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The Legal Strategies of animation projects: merchandising
On the occasion of the first edition of Expo Pixel 2013, the association of Italian producers Cartoon Italia held the workshop “Multiplatform Animation: the cross-media exploitation of animation projects”.
Among the other speakers, Agostino Clemente, partner of Ughi e Nunziante law firm, described the Legal Strategies of the animation projects in a thorough interesting speech.

Different themes have to be considered for the development of a project in the animation industry.
First of all mature companies require legal assistance directed at problem solving and in particular with regard to the day to day running of the business and in respect of the different phases of development of an animation project right through to the production and post production aspects and exploitation of the property. The creation of an animation product also results in the creation of a “legal” product involving a chain of rights in copyright, trademarks, television rights, secondary rights, residual rights and derivative rights such as publishing and merchandising.

Concerning merchandising, the exploitation of the property through the creation of products based upon the property involves a number of contractual relationships with licensees, distributors, master licensees in which the use of the trademarks and copyrights must be strictly regulated to avoid unauthorised use and exploitation of the property and in order to maximise its economic exploitation.

The international merchandising operations.

These are operations between two companies which have their principal offices in different countries.

There are different types of merchandising operation. The following structure is an example of the legal strategy to adopt.

Distribution through agents: an agent is engaged by the licensor to promote the conclusion of contracts with the latter with licensees based in the territories of the agent’s competence. The relationship between the agent and the licensor is that of an ordinary agency relationship whereby the agent is paid commission on the basis of the activity carried out.

Distribution through an agent without powers of representation – the contract is stipulated between the agent and the licensee but the license is between the owner of the property and the licensee. The license is managed by the agent which invoices and collects the royalties. At the expiration or termination of the agency agreement, the license is managed by the licensor directly.

Distribution through a Master License: The licensor enters into a contract with a “master licensee” which acquires a license in respect of certain categories of products. The master licensee stipulates contracts with licensees in its territories its own name. The master license is usually entered into between two companies based in the same country. It is usual practice for the master licensee to pay a minimum guarantee to the licensor.

Towards the future - oligopoly or network of companies - The critical mass, focus on specialization, networks of cooperation, international co-production and work splitting, Italian animation as the new protagonist.