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If you use the character design you created yourself, there should be no problem. However, in actual business situations, it is more likely that you will outsource the design to someone else. In such cases, it is necessary to clarify the rights to the character design. Otherwise, there may be cases where a dispute arises even if the trademark has been registered.
Table of Contents
Problems with character design
We advised that you should register a trademark when developing a business using characters (see the article below).
If you are using the character design you created yourself, there will be no problem. However, in actual business situations, it is more likely that you will outsource the design to someone else. In such cases, it is necessary to clarify the rights to the character design. Otherwise, there may be cases where a dispute arises even if the trademark has been registered.
Character business seen in the Hikonyan incident
Hikone City is recruiting image characters for the 400th anniversary festival of Hikone Castle. The application guidelines stated that all rights, including ownership (copyright), regarding the selected characters belong to the 400th Anniversary Festival Executive Committee (later transferred to Hikone City). The character chosen is a cute white cat wearing a helmet. Yes, this is the Hikonyan you all know. Hikone City, which has successfully transferred the copyright, will register the adopted character as a trademark (Trademark Registration No. 5104692).
However,the author of Hikonyan will file a civil mediation requesting that Hikone City and the executive committee stop using the illustration. Why did such a dispute arise even though the copyright had been processed and the trademark registered?
What is copyright?
Copyright is a bundle of various rights (subdivision rights). Subsidiary rights include the right to freely copy a copyrighted work, the right to change the content of a copyrighted work, and the right to upload a copyrighted work to the Internet, and each exists as a separate right such as the right of reproduction, right of adaptation, and right of public transmission. For example, it is possible to handle rights such as ``You may copy the image freely, but we do not give you the right to upload it to the Internet.''
Important: Among branch rights, the right to change the content of a work (adaptation right) is special, and unless there is a clause in the contract stating that permission to change the content is specified, the adaptation right remains with the assignor (in most cases, the person who created the illustration) (Copyright Act Article 61, Paragraph 2).
What are moral rights?
On the other hand, apart from copyright (subdivisional rights), there is a right called moral rights. It consists of three rights:
Right to maintain identity
Right not to have content altered without permission
Publication rights
Right not to have copyrighted works published without permission
Right to display name
Right to state the author's name
Note: These rights are non-transferable. In other words, even if the copyright is transferred, the moral rights remain with the illustration creator (author).
Problems with the Hikonyan incident
Let's go back to the Hikonyan incident. In this case, although the terms and conditions stated that ``all rights such as ownership (copyright) belong to the 400th Anniversary Festival Executive Committee,'' there were no terms and conditions regarding adaptation rights or altering the content. The illustration creator argued that the transferred copyright was for the following three types of illustrations, and did not allow him to create illustrations in other poses or to create costumes or stuffed animals (in other words, he did not transfer the adaptation rights).
Three types of illustrations targeted for transfer
Jumping pose
Sitting pose
Sword brandishing pose
Also, although the original illustration did not have a tail, the stuffed animal made by Hikone City did have a tail, and they filed for arbitration on the grounds that this was an unauthorized alteration of the content of the copyrighted work and violated the right to integrity.
Contractual notice
In the Hikonyan incident, a dispute developed because the copyright treatment was not clear. In light of this incident, when commissioning a character design to someone else, please be aware of the following points when creating a copyright transfer agreement for that design.
1. Processing of adaptation rights (also refers to derivative works)
If it is not clearly stated that the right of adaptation, which is one of the divisional rights, will be transferred, it may lead to a dispute like the Hikonyan incident. At this time, be sure to also clarify the rights handling for copyrighted works whose content has been changed (illustrations in different poses, stuffed animals, etc., legally referred to as "derivative works").
Point: Specify that rights regarding adaptation rights and derivative works belong to the assignee
2. Non-exercise of moral rights
Moral rights are not transferable. Instead, you can avoid exercising the author's moral rights by clearly stating in the contract that the author's moral rights will not be exercised.
However, from the standpoint of the creator of the character design, it is difficult to accept such a contract, as it may mean that no matter how severe the changes are made, there will be no complaints at all.
Recommendation: Basically, the author's moral rights should not be exercised, but it would be a good idea to obtain permission from the character design creator (author) when modifying or modifying the character design, and to have some control over the copyrighted work.
In any case, if the creator of the character design and the user are different, it is important for both parties to communicate and compromise so that neither party is at a disadvantage and business runs smoothly.
By the way, in the Hikonyan incident, we finally settled on the policy ofcreating Hikonyan in different poses.
About the scope of trademark rights
Trademark rights extend not only to identity but also to the extent of similarity (range of similarity). Characters are expected to take various poses, but it is not necessary to trademark all of the poses. If you register one of the standard poses as a trademark, you can protect other poses as they fall within the similar range.
When it comes to character designs, be sure to properly handle copyrights and register trademarks so that you can use them smoothly for business. We also accept copyright inquiries. Please contact us if you have any concerns.
Inquiry about this article
Are you having trouble with rights related to your character business?
For inquiries regarding copyright and trademark rights, please feel free to contact us using the form below.
AUTHOR
Takefumi SUGIURA （杉浦 健文）
EVORIX Intellectual Property Law Firm Managing Patent Attorney
Supports clients across IT, manufacturing, startups, fashion, and medical industries, covering patent, trademark, design, and copyright filings through trials and infringement litigation. Specialized in IP strategy for AI, IoT, Web3, and FinTech. Member of the Japan Patent Attorneys Association (JPAA), Asian Patent Attorneys Association (APAA), and Japan Trademark Association (JTA).
