This blog is part of the History and Intellectual Property (H-IP) series. The cycle of creativity and innovation enabled by IP is vital for the continued success of creators and innovators around the world, as evidenced throughout history and across all industries. H-IP looks at various aspects of IP through case studies connecting creativity and innovation from history to the present.
It hardly needs saying, but the holidays are upon us. Anyone purchasing gifts this holiday season will interact with intellectual property (IP) in some form, and hopefully via safe and legitimate means, as counterfeits are just as harmful to consumers as they are to the economy. Purchasing officially licensed products could save consumers from dangerous products and keep money out of the pockets of criminals and terrorists.
Popular shows and iconic characters—like Charles M. Schulz’s Peanuts or Dr. Seuss’ Grinch—are found on toys, towels, dishes, greeting cards, ornaments, décor, clothing, and more throughout physical and online retail stores alike. Taking a character from a creative medium, such as a book or movie, to merchandise often requires rightsholders to work with other industries, predominantly manufacturing. Since most studios and publishers—or other rightsholders—do not own manufacturing facilities, they enter into licensing agreements with those who can bring their creative innovations to the marketplace.
Licensing is one of the most prominent and productive ways IP enables business and industry growth, as well as consumer access to innovative products. Through licensing, IP owners enter into a contract that allows a licensee certain rights (often derivative rights) to the rightsholder’s IP in exchange for a fee called a royalty. The original rightsholder grants permission to the licensee to engage in certain acts normally reserved for the rightsholder alone, and both profit from the licensee’s use of the rightsholder’s IP. For example, an officially licensed manufacturer has the right to produce products featuring a trademarked logo or copyrighted text, even though the use of the logo and text are legally reserved for the rightsholder. Thus, from dolls to boardgames and greeting cards to clothing, many of the products featuring the world’s favorite shows, people, characters, teams, universities, quotes, and scenes reach consumers through cross-industry licensing agreements.
It is important for rightsholders to maintain control over their works, including derivative works, so the licensee must operate within the terms and limitations of the contract. Under copyright law, creators maintain protections known as moral rights. These rights allow creators to protect the personal and reputational value of their work by preventing the revision, alteration, or distortion of the work. After all, the world does not need a doll featuring a Satanic Grinch that eats children. Licensing agreements allow rightsholders to maintain a certain level of control over how their works are portrayed, offering consumers a coherent vision of their beloved characters and shows.
Theodor Geisel, a.k.a. Dr. Seuss, first published his book How the Grinch Stole Christmas! in 1957. Warner Bros. acquired certain rights to the story, releasing the first cartoon movie in 1966. At least four more performance-based, derivative works followed: Halloween is Grinch Night! (1977) by DePatie-Freleng Enterprises, a 1998 musical, Universal Pictures and Imagine Entertainment’s live-action version in 2000, and Universal Pictures and Illumination Entertainment’s cartoon version in 2018. Each iteration of this story renews interest and sparks a new generation of consumers’ love for the iconic character. This drives demand for the original story as well as additional products featuring the Grinch manufactured by the rightsholder’s partners pursuant to their licensing deals.
Dr. Seuss Enterprises, the official rightsholders for Dr. Seuss’ works (copyright) and branding (trademarks), utilize various forms of licensing to meet this demand. Geisel co-founded the Random House’s Beginner Books imprint in 1957; therefore, it makes sense that Penguin Random House LLC continues to publish Dr. Seuss’ books. Chase Art Companies is the only officially licensed publisher for artwork by Dr. Seuss, so anyone seeking copies of The Grinch Reflections Suite—two illustrations depicting Geisel’s inspiration for the story—must contact authorized (i.e., licensed) galleries. Dr. Seuss Enterprises also licensed the Grinch for dog toys, costumes, pop sockets, tumblers, games, puzzles, Funko Pop figures, and more.
But why does having officially licensed products matter? On-brand is just a status symbol that benefits big business, right? No harm, no foul? Except, there is significant harm for both consumers and the economy.
Counterfeit goods are not subject to the same quality and safety standards that officially licensed products are. Thus, many contain harmful (potentially lethal) doses of chemicals, such as lead in toys, cadmium in jewelry, or arsenic in cosmetics. Counterfeit safety equipment, such as airbags, helmets, and baby carriers, have not undergone the rigorous testing legitimate products are subjected to; therefore, they can easily break and cause injury rather than prevent it. Counterfeit electronics and lithium-ion batteries may explode or destroy the product they were meant to charge because they are made from low-quality components and are not manufactured to safety standards. So that really cheap cat toy, sweatshirt, lip balm, teething ring, or video game with the weird-looking Grinch on it could actually cost far more in healthcare expenses than simply purchasing the legitimate product from the start. (Also, do not assume that any products for sale on well-known online retail sites are automatically legitimate.)
In addition to harming consumers, counterfeit goods produce significant economic harm. According to the U.S. Customs and Border Protection, “purchasing counterfeit goods often supports criminal activities, such as forced labor or human trafficking.” Additionally, illegal counterfeiting generates billions of dollars in global revenues each year, and much of that money is used to fund terrorism and organized crime. Money that should be used to support legitimate businesses, large and small, and from IP owners to the line workers in the officially licensed manufacturing facilities. Thus, opting for counterfeits gut-punches the global economy several times over.
Meanwhile, IP offers certain assurances and protections for consumers. Rightsholders and law enforcement agencies use IP (predominantly trademarks) and licensing agreements to track legitimate supply chains and identify potential counterfeits, removing them from circulation.
Times are hard, and budgets are small. But purchasing legitimate products is the safe and responsible thing to do for loved ones and the global good.
As the Grinch once again invades store shelves and television screens this holiday season, think of all those benefitting from Dr. Seuss Enterprises’ licensing of the beloved character. From the janitor at the art gallery to the production assembly operator at the manufacturing plant, and from the safety inspector to the beaming child. IP enables.
Have a safe a joyous holiday season!