Article written by: Sue Ironside | Monday 14th April 2014
Celebrity endorsements have become significant marketing tools in our mass media environment. From Dan Carter’s powerful kick to Miranda Kerr’s dazzling smile, a superstar’s thumbs up will help ensure your product is remembered.
Brand owners are forewarned though! Using a celebrity’s name or likeness without their permission can be a violation of the Fair Trading Act 1986 (the “FTA”) and the common law tort of passing off.
The FTA prohibits traders from engaging in conduct that is misleading or deceptive. This includes untrue statements regarding endorsements and sponsorships. For someone to succeed under the FTA they must have substantial goodwill and reputation in New Zealand.
A violation of the FTA occurred in the 2001 case New Zealand Rugby Football Union v Saint Publishing Ltd. The defendant, Saint Publishing, was preparing to release a calendar which featured photographs of then All Blacks Captain, Anton Oliver.
Oliver had a contract with the New Zealand Rugby Football Union (NZRFU), which prevented him from lending his promotional services to others unless he had NZRFU’s consent. Saint Publishing did not have the permission of Oliver or NZRFU to include the photographs. NZRFU felt that the unauthorised use of Oliver’s image diminished his significant goodwill and reputation in the marketplace and diluted the value of their contract with him.
The judge sided with NZRFU and held that consumers viewing the calendar would believe that Saint Publishing was associated with Oliver or the NZRFU. The defendant had breached the FTA and the calendars never left the warehouse.
In 2013, improper use of a celebrity’s image was illustrated in the UK court case between Topshop and singer sensation Rihanna. Topshop produced a line of t-shirts featuring photographs of Rihanna without her agreement. The superstar successfully sued under passing off by demonstrating that she had sufficient goodwill and reputation in the same trade channel Topshop operated in and that there had been a misrepresentation of her image resulting in damage. Kiwi commentators believe that the same determination would be reached should such a situation arise in New Zealand.
If you are lucky enough to nab a celeb do not let the Hollywood lights blind you. Spokesmen should be chosen carefully to ensure they lend credibility to a product. Make sure to have a strong sponsorship contract in place to protect against mishaps. Agreements can vary in their complexity and structure but clauses governing morality, compensation and public appearances should be ironclad. Stars can experience a fall from grace and you do not want the reputation of your brand to join them in the plummet.