Estate Must Control Unauthorized Merchandise

On the merchant lined street in downtown Los Angeles called Santee Alley, vendors hawk Michael Jackson t-shirts. Two styles memorialize his passing, but one has the date of his death incorrect. The other has no tag on the collar.

The store manager, Martin Melendes, is suspicious of a reporter's questions about the $15 shirts. "You're not with the FBI?" he asks. "We sold 2,000 T-shirts in the first week. We're still selling alot."

Since Michael's death in June, people around the world have been in mourning. Still others saw a way to make some fast cash. As his estate lawyers prepare to battle to secure Michael's fortune, they are turning their attention to the vultures flooding stores and streetcorners with unauthorized memorabilia.

This is not just about a few T-shirts. This involves tens of millions of dollars in annual merchandising royalties, as estimated by Mark Roesler. Roesler is chief executive of CMG Worldwide. The business handles the licensing and collects revenue for the estates of celebrities like Marilyn Monroe and James Dean.

The estate of Elvis Presley brought in almost $55 million dollars in revenue last year, 32 years after his passing. That included $14 million from retail sales. DVD and TV project royalties, money from tours, exhibits, hotel rooms and events at the Graceland museum made up the rest. Marilyn Monroe and James Dean's estate each took in $5 million.

And Michael Jackson may prove to be more popular than all of them.

AEG and the estate are selling T-shirts, mugs and other materials online through Universal Music Group's retailing arm, Bravado. Last week, the estate made a deal with Harmony Books, a Random House division, to re-release Michael's 1988 biography, "Moonwalk." There are plans for a movie based on concert rehersal footage.

Sony has bid $50 to distribute that worldwide. And there is a television special based on his music and dance also in the works. There is even a special section of MJ merchandise on QVC, the TV and online retailer, that said it spent time vetting the legitimacy of each item.

Unfortunately, Michael's popularity is also providing opportunities for others to make big bucks, as well..

"In the piracy and anti-counterfeiting world, this is as big as it gets," Roesler said. "It's a daunting task for the rights holders to get on top of this."

Amazon has dozens of vendors selling shirts, fedoras, watches and buttons. Amazon removes merchandise it finds is illegal, but does not screen items before they go up. Five sellers with no links to the Jackson family have attempted to trademark the phrase "King of Pop" on items like drink umbrellas to juggling balls since Michael's passing.

Others, like the street venders, are more brazen. They openly flout laws meant to ensure that Michael's estate receives it's due before the law steps in and they get cut off.

Michael's estate lawyers, John Branca and John McClain, told the Associated Press in a statement that the estate will be taking legal action to prevent the sale of unauthorized items.

"The sale of unauthorized Michael Jackson merchandise is illegal and provides nothing for the beneficiaries of his estate, namely his mother, his children and charitable causes that were important to him," they said.

The concern is not just limited to MJ memorabilia. 9.5 million of Michael's songs, everything from "Thriller" to "Rock With You" were freely swapped using a file - sharing software in the week that ended July 16. This is according from tracking firm BigChampagne Media Measurement. That alone translates to $24 million in lost revenue, based on what the swappers would have paid if they had purchased the songs from iTunes.

Legitimate sales of Michael's music is still doing very well, with about 3 million albums being sold in the United States since his passing, according to Nielsen SoundScan.

According to experts, it will take a very sophisticated legal and business team to succeed at securing Michael's estate rights. Police in Los Angeles say they can't take action against suspect retailers or manufacturers unless a trademark owner appears in court to claim that the other merchandise are fake.

A New Jersey based retailer, Girlytops.com, that also sells items featuring Britney Spears and others, has sold thousands of MJ T-shirts online. Owner Pete Ray claimed that the company purchased the designs from "licensed retailers," but couldn't clarify which ones.

"There's been an amazing response by his fans to his death," Ray said by phone. "It's just countless. I haven't really sat down. We've been just too busy sending them out. As fast as they come in, they go out."

To further complicate matters, the phrase "King of Pop" was never actually registered to Michael, according to the U.S. Patent and Trademark Office, that currently has some of his applications on display in a free exhibit in Washington, D.C.

Michael registered "Michael Jackson" as a trademark, the office said, but only on sound recordings, videotapes and movies involving music and entertainment. Michael also owned the patent on the shoe device that allowed the wearer to lean past his center of gravity, as in "Smooth Criminal," but it expired in 2005 because he didn't pay the $2,480 maintenance fee.

Sharon Marsh, the USPTO deputy commissioner for trademark policy, said that this does not mean that there is a free-for-all on certain products using Michael's name and likeness. Common law can establish ownership of trademarks if they have been used before in commercial ventures.

An applicant can be denied if his or her trademark application creates a false association with a person or an institution, she said.

The fastest way for the estate to end the unlicensed selling is to seek a judge's temporary restraining order. This can take less than a week and requires little proof, said Alan Drewsen, the executive director of the International Trademark Association.

The difficulty arises in tracking down all of the manufacturers that jump into business and then bail out when legal questions come up, he said.

"It's going to be very difficult for the estate to shut down every source of T-shirts," Drewsen said.

A New Jersey based maker of pary goods, TUTM Entertainment, said that it has applied for the trademark "King Of Pop" on everything from cover artist CD's to buffet decorations.

"The market's already flooded with tons of T-shirts and stuff," said TUTM's chief operating officer, Dianne Aronica. "We felt the smartest way to do it was obtain a trademark and do focused items that made sense. We typically like to do it right."

If history repeats itself, Michael's earning power will continue for many years. His estate still has the time to overcome the mountains of knockoffs.

"Elvis Presley's merchandise still sells extremely well," said Charles Riotto, president of the International Licensing Industry Merchandisers' Association. "Whether this would hold true for Michael Jackson, I don't know. There'll have to be a well-organized and cohesive licensing program to achieve that sales result."

Source: MJFC / ChicagoTribune