This Practice Note sets out the intellectual property and competition law issues which may arise in connection with character merchandising (ie the practice of licensing the name or likeness of a character for use in the marketing of goods or services, which will usually require the licensing of trade marks and/or copyright) in the UK. It considers issues which may arise pursuant to Chapter I of the Competition Act 1998 and also considers the continuing relevance of Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). It covers possible block exemptions or individual exemptions that might apply. It also considers the interaction between competition law and the tort of passing off.