Just recently, media around the world reported about the Spanish football club Real Madrid spending the incredible sum of EUR 100 million to acquire the Welsh midfield star Gareth Bale from Tottenham Hotspur. This caused a flurry of excitement and many people were left wondering whether it is justifiable to spend such amounts on a single human being playing football. However, one has to bear in mind that football has become an entertainment industry and that clubs like Real Madrid are in fact not only acquiring further employees, but also brands with great advertising values. Such advertising values may be comprehensively exploited eg by means of Personality Merchandising.
Although "Merchandising" is not a legal term in Austria, there appears to be an emerging consensus that the underlying concept is based on the transfer of reputation from a popular merchandising object (for example a logo, a trademark, a title, a character, or also a person) to any goods or services in order to improve their sales (this understanding differs from common definitions of the business term "merchandising", but widely corresponds with "licensing" as the term is applied in the United States). Therefore, the attraction and advertising value of a merchandising object is used for commercial reasons to gain profits on a secondary market.
The advertising value of a person as an intangible asset
The advertising value as such is intangible, but it manifests itself in any individualizing characteristic like a person’s name, image, or voice (just like the reputation of a company manifests itself in the company name or the corporate brand). Therefore, the advertising value is exploitable by any use of such characteristics in the course of trade, eg in commercials, on consumer goods, on fan or souvenir items, etc. Having said this, the primary task from a legal point of view is to “find” an exclusive right on which the Personality-Merchandising concept could be based.
According to the historical legal understanding, personality rights shall primarily protect the immaterial interests. But bearing in mind the heavy commercial use of personal characteristics, Austrian courts have come to acknowledge that personality rights do have a "commercial side", which, however, is not hived off as an intangible asset – like, for example, the right of publicity under US law – but constitutes an inseparable part of the right. Unfortunately and incomprehensibly, Austrian courts tend to protect this "commercial side" merely by granting a use claim in accordance with Sec 1041 ABGB (the advertising value being an "asset" used by a third party), whereas they do not see an infringement of personality rights, which would give grounds for injunctive relief. This practice cannot remain uncontradicted, because on the one hand it seems not really plausible that the personality rights do not cover both immaterial and material interests (just like, for example, an author’s copyright) and on the other hand, courts seem to ignore the fact that any unauthorized use of a person’s advertising value violates this person’s right to self determination and therefore affects immaterial interests in any event.
However, against this background, one is well advised to also argue on the basis of unfair competition law. Sec 1 UWG – under certain circumstances – protects entrepreneurial achievements and work results against unfair exploitation – in particular against exploitation by means of free riding. Usually a person’s advertising value too is the result of achievements worthy of protection. Therefore, the use of personal characteristics only for commercial reason is unfair and unlawful.
In addition, the personal characteristics (merchandising objects) could be registered as trademarks. This concept, however, raises some other difficult legal issues that cannot be discussed here in detail.
The advertising value as part of the estate
A person’s advertising value does not disappear at the moment the person passes away – that is an economical fact. But who is entitled to exploit this asset post mortem and for which period of time? The Austrian Supreme Court expressly acknowledges that a person’s advertising value becomes part of the estate. Therefore, only the heirs (and not automatically the relatives) may use the personal characteristics in the course of trade (or grant respective licenses to third parties) and pursue any infringements. Unfortunately, the Austrian Supreme Court has not yet decided about the duration of such exclusive rights. Although the German Supreme court held that the protection expires after 10 years, a period of 70 years (analogous to Sec 60 Austrian Copyright Act) seems to be more appropriate and plausible. In any event, the heirs are well advised to take precautions, eg by registering trademarks.