Animation adaptation and licence contracts

China’s animation industry is experiencing an unprecedented IP upsurge, with capital flooding into the market. The rights holder has to adapt to China’s legal environment and approach the terms in the licence contracts intelligently.

Q: How are animation commercialization rights granted in China? A: Certain courts have recognized the right of commercialization as a right of a copyright holder or trademark holder, but China is not a case-law country and these judgments themselves have been criticized as “judges making the law”. At the legislative level, “the right of commercialization” has yet to be expressly enumerated as a right of copyright holders and/or trademark holders, and in practice and theoretical circles, a consensus as to the concept of the “right of commercialization” has yet to form.

When carrying out commercialization licensing, best efforts should be made to specify in detail the contours of the right that is being licensed, e.g. the name, image, lines, etc. of the animated character; and to describe the type of product licensed, e.g. toys, stationery, bags, glasses, etc., including their dimensions, material, colour and quality. It should also be particularly stated whether internet-related products are included within the scope of the grant of rights, e.g. emoji in apps.

He Jing is a partner and Dong Xue is an associate at AnJie Law Firm