Introduction

Imagine a well-known FMCG brand launching an advertising campaign featuring a beloved Bollywood character, without obtaining any permission. While it is attention-grabbing and culturally resonant, it could also be a lawsuit in the making.

Across India, brands are increasingly leveraging the massive appeal of popular movie and web series characters, hoping to stand out in a crowded and noisy market. However, as the momentum of character merchandising strengthens, so does legal scrutiny. This article aims to elucidate how to use movie characters in advertising without crossing legal boundaries, and to analyze the key points that brands, marketers, and their legal counsel need to understand.

The Rise of Character Merchandising in Indian Advertising

Character merchandising refers to the commercial exploitation of a fictional character's identity for product promotion. In the United States, merchandising and licensing account for 20%–25% of film revenue. According to industry expert data cited in a recent report by Business Standard, this figure is only 1% in India. However, this gap is narrowing rapidly.

Who Actually Owns These Rights?

Under Indian intellectual property law, production houses retain exclusive rights over their movie characters. This means any brand wishing to commercially utilize a movie character must obtain a license directly from the production house or the relevant rights holder. Using a character without authorization exposes a brand to risks of lawsuits, injunctions, and reputational damage.

Industry insiders unanimously confirm this position: while audiences may be passionate about certain characters, all relevant commercial rights remain with the production house, and any "utilization" must be appropriately considered and formally authorized.

What Brands Must Do Before Using Movie Characters

Before any character appears in an advertisement or promotional campaign, brands should ensure the following:

Verify Who Owns the Rights: Rights may belong to the production company, the streaming platform, or be shared among multiple parties. Thorough due diligence is mandatory before beginning any creative work.

Obtain Explicit Permission: Signing a formal licensing agreement that covers territory, duration, permitted use, and royalty terms is crucial. Verbal agreements or informal consensus are insufficient.

Understand the Scope of the License: A license to use a character's image may not extend to the use of their name, catchphrases, or likeness in specific contexts. Details are critical.

Handle the Overlap Between Trademarks and Copyright: Movie characters may be protected simultaneously by copyright law (as artistic works) and trademark law (if registered as trademarks). Brands must navigate these two legal systems with caution.

Differences Between India and the West: Why Licensing Remains a Secondary Consideration in India

In Western markets, merchandising and licensing are structured, primary revenue sources for production houses. In India, this is largely viewed as a marketing consideration—an afterthought rather than a formalized commercial pillar.

This mindset creates risks for both parties. Production houses fail to fully monetize their intellectual property. Brands fail to properly acquire the rights they require. And when disputes arise, the legal consequences for all parties involved can be extremely severe.

Although the Indian entertainment industry is becoming commercially more mature, the infrastructure required for formal licensing—standard contracts, centralized rights registries, and industry-wide norms—is still evolving. Until this infrastructure matures, brands must be proactive in conducting legal due diligence.

Key Takeaways

The popularity of a movie character does not confer the right to use it for commercial purposes.

Licensing must be explicit, written, and tailored to specific usage scenarios.

Unauthorized use will invite lawsuits, injunctions, and reputational damage.

The market is evolving; investing in a sound legal framework now is far less costly than taking enforcement actions later.