Created by the internationally renowned Dutch artist Florentijn Hofman, the giant rubber duck has achieved an iconic status in Western pop culture and in China, which is often symbolically linked to bathing. Recently an agreement on animation brand authorization of the rubber duck image was concluded between Florentijn Hofman and the organizing committee of Beijing International Design Week. Under the agreement, the two sides decided to hire attorneys to protect the IPR.

United States and Japan are taking the path of development of Disney-style: animated film, derivative products development, royalties and other income received. Among all the income Disney achieved, derivative products contribute 70%. However, this kind of business model is not optimistic in China. Statistics show that only one out of 100 commodities is licensed. It's worth noting that the wide market potential and high growth rate in this emerging market have attracted enormous investment from numerous animation companies. However, products qualities, counterfeits and IPR infringement are matters Chinese animation companies have to face.

Profit Model of Animation Industry

The United States is the birthplace of animation industry and Disney is the first company, which discovered the economic value of animation images. "Just after the Mickey Mouse has made its success, a furniture manufacturer paid 300 US dollars to Disney, so that they can print the Mickey Mouse image on their products, which was Disney's first license fees they got. Facts proved that brand license is the most efficient way to promote animation brand and to target the maximizing value." says Huang Jin, a representative from a Hangzhou based Animation Company. According to Huang, over 3000 licensees have been authorized to use Disney cartoon images on over 100,000 kinds of products globally. The Mickey Mouse image alone has produced 1.8 billion to 2.25 billion US dollars of licensing revenue.

By relying on efficient business operation, Disney has spread the model of "cartoon – joy - profit" globally and built up a gigantic industrial cluster called "animation industry chain". Pikachu is one of the species of Pokémon creatures from the Pokémon media franchise in Japan. Up to now, there are 1,122 companies are producing products derivate from Pikachu images. In Japan market, Pikachu's annual copyright license fee amounted to 100 billion yen. Another successful example of this kind of business model is Cars, a feature-length computer-animated movie. Box offices of Cars is 100 million US dollars, but its licensed products have produced 5 billion US dollars revenue.

Compared to the animation industry development in USA and Japan, China's animation and brand license have long way to go. According to Liu Chungang, secretary-general of Beijing Animation and Games union, foreign brands have occupied the most part of the market over domestic brands in China.

Pleasant Goat is one of the most popular animations in China and is now taking lead in brand license. The Pleasant Goat brand has been licensed on more than 1000 types of products in over 400 categories and now has produced more than 1 billion yuan revenue.

Quality is the keynote

Animation brand license starts from the good original animation works and choosing a partner plays crucial role in building up the animation industry chain. "In America, there's a set of strict procedures for brand license. As quality of derivative products have a tremendous impact on animation brand, the right holders have strict evaluations over licensees. The harm to the animation brand brought by the poor quality of the derivative products is the last thing the right holders want to see. Rainbow Blue Cat Rabbit was once a popular cartoon, not only got good ratings, but also had good market response in brand license. But due to the poor quality of the derivative products, the animation brand images have been seriously damaged." Says Liu Chungang.  

Luckily, domestic animation companies have noted this and put extra effort into improving products qualities. According to a representative from an animation company, the animation companies are cautious in choosing their partners, as they have to face the realities that professional manufacturers have limited sales channels, but those with wide sales market fail to produce qualified derivative products. The Chinese domestic animation companies indeed have a long way to go.

Fighting Piracy Promotes development

In addition to improving the quality of the original works and finding the right cooperative partners, various infringements and piracy also challenged Chinese enterprises in their cartoon brands authorization. In the recently held seminar for "IPR Trade and Authorization Cooperation", famous cartoonist Huangyulang pointed out that the counterfeit cartoon-derived products, have more varieties, are often distributed faster than the authorized, but the quality of those is quite low, which has made a huge negative impact on the authentic cartoon's brand authorization.

Nearly each cartoon enterprise has encountered piracy. In a Commercial fair for Cartoon Brands Authorization, principal of a cartoon enterprise told the journalist that in kiosks on streets and lanes and in e-tailings, there are large quantity of low-quality counterfeit products and it is hard to deal with these problems but to improve the quality of the authorized products in order to compete in the market.

"Pleasant Goat", a Chinese famous cartoon, is especially the main target to the piracy. "In the 1 billion yuan output value of the brand "Pleasant Goat", a large portion of it is 'contributed' by the counterfeit products, while authorized products only take up 30% of the market. We deeply feel that consumers, dealers, producers and sellers have limited knowledge about intellectual property rights" said a relevant person from Guangdong Creative Power Entertaining (CPE), who also told the journalist that CPE, which now possesses more than 200 image copyright registrations, lays its emphasis on the development and protection of intellectual property rights, and has established its particular legal departments as well as the National Lawyers Alliance. She advocates of constructing a complete copyright-protecting mechanism that works on various aspects i.e. legislation, enforcement, and supervision, etc. to protect the legal rights and interests of the authorship.

Liuchungang comments that cartoon brands authorization involves in various fields such as Trademark, Copyright and Patent, but many enterprises now have not realized the importance of intellectual property rights protection; meanwhile, the high cost and low compensation of rights protection make some enterprises give up their rights. Hope that the relevant sectors could intensify resisting and punishing piracy, and promote the expansion of cartoon brands authorization market.

(China IP News)