The commercialization of a princess

In this story:

• A field day for critics
• 'Ridiculous and insensitive'
• Only 6 products approved
• A matter of great delicacy
• Fund's control challenged
• 'We're not into litigation'
• 10% from Diana exhibit
• No longer an issue

By CNN Interactive Writer John Christensen

(CNN) -- In the year since the death of Princess Diana, scarcely a day has passed that at least a few of her admirers have not made the pilgrimage to Kensington Palace to honor her memory.

Londoners have grown accustomed to people taking photographs of the palace -- the princess' last home -- or leaving flowers, messages and other signs of their abiding fondness for her.

This unflagging interest in the princess has also manifested itself in a desire to take home a memento, a keepsake, a souvenir that will endure even as memories yellow and curl with age.

The willingness by her admirers to spend money on Princess Diana memorabilia is equaled -- and sometimes exceeded -- only by the eagerness of those selling it.

Even before the princess was buried, entrepreneurs were churning out her likeness on items ranging from thimbles and saucepans to Christmas decorations and computer screen-savers.

But the guardians of her legacy also moved swiftly.

Four days after her death, the Diana, Princess of Wales Memorial Fund was established as a trust to channel this swelling commercial impulse toward charities helping those "at the margins of society."

In the 11 months since, the fund has raised more than $100 million (£62 million), and distributed nearly $23 million (£14 million).

The fund -- with Diana's estate's approval -- has licensed six products. But scores of other products bearing her likeness or signature have been marketed by companies without the fund's approval, and often without contributing to it. The fund has both sued and been sued by companies over the "intellectual property" rights to Diana, and has sent warning letters to many others.

Naturally, financial transactions invoking Diana's memory have raised a few eyebrows in a country where propriety's perimeter is carefully monitored for trespassers.

The critics had a field day last spring, for example, when the princess' signature appeared on tubs of margarine manufactured by a company that also sponsored the London Marathon.

Flora, the manufacturer, announced that the princess' fund would receive some of the proceeds from the promotion, but many in the public and the media concluded that the fund would stop at nothing in its zeal for profit.

In fact, says attorney Andrew Dobson, the fund had nothing to do with Flora's decision and was powerless to do anything about it.

"The margarine was not a licensed product," says Dobson, who represents the princess' estate. "If you had a garden sale and indicated on a sign that the proceeds were going to go to the fund, it would not require us to approve it. That's fund-raising."

And fund-raising, says Dobson, is what Flora was up to in its two-week promotion, which had an announced goal of $600,000. When it was over, however, the company turned over $3.26 million (£2 million) to the fund.

While the memorial fund is responsible for fielding proposals and approving products, it is the princess' estate that permits the use of her likeness and signature as intellectual property. And it is the estate that has the final say on every product the fund approves.

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The fund has nine unpaid trustees, many of them longtime charity activists. Among the trustees is the princess' sister, Lady Sarah McCorquodale, who is also an executor of the princess' estate. The estate's other executors are Frances Shand Kydd, the mother of the princess and Lady McCorquodale, and the Rt. Rev. Hon. Richard Chartress, the bishop of London. Neither are trustees of the fund.

The estate's beneficiaries are the princess' sons, Princes William and Harry. Their guardian, at least where the princess' estate is concerned, is former prime minister John Major.

Staff members at the fund say it has received more than 2,000 proposals in the 11 months it has been in operation. More than a few, says assistant press officer Jo Greensted, have been "completely ridiculous and insensitive.

"We've had proposals for things like accident emergency kits, seat belts and colonic irrigation kits," Greensted says indignantly. "And some came literally the week after the princess died."

There was also a cable TV movie produced in Britain last spring that was immediately greeted with charges of tastelessly exploiting the princess' memory.

And a Canadian newspaper reported recently that "at least 700 licensees" had paid fees to the fund for the right to market such things as tea towels and mugs bearing the princess' likeness.

"Absolute rubbish," says Amanda Clow, one of the fund's press officers.

In fact, the trustees have approved only six products: a set of commemorative stamps from the British post office; the Princess Beanie Baby, a purple bear with a rose on its chest; a crystal candle holder; a tribute CD featuring Elton John and other musicians; scented candles; and two limited-edition enamel boxes.

The products range in price from about $1.60 for the stamps and slightly more than $8 for the Beanie Baby to about $160 for the more expensive of the two enamel boxes. John donated $32.6 million (£20 million) from sales of his remake of "Candle in the Wind," and the "Diana, Princess of Wales -- Tribute" CD has raised about $22 million (£13.6 million).

"It's a surprisingly small number," Greensted says of the six products, "but it's a very lengthy process by the fund, and by the estate and its executors."

There are, as yet, no established criteria for prospective products. Nor, says press officer Vanessa Corringham, does the fund try to find products that the princess might have used or approved of.

"We don't go there," Corringham says. "But her sister is on the fund's board and is an executor of the estate as well. She has a good idea of what is appropriate."

The fund and the estate regard "what is appropriate" as a matter of great delicacy.

