain brands”, the scope of “co-operation” be extended to the initial negotiations with the intention of co-operation to safeguard maximum interests of the brand.

(2) Restrictions on commercial use. For commercial considerations, the brand holder may also impose certain restrictions on the artist’s commercial use of the design outcomes after the end of the collaboration, primarily to prevent the design outcomes from being used repeatedly within a short period of time, thereby affecting the previous co-branding brand holder.

(3) Ethics clause. The core content of this clause should be that if a party commits a certain improper act during co-operation, impairing the public perception and affecting the commercial interests of the other party, the other party has the right to unilaterally terminate the contract and demand that the opposite party bears corresponding liability for breach of contract.

The specific improper act can be determined with reference to the model for determining competing products, and the term should not be limited to the period of co-operation or the contract term, but may be extended to before or after it.

Cecilia Chen is a partner and Huo Qiyi is a paralegal at ETR Law Firm

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