The recent finding by Uttar Pradesh FSDA of excessive chemicals in Maggi instant noodles, has brought in focus the consequential impact to ‘celebrity endorsement agreements’.

Consequent to the ban imposed on the sale of Maggi, courts in Bihar and UP ordered the registration of FIRs against Maggi brand ambassadors Amitabh Bachchan, Madhuri Dixit and Preity Zinta. The cases have been filed under sections 270 (malignant act likely to spread infection of disease dangerous to life), 273 (sale of noxious food or drink), 276 (sale of drug as a different drug or preparation) and 420 (cheating and dishonesty) of the IPC.

This caused a media frenzy for a few days, but in the aftermath of the hype; corporate houses as well as celebrities are reassessing their ‘standard’ celebrity endorsement agreements especially since ‘product liability related issues’ seldom featured in such formats.

Traditionally celebrity endorsement agreements have been ‘templatized’ by corporate houses / celebrity management agencies, focusing on the commercial aspects, deliverables by the celebrity and the permission to use the ‘image & likeness’ of the celebrity over a territorial domain. In the case of celebrity endorsement by film actors, cricketers, etc. the parties tend to focus primarily on the commercial and operational aspects such as number of committed dates for filming/production, travel & accommodation, public appearance clauses and of course the endorsement fee payable.

Very seldom do the parties discuss or negotiate on the contingent aspects including ‘product liability’, immoral conduct, tarnishment of image, etc.

We all remember the case of Tiger Woods who a few years ago lost most of his multimillion endorsements after the controversy of his extra-marital relations were made public. At that time, Tiger Woods was sponsored by many corporate houses and also the No.1 golfer in the world. While no sponsor will riskbeing associated with a tarnished brand ambassador, the ‘Maggi case’ now raises a similar concern for the celebrities itself.

The source of all celebrity endorsements agreements lies in the recognition of the legal concept of right of publicity. The right of publicity has its origins from a variety of sources including common-law, intellectual property rights and the law of contracts. While the present day understanding of the ‘right of publicity or personality rights’ evolved greatly in the United States, there have been innumerable instances of cases of wrongful association, misrepresentation, etc. that have been reported in India as well.

It is now a well-established norm to state that ‘right of publicity’ vested in any celebrated individual has his ‘personal privacy’ as well as ‘proprietary rights’ included within his/her ‘personality rights’. However,due to the absence of specific legislation recognizing the proprietary rights, there canbe issues of succession as well as consequential ‘tarnishment’ of ‘personality rights’ by third persons.

The Maggi Case now opens a whole new aspect previously untouched in India as well in many other foreign jurisdictions. What makes the recent developments unique in the Maggi Case is the fact that celebrities had consented to endorse the product willingly and had also received consideration in return for their consent. Therefore, the question that arises is whether the consent for the usage of the ‘right of publicity’, would cause the celebrities to be liable as well or not?

Since the news of the banning of Maggi Noodles broke out, several viewpoints have been presented to suggest that there is a valid case against the celebrities who endorse such product food products since the legislative provisions under Indian Penal Code, the Food Safety and Standards Act and the Consumer Protection Act; have specific provisions that prosecute ‘mis-branding’, ‘misselling’ and ‘misrepresentation’. Also there isthe question of tortious liability of celebrities as the consumers relate to the celebrity endorsing a product before purchasing the same.

In my view, it has to be realized that publicity rights are a blend of moral/personal matters as well as property rights. Neither one can be applied in the absence of the other. Since the number of celebrity contracts and matters are not significant, it may be a long while before a specific statutory enactment is in place in India that identifies the rights and liabilities of famous personalities. Therefore in the current regime, for all ‘celebrity contracts’ there is a need to clearly demarcate & identify the ‘service aspect’ as well as the licensing of the ‘proprietary rights’ separately. This demarcation should help in limiting the potential liability of the celebrity

While it is apparent that the commercial terms of ‘celebrity contracts’ take the forefront in most negotiations, parties often overlook the type of product, the laws that regulate the particular product and the conditions applicable to the licensing of the ‘proprietary/publicity rights’.

In the aftermath of the ‘maggi case’, there is an increased realization of stepping away from standard ‘service oriented’ formats. The recent contracts are now looking to provide conditional endorsements akin to licensing of ‘publicity rights’ by mandating requirements of product fitness/quality, comprehensive indemnity for product liability issues, allowing severance of relations in the event of tarnishment of image. This can help in establishing the fact that the ‘celebrity’ is only a medium of advertising/marketing and not an agent or associate of the manufacturer.

We also cannot overlook the fact that unscrupulous efforts will still be made by persons to file cases against celebrities to garner ‘publicity’ and attention and this would definitely and regretfully sidetrack the main issue at hand. Despite the above, versions of ‘celebrity endorsement agreements’ will continue to evolve in the coming years in India and we are also likely to see many more cases in court that will deal with the ‘right of publicity’ and the extent of celebrity liability in endorsing various products & services