Dobson says the executors of the estate are intent that it not benefit financially from the commercial activity created by the princess' death, and prefer that all proceeds go instead to charity.

"We wanted to bring taste and appropriateness to the use of her rights," says Dobson. "Those are our watchwords."

Deciding what is tasteful and appropriate can be highly subjective, of course, but the fund must also ensure that the products it approves not only meet that standard but are commercially appealing as well.

Dobson says the reaction to the princess' signature on tubs of margarine indicates that "there was a limit to how far anyone could commercialize her name. We don't want profiteering without charity. Even charity has its boundaries beyond which one cannot traverse."

Nevertheless, he says he cannot imagine the estate overruling the fund on a product. "We're a like-minded group when it comes to taste and appropriateness. It even makes good commercial sense.

"I hate to use the word 'brand' because it sounds horrible," Dobson says, "but (Princess Diana's) intellectual property rights are better used at a rarefied level. And the more appropriate it is, the better it will sell."

Policing the unlicensed use of the princess' image and signature has presented the fund with some difficulties.

Corringham says it has issued "a great many" cease-and-desist letters to companies trying to capitalize on the princess' popularity, and it encourages those companies that have received licenses to help police those that have not.

She says the offenders are "predominantly" in the United States, a claim Dobson seconds. "There's a market for collectibles in the U.S. that doesn't exist here," he says.

In May, the fund sued the Franklin Mint, a Philadelphia-area company that has marketed two Diana dolls and several other items without approval from the fund. (See box)

And in early August, the fund itself was sued by Bradford Exchange Ltd., an Illinois company that claims the fund does not have the right to control Princess Diana's "name, likeness, image or other attribute."

Bradford, which makes plates, dolls and music boxes, says it has paid the fund more than $2.4 million (£1.5 million) from sales of commemorative Diana items produced as a result of earlier agreements. It also says a new agreement has been worked out but not signed.

A Reuters report quotes an attorney for the fund as saying it has delayed signing the agreement pending the outcome of its litigation with the Franklin Mint.

Policing the princess' likeness is rendered even more difficult by a long-standing tradition. As Corringham points out, "The princess was hugely loved, and there was a proliferation of things even before her death."

It is a tradition in Britain for monarchs and other royalty to appear on cups, plates, glasses and other memorabilia, and Corringham says the fund has no intention of going after the many small merchants and street vendors who sell them.

"It's a game of balance," says Dobson. "We're not into litigation. We walk a bit of a tightrope. Diana was the people's princess, and we have to be very careful that we're not overly vigilant."

Diana's brother, Charles, the Earl of Spencer, has been the subject of more than a little scrutiny over his decision to turn part of the family estate into an exhibit featuring his sister.

Although a registered historic site and the princess' home when she was growing up, Althorp House (pronounced "Al-THRUP" in Britain) was only a minor attraction in a country rich in history and historical sites until the exhibit opened.

However The Evening Standard, a London newspaper, quoted an expert as saying that Diana's popularity means that Spencer "is onto a financial bonanza."

The exhibit is open only in July and August and in this, its first year, quickly sold out all 152,000 tickets -- 2,500 a day -- at $15.50 (£9.50) for adults, $11.40 (£7) for senior citizens and $8.15 (£5) for children.

Spencer was criticized for saying he would contribute some of the proceeds to the memorial fund but for not saying how much. But Shelley-Anne Claircourk, speaking for Spencer, says Spencer has "officially stated" that he would donate 10 percent of the profits to the fund.

Claircourk couldn't say how much that would be, because a final accounting probably won't be available until early next year. She also said that profits would be lower this year because of the "huge capital investment" in setting up the exhibit. But she made clear that the 10 percent would include not only ticket sales, but proceeds from a cafe and shop as well.

Claircourk says there are just a few souvenirs sold in a gift shop at the exhibit, and none use Diana's likeness or signature.

They include a "Tiffany-like" key ring with a silver heart and an "A" for Althorp, and a platinum-and-blue mug bearing words from Spencer's eulogy at Diana's funeral. The key ring, the most popular item, sells for about $4.80 (£3); the mug about $19.50 (£12).

"Everybody's been very pleased with the way thing have gone, the media and the public," Claircourk says.

The relationship between Spencer and the fund appears to be cordial. Corringham says the fund recently issued a mission statement that Spencer endorsed, and earlier this summer he donated to the fund the proceeds from a tribute concert held on the grounds at Althorp House. The concert featured Chris de Burgh, Lesley Garrett, Jimmy Ruffin, Duran Duran, Sir Cliff Richard and the BBC Concert Orchestra.

After initial misgivings about sullying the princess' reputation, concerns seem to have subsided and the public has settled back to watch her legacy unfold.

"The last couple of months it's been quiet," says Luke Harding, a reporter at The Guardian, another London newspaper. "Things have moved on from the commercialization issue."

There is still plenty of Diana merchandise being sold, Harding says, but "the trust is keeping its head down and pushing the odd press release. They've played their cards very carefully."