The Legal Nature of Endorsement Cooperation
The use of a person's name or image in advertising is regulated by the Georgian Law on Advertising. Article 3 defines advertising as information disseminated by any means and in any form about goods, services and works, about natural persons and legal entities, about ideas and initiatives, aimed at an indefinite circle of persons and serving the formation and maintenance of interest, as well as the promotion of sales. The endorsement of a product by an athlete, artist or public figure thus falls squarely within the definition of advertising, and the relationship is governed by the requirements of the law.
The law also distinguishes the subjects of advertising: the customer of advertising is the source of the information for its subsequent production, placement and dissemination; the producer gives the advertising information its finished form; the distributor places and disseminates it using property, including broadcasting and communication channels; and the consumer is the person for whose attention the information is disseminated. When concluding an endorsement contract, it is important to establish who occupies each role, because the allocation of responsibility follows precisely from that.
Categories of Inappropriate Advertising
Planning endorsement cooperation requires knowledge of the categories of inappropriate advertising. Unfair advertising contains incorrect comparisons, expressions harming the name, dignity and reputation of a competitor or third person, and discredits persons who do not use the advertised goods; unreliable advertising contains data inconsistent with reality — about the properties of the goods, the price, guarantees or awards; unethical advertising violates moral norms and profanes state symbols; misleading advertising deliberately leads the consumer into error. The law separately defines comparative advertising, which directly or indirectly points to a competitor.
Special attention is given to alcohol advertising: advertising of strong spirits is advertising of an alcoholic beverage in which the alcohol content exceeds 14 percent. Endorsement cooperation touches these categories directly: the reputation of the person and the lawfulness of the contract are often put at risk precisely at these boundaries, so the product and the form of the campaign must be checked before signing.
General Requirements and the Rights of the Person
Article 4 regulates the general requirements towards advertising. Advertising must be understandable at the moment of its presentation without special knowledge or technical means. Throughout the territory of Georgia advertising is disseminated in the state language, and an inscription in a foreign language must not exceed in size and quantity the form executed in the state language. Advertising is prohibited for goods whose production and sale are prohibited or require a special permit that has not been obtained; the advertising of certified goods must be accompanied by the mark certified; and the price must, as a rule, be expressed only in lari.
The most significant norm for the person is the following: it is prohibited to use the image or name of a natural person in advertising without that person's permission. An endorsement contract is precisely the legal basis that records this permission — its scope, duration, forms of use and remuneration. In addition, advertising must not incite citizens to violence, and objects of intellectual property may be used only in the manner provided by the legislation.
The Institution of Sponsorship
Sponsorship underlies many endorsement relationships. Under Article 13, sponsorship is the contribution of natural and legal persons to the activities of other persons — in the form of money, property, results of intellectual activity, provision of services, services rendered and performance of work — on the condition of disseminating advertising of the sponsor's goods. A sponsorship contribution is regarded as the value of advertising, the sponsor as the customer of advertising, and the sponsored party as its distributor.
At the same time, the sponsor has no right to interfere in the activities of the producer and the distributor of the advertising. The right to sponsor is denied to a person whose product or activity may not be disseminated under this law; moreover, direct or indirect sponsorship by manufacturers, importers and sellers of tobacco products, tobacco accessories or devices intended for tobacco consumption is prohibited. In sports and cultural partnerships these restrictions must be calculated in advance.
Frequently Asked Questions
May a person's name be used in advertising without permission?
No — using the image or name of a natural person in advertising without permission is prohibited; that is why the conditions of use are fixed by contract.
How is alcohol advertising restricted?
The law defines the advertising of alcoholic beverages, and strong spirits are those whose alcohol content exceeds 14 percent.
What is the legal nature of sponsorship?
A contribution to another person's activity on the condition of disseminating advertising of the sponsor's goods; the contribution is treated as the value of advertising, and the sponsor as the advertising customer.
Who answers for a violation?
The customer for the content, the producer for design, production and preparation, and the distributor for the time, place and means of dissemination.
May a sponsor interfere in the advertising process?
No — the sponsor may not interfere in the activities of the producer and the distributor, so the boundaries of influence should be defined in the contract.
How We Help on Legal.ge
The lawyers of Legal.ge shape endorsement contracts from the standpoint of all parties: we draft the conditions for the use of image and name, balance the sponsorship relationship, check the compliance of the advertising with the requirements of the law and protect interests when a dispute arises. Contact us on Legal.ge — we will help make your advertising partnership lawful and commercially sound.