Business planning, Legal, Management

Star Wars bathers prompt warning over licensing fees

Michelle Hammond /

A legal expert says start-ups need to consider the cost of licence fees before they adorn their products with images from movies or books, after a Brisbane fashion label produced Star Wars images on its clothing range.

 

Black Milk Clothing, led by owner and designer James Lillis, began operating out of Lillis’ kitchen three years ago.

 

The business initially produced Star Wars-inspired products illegally, until it received a cease and desist letter from Star Wars creator George Lucas.

 

In an unlikely twist, Lucas’ film production company Lucasfilm eventually agreed to license the images. However, the new swimsuits will cost more than the originals because of licence fees.

 

The label has launched a pair of swimsuits inspired by two Star Wars characters, R2-D2 and C-3PO, which, according to marketing manager Cameron Parker, are “turning geek culture sexy”.

 

James Omond, of commercial law firm Omond & Co., says for a start-up, it is easy to take an image from a book or a movie and place it on clothing.

 

“Just because it’s easy doesn’t mean it’s legal. If there’s money to be had, the production companies will come calling,” Omond says.

 

Omond points out that a lot of books and movies make more money from merchandise than from the original product, so production companies are wary of spin-off products.

 

“These guys (Black Milk Clothing) were lucky that… there was a real demand for [their products], which allowed Lucasfilms to say, ‘Here’s a good business opportunity’,” he says.

 

“These guys obviously make good quality stuff that will wear the margin of the licensing on it.”

 

“If you are going to licence images, you can usually add about 25% [to the cost of the product] if it’s a well-known movie.”

 

Omond says start-ups need to ask themselves whether a book- or movie-inspired product is going to differentiate the product and drive sales. He uses the Wiggles as an example.

 

“The Wiggles characters are on bandaids. If you’ve got young kids, some hate bandaids. If Dorothy the Dinosaur is on the bandaid, they’re happy with that,” Omond says.

 

“Instead of paying $7 for a box of Band-Aids, you might pay $10 because it saves you so much grief when you’re trying to use the product.”

 

“That’s an example of where the manufacturers think it’s worthwhile paying the additional royalty to stand out on the shelf.”

 

Omond says start-ups might assume they’ll get away without paying licensing fees because no one will notice, but this is not the case.

 

“With the Star Wars bathers, they were doing it on their kitchen table so probably didn’t think 20th Century Fox would become aware of what they’re doing,” he says.

 

“Just because you’re doing it in your backyard and not retail stores, you might think you’re somehow able to get away with it [but] the big companies do follow up on that.”

 

“If you’ve decided that you want to use a product that is taking an image from a movie or whatever, you need to establish whether it is just a point of reference or a homage to it, or are you actually copying it?”

 

“If you are [copying it], you do leave yourself open to legal demands.”

 

“If it does look like a straight out use of the image, you need to look at… approaching the licence holder and saying, ‘This is what I want to do’.”

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