In late September of last year, Beijing’s No 1 Intermediate People’s Court heard a case involving Chinese Press using pictures of Beatrix Potter’s fictional character, Peter Rabbit, on books. The British company Frederick Warne Co. Ltd. alleged infringement upon their trademark of Peter Rabbit illustrations, which was registered in 1994 (a decision has not yet been reached in case).

The rights attached to a fictional character can generally be referred to as “property rights”. As is case with most property, those rights include right to use a fictional character’s name, image, appearance, etc., to receive benefits resulting thereof and right to dispose of it. These rights are in principle owned by creator of that character unless lawfully transferred, created in course of his professional activity for his employer, commissioned to be created, or conferred on creator’s descendants for exploitation of his/her work.

The secondary exploitation of a fictional character’s essential features by its creator in relation to various goods and/or services to exploit consumers’ affinity with that character can be defined as character merchandising. This merchandising activity is very seldom conducted by creator of fictional character, and thus various property rights vesting in character are subjected to contracts which authorize one or several interested third parties (the merchandisers) to use character. The main economic rights relevant to merchandising of characters are rights of reproduction, adaptation and communication to public in any manner or form--books, for example.

Beatrix Potter was a pioneer in secondary exploitation of literary works. The animal characters from books Peter Rabbit and Squirrel Nutkin were recreated and are still being recreated as still as soft toys or other articles for children. This merchandising successfully continues today, with a wider range of merchandise. On May 25th, 1919, Frederick Warne & Company Limited was registered. Although imprint is still used by Penguin Books, Frederick Warne & Company Ltd really ceased to exist on December 31st, 1984.

LEGAL PROTECTION

The rights attached to a character may enjoy legal protection in a number of forms, either automatically (copyright), or following an act before a competent authority (for example, trademark or industrial design registration).

Copyright

Copyright protection starts on date of creation of work as expressed in a material form such as writings, drawings, etc. Contrary to industrial property rights such as trademarks or industrial designs, a work enjoying copyright protection is protected against all unauthorized uses, irrespective of goods or services covered by each use. Generally, no one may exercise economic or exploitation rights without authorization of copyright owner. Needless to say, enforceability of such IP rights is not dependent upon effective registration or patent granting, although there are public registrars to this effect that provide evidence of date of creation of such works.

It is generally accepted that copyright must be recognized and protected at least throughout life of author. After his/her death, his/her work continues to be protected for a certain time. Under Article 21 of China’s Copyright Law, copyright protection extends through lifetime of author and 50 years after author’s death. Article 21 later states in paragraph two that “where copyright belongs to a legal entity… period shall be fifty years provided that any such work has not been published within fifty years after completion of its creation”. Upon expiry of term of protection, work falls into public domain. It is no longer protected by copyright and can be used by anyone without authorization.

It should, however, be noted that, through other forms of legal protection (for example, trademark protection), some works may continue to be protected against unauthorized use. Because Beatrix Potter created fictional character of Peter Rabbit herself, she enjoyed copyrights until her death in 1943. Afterwards, copyright was probably managed by her descendants unless previously transferred by an act of law thereafter for following 50 years.

Copyright vs. Trademark (Effectiveness in its Use for Fictional Characters)

When does a fictional character become a trademark in a strict sense? A mark is a symbol which distinguishes goods or services of one entity from goods or services of another entity, that is, it is intended to indicate who is responsible for goods placed before public. There may be many makers or sellers of same goods, and they may all use different marks which all consist of pictorial devices, without any words at all. The consumers distinguish between goods of competing traders solely by means of their marks on basis of expected properties or a certain quality. When any consumer tries to purchase one of these books online, a notification comes up on screen: “The Penguin Online bookshop is recommended online shop from which to purchase Beatrix Potter titles”. This is a good instance of natural way trademarks work: Penguin Publishers is industrial origin of books, and little logo of a penguin appears in these goods to tell consumers which is publishing company.

For that to be possible, marks must be clearly recognizable. In other words, marks must be distinctive in order to apply for registration, as referred to in Articles 9 and 11 of PRC’s Trademark Law. But then, how distinctive is a trademark consisting of a globally known fictional character first published and thus introduced to general public in 1902? Article 9 of Trademark Law sets forth condition that applied trademark “shall not conflict with any other legal rights acquired earlier by others”. It could be argued that when a fictional character’s copyright expires and falls into public domain, it forms part of that ‘conflicting’ legal art and rights, as it is a legal text (Copyright Law) which concedes this right upon citizens.

A second point on effectiveness of PRC trademark law for fictional characters is that a trademark must be used in same way it is registered and for goods or services so elected, as set forth in Article 51 of PRC’s Trademark Law. It should be noted that, mainly in case of cartoon strips and animated cartoons, copyright protects each different original pose adopted by character. The same cannot be expected from a trademark, which, one can argue, makes it rather impossible for any trademark consisting of a fictional character of public domain to be distinctive at all.

