Olufola Wusu

Fola Wusu

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“Personal beauty is a greater recommendation than any letter of reference.” Aristotle.

On Monday the 22nd of April 2013, the Nigeria Communications Commission NCC announced the launch of the Mobile Number Portability Scheme (MNP). The scheme will give Nigerian subscribers the freedom to change from one network to another and still retain their number.

However, as a subscriber, I suspect the possibility of a Telecoms price/media war for consumers, if the latest TV advert by a certain Telecoms Company is any indication. In the said advert Mr. Hafiz Ayetoro, aka Saka a comedian/Nollywood actor and former character/brand ambassador for another Telecoms Company was seen dancing and singing the praises of his new “network”, proudly informing us “I Don Port Go…” “I Don Upgrade To…”

This paper attempts to examine the Intellectual Property ramifications of comparative advertising and the ambit of Celebrity Endorsement Contracts using the Telecoms Industry as a case study. In this regard, Intellectual Property (IP) is intangible property i.e. the value that is attached to a celebrity’s brand or personality.

History Of Using Celebrities As Endorsers
Most accounts describe “British actress” Lillie Langtry (October 13, 1853 – February 12, 1929) as being the world’s first celebrity endorser, when in 1893 her likeness appeared on packages of Pears Soap (Morin, 2002).

What Is A Celebrity Endorsement Contract?
It is a contract between a celebrity and a company in which the name and likeness of the said celebrity is used to market the brand, goods and services of the said company to its consumers. Endorsement contracts define the products and services which the Celebrity will be endorsing.

Can You Compare The Qualities Of Your Business’ Products With Those Of Competitors Without
Violating Trademark Laws?

If yes, please exercise caution in the following situations; as Derogatory or defamatory comparisons are not permitted. Deceptive comparisons are likely to constitute infringement. Comparisons that are likely to cause confusion with the competitor’s products or services are not permitted.

Understanding Celebrity Endorsement Contracts
Here is a reminder as per the essential functions of a properly drafted commercial agreement. Firstly, it forces consideration by the client and, ultimately by the other parties, of the issues involved in a particular transaction. It ought to clearly establish the obligations of the parties to each other in a way, hopefully, that will preclude future dispute and will, if a dispute does occur, enable the Courts to better determine the issues involved, as a result of the clarity of the drafting. Endorsement contracts use a lot of legal terminology, thus Celebrities should seek legal advice.

There is generally no requirement for a contract under Nigerian Law to follow a particular format or layout.

Please ensure the right parties sign the agreement, if the celebrity is acting on his behalf then he should sign himself, sometimes the celebrity is represented by a management company.

For both the celebrity and the company balance is beneficial. If the Celebrity is young and is yet to peak or his appeal is still growing, a long term endorsement contract may not be valuable unless there is a specific provision for an increase in compensation in accordance with any increase in the celebrity’s market value. Endorsement contracts can include a “renewal option” which grants the “sponsor” a “right of first refusal” to renew the contract. The basis upon which the endorsement contract may be renewed should be clearly stated in order to ensure that the Celebrity is not precluded from opting for other more lucrative sponsorship deals. On the flip side, the “renewal option” must be attractive and juicy enough to keep a valuable celebrity/character/brand ambassador; otherwise the celebrity may #Upgrade O#.

Define The Endorsed Product.
This will help you figure out the other provisions you need in your agreement and what exactly you want the celebrity to do.

Services Required
What does your client expect from the celeb¬rity? Try to describe in detail, what the celebrity will actually do to promote the brand or other products. Where the celebrity will “perform”, possible legal issues increase; such as copyright and royalties for songs. Please seek legal advice when in doubt.

How much and when, is a business negotiation that will differ from party to party. Fewer obligations on the celebrity will command a lower fee. However, both parties need to be circumspect. On the other hand every Telecoms Company needs to properly estimate the value of their “celebrity” so as to make their contract with him attractive and watertight. Do not treat a celebrity as a mere character even if he started out as just a character. Otherwise the loss of a celebrity/brand icon to a competitor might mean the migration of his/her fans /consumers to the said rival Telecoms Company. You see it’s nothing personal it’s just business. #I DON PORT O#

Use Of Celebrity’s Name/Image
Licenses protect proprietary rights in personal brands, thus a celebrity has the right to determine who can use his image and likeness to market their goods. A license allows a celebrity as an IP rights holder (the licensor) to make money from the rights to use his image and likeness or creative work by charging a user (the licensee). Do you plan to use the celebrity’s name for your promo? If it’s a yes, get express consent in your agreement.

Clearly agree on what expenses the celebrity can incur. Which expenses, if any, does the Telecoms Company intend to pay? The celebrity will typically expect first-class travel and hotels; will this extend to the assistants too? Be sure both parties understand their rights and obligations.

Do you want to bar your celebrity from leaving you and going to a competitor even after your contract with him expires? It all boils down to how well you can negotiate; it is highly unlikely that anyone will want to sign an overly restrictive contract. What about buy out clauses?

How confidential does the Telecoms Company want the rela¬tionship/compensation between them and the celebrity to be? Reduce that under¬standing into the agreement. However, remember that legally compelled disclosure could turn out to be broad.

Due Diligence
Do you want assurance that the celebrity’s arrangements with the Company do not vio-late regulations or legislation of any kind/any previous agreements with other marketers, sponsors, companies, or other third parties? If yes, do your due diligence and avoid liability.

Where the celebrity violates the exclusivity clause or someone else does? Who should have the right to take action and obtain appropriate relief? Who gets what, when the relief is obtained in form of monetary damages? Is it the Telecoms Company, or the celebrity?

Early Termination
It is possible that either party may terminate the contract prematurely; please consider the possibilities if this occur.

Many issues come up when drafting Celebrity Endorsement Contracts, the agreement between the brand and the celebrity must be just right otherwise, an oversight may result in “ugly” and unintended consequences for both parties and perhaps comical interludes for the general populace.

Olufola Wusu is a Commercial, Oil and Gas and I.P. Lawyer based in Lagos

Olufola Wusu Esq. © 2013

Olufola Wusu is noted for his “dynamic practice” and “commercial acumen”. He is praised for his
“first-rate skills” in assisting clients…