Introduction

Imagine a popular FMCG brand launching a campaign featuring a beloved Bollywood character — without asking anyone’s permission. It’s catchy, it’s culturally resonant, and it might also be a lawsuit waiting to happen.

Across India, brands are increasingly tapping into the magnetic pull of popular movie and web series characters to cut through a crowded, distraction-heavy marketplace. But as character merchandising gains momentum, so does legal scrutiny. This article is about how to use movie characters in advertising without crossing legal lines and breaks down what brands, marketers, and their counsel need to know.

The Rise of Character Merchandising in Indian Advertising

Character merchandising is the commercial use of a fictional character’s identity to promote products. In the US, merchandising and licensing drive between 20–25% of film revenues. In India, that figure sits at barely 1%, according to industry experts cited in a recent Business Standard report. [1] That gap is narrowing fast. 

Who Actually Owns the Rights?

Under Indian intellectual property law, producers retain the exclusive rights to a film’s characters. This means any brand wishing to commercially exploit a movie character must obtain a licence directly from the producer or the relevant rights holder. Using a character without authorisation exposes a brand to the risk of litigation, injunctions, and reputational harm.

Industry voices confirm this position consistently: while audiences’ enthusiasm for characters is welcomed, all associated commercial rights remain with the producers, and any exploitation must be approached with due consideration and proper authorisation.

What Brands Must Do Before Using Movie Characters

Before any character appears in an advertisement or promotional campaign, brands should ensure the following:

1. Verify who holds the rights: Rights may sit with the production house, a streaming platform, or be split across multiple parties. Always conduct thorough due diligence before any creative work begins.
2. Obtain explicit licences: A formal licensing agreement covering territory, duration, permitted uses, and royalty terms is essential. Verbal agreements or informal understandings are insufficient.
3. Understand the scope of your licence. A licence to use a character’s image may not extend to their name, catchphrase, or likeness in specific contexts. The details matter.
4. Account for trademark and copyright overlap. Movie characters can attract protection under both copyright law (as artistic works) and trademark law (if registered as marks). Brands must navigate both regimes carefully.

The India-West Divide: Why Licensing Is Still an Afterthought Here

In Western markets, merchandising and licensing is a structured, primary revenue stream for producers. In India, it remains largely a marketing consideration — an afterthought rather than a formalised commercial pillar.

This mindset creates risk on both sides. Producers are not adequately monetising their IP. Brands are not properly securing the rights they need. And when disputes arise, the legal consequences can be significant for everyone involved.

The Indian entertainment industry is becoming more commercially sophisticated, but the infrastructure for formal licensing — standard agreements, centralised rights registries, and industry-wide norms — is still developing. Until it matures, brands must be proactive in their legal due diligence.

Key Takeaways 

• The popularity of a film character does not confer a right to use it commercially.
• Licences must be explicit, written, and tailored to your specific use case.
• Unauthorised use risks litigation, injunctions, and reputational harm.
• The market is evolving — investing in proper legal frameworks now is far less costly than enforcement actions later.

References

[1] “Brands Lawyer Up Before Using Movie Characters in Ads,” Business Standard, by Maulik Vyas & Rajesh N Naidu, Mar 31, 2026