Underwear Ads and China IP Licensing

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Staring down at the throngs of shoppers on Beijing’s Xinjiekou Nandajie Avenue, a busy commercial thoroughfare about a mile west of the Forbidden City, was a white girl who looked all of 12, reclining in a matching bra-and-panties set adorned with Disney’s signature mouse-ear design. In a particularly creepy detail, the pigtailed child was playing with a pair of Minnie Mouse hand puppets. In the upper left-hand corner was the familiar script of the Disney logo.

At the moment, the story du jour in the U.S. concerns some photos taken of some famous 15-year-old girl that I’ve never heard of – Miley Cyrus. Is "Miley" even a real name? Is someone making all of this up? But I digress.

The excerpt above is from a Slate story about another Disney-related photo of a young, scantily-clad girl, this time in Beijing. Click here for the photo. I’m not putting that thing in my blog or this post will end up on of those web sites (the kind with lots of pics of kids that is monitored by the FBI).

Anyway, the article discusses Disney’s reaction to the photo and their explanation that it was the work of a China licensee acting without their knowledge. Good opportunity to remind all those trademark, copyright, patent and know-how licensors out there that not only are they obligated to track product quality under China law, but they should also make sure that strong audit rights (financial and otherwise) are written into their license agreements and that they should reserve the right to approve all advertisements and promotional activities prior to publication or dissemination.

Now, I do not doubt for a minute that Disney’s pro forma license agreements contain all those terms and conditions. I’ve never done any work for them directly, but this is fairly standard stuff. What is unfortunately not standard in the China market is for licensors to actually use all those rights.

As the article notes, it is difficult to keep track of all those licensees out there – true enough. But in this age of global information and PR disasters, that’s not good enough any more. Even one slip up can have disastrous effects on a global brand, and certainly Disney has an image to uphold that is not necessarily helped by underage girls in revealing garments.

Actually, the ad itself is not over the top or anything. Maybe some religious types who are extremely sensitive would object, but I doubt most folks would care all that much. On the other hand, China’s advertising laws are very strict when it comes to the use of children in ads, so if anything, this kind of thing is something that really should have been on Disney’s radar screen as part of their overall licensing program.

Licensors need to be more involved with the activities of their licensees – there are some side benefits to this as well, such as better relationships, less chance of IPR infringements, etc. By the way, this advice holds true for licensors of any kind, including franchisors. This is one of the reasons that many large international franchisors (including some here in China) do their own advertising and promotions and have unit licensees kick in annually to  country or regional PR funds. More control is almost always a better thing.

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