Personal names are intangible assets which are used more and more often by enterprises, as they increasingly rely on market appeal of famous people to sell products. Many personal names have a high level of recognition and awareness at all levels of society and as a result can have a high economic value. In practice, once status of fame is reached, name may be used in many commercial activities with a fair prospect of profitable business.

When Michael Jordan’s name was once used in Nike products, within a certain period of time, fans and consumers alike stopped saying ‘I am wearing a pair of Nikes’, and instead began saying ‘I have a pair of Jordans’, eventually turning this model of Nike basketball shoes into a powerful brand. Jordan’s brand has since been extended to a wider range of products and even services (restaurants). Many other famous people or celebrities allow their names to be used in connection with perfumes and other products. Such products connote a feeling, an experience of success, and image of person lending their name.

In People’s Republic of China, famous people also register their names as trademarks; however, in China, successful registration of a personal name depends on its cultural value as well as its market appeal. In some cases, people associate a given name with values and moral standards, which could eventually frustrate effort to register with Chinese Trademark Office, as Lu Xun case illustrates.

The Lu Xun Case Lu Xun is a famous writer in China, who was born in Shaoxing, East China's Zhejiang province on Sept. 25, 1881. Shaoxing is a Chinese geographic location known for its famous yellow wine (绍兴黄酒). Some of his literary works are required reading for all Chinese students who attend middle school throughout China.

Needless to say, Lu Xun (as far as I know) never attempted to apply for registration of his personal name as a trademark before he died back in 1936. As a historical note, first Chinese Trademark Law was enacted under Qing Dynasty in 1904.

In 2001, Lu Xun’s grandson founded a wine company, which he named after his grandfather. He also filed an application to register Lu Xun as a liquor brand on behalf of family. The application was rejected by Trademark Office, which also prohibited any commercial activity concerning Lu Xun. The grounds for refusing its registration was contention that it is ‘improper’ to use name of one of modern China’s greatest writers for commercial activities. The Trademark Office alleged that as a public figure, Lu Xun’s fame is not only owned by his family, but by whole of society.

The applicants have appealed to Trademark Review and Adjudication Board. They also successfully registered a trademark using simply characters for Lu Xun in Japan in October 2001. Also in China, an art school successfully registered Lu Xun as a word mark, but trademark comprised more Chinese characters than merely those of Lu Xun (鲁迅艺术学院)(in English, Lu Xun Art School). We set out options for Lu Xun’s descendants and those wishing to register personal names, in general.

1. Options under Amended Copyright Law of PRC

Personality Rights As an author of literary works, Lu Xun was entitled to both personality and property rights. While latter have a term of protection of 50 years after author’s death, former are unlimited in time. The economic rights expired a long time ago.

According to Regulations for Implementation of Copyright Law of PRC, inheritance of economic rights contained in copyright shall be executed in accordance with Law of Inheritance. Chinese morality and social customs suggest that Lu Xun’s descendants have obligation to maintain reputation of their ancestor, an obligation which –with economic rights having expired- can only be carried out through enforcement of his personality rights before courts. But personality rights comprise right of authorship, alteration of one’s work and right of integrity (protection against distortion and mutilation), which are not pertinent to present case.

Also, according to Article 9 of General Principles of Civil Laws, “A citizen shall have capacity for civil rights from birth to death and shall enjoy civil rights and assume civil obligations in accordance with law”. It is clear then, that only a living person can enjoy right to determine, use, or change his/her personal name; his descendants may only inherit those property rights deriving from name for limited period of time stated in PRC Copyright Law.

Authorship Another key issue, moreover, is that copyright protection extends only to “original works of authorship.” Article 3 states clearly kinds of works that can be protected by copyright. To be protected by copyright, a work must contain at least a certain minimum amount of authorship in form of original literary, musical, pictorial, or graphic expression. Names, titles, and other short phrases do not meet these requirements and, therefore, are not entitled to copyright protection, even if name, title, or short phrase is novel, distinctive and/or lends itself to a play on words.

Because trademark registered by art school does not refer to any of Lu Xun’s works over which to claim authorship, descendants are defenceless in this respect.

The descendants can claim copyright through neither economic nor personality rights, only through a bare moral and social obligation to respect and defend reputation of Lu Xun. Authorship is a personality right, and as such is enforceable no matter time, as opposed to economic rights, which expire 50 years after author’s death.

2. Options under Amended Trademark Law of PRC

The Trademark Law of People’s Republic of China, Article 8, provides a definition of what signs may constitute a mark, whether a trade, service, collective or certification mark:

“Any visible sign capable of distinguishing goods of a natural person, legal person, or other organization from those of others, including words, graphs, letters, numerals, three-dimensional signs and combinations of colours as well as combinations of foregoing elements”.