I've read the replies to this question, but wonder if anyone has reviewed the first sale doctrine information?
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It seems you are interested in Disney related fabrics so I can state a few things that I know have happened with selling handmade items made with fabric imprinted with Disney characters.
You will constantly find items for sale on eBay made from this type of fabric and most of the time the sales are ignored.
But - if a complaint is filed by a representative of Disney (and it does happen) eBay will remove those listings from their site. This does not mean it is illegal, it only means the company has complained and that seller's related items will be removed and cannot be relisted.
This is true of any company's products that are sold on eBay. The parent company can notify eBay of a particular seller and listings will be removed - this happens frequently with expensive designer handbags/purses.
These sellers cannot afford to fight big companies and eBay will not get in the middle.
But - most of the Disney listings stay posted as most of the total sales are minor and of no concern to Disney.
Whether it is legal or not will probably always be argued but small sales may not be a problem.
Something similar happened with items that were "gifts - promotional and cannot be sold" but it was ruled that it was legal to sell those products. This was mainly done with records being sent to radio stations but there were other items also.
Not sure exactly what you are wanting to do so this is the best that I can offer.
I'm not a lawyer but that article does suggest that it is not illegal to resell items like that. First sale doctrine would be between the manufacturer and the fabric store, so that should not apply to you as the second (or more) sale. However, I have heard stories about companies like Disney being very lawsuit happy. You don't want to have to deal with hiring an attorney, even if you will probably win in the end. Looking at other legal sites, there seems to be more concern about trademark infringement rather than copyright, which has different criteria.
I would add the disclaimer to your marketing materials as it suggests at the end of the article. That should be enough protection unless, as Judy says, you are selling Disney stuff in the parking lot of Disneyland.
"In spite of the legal restrictions presented by the first sale doctrine, some copyright holders nevertheless try to enforce their copyright protection against individuals who make and sell items from copyrighted fabric. You may be able to reduce the risk of a rights owner attempting to enforce its rights against you by using a disclaimer when you sell your products. Whether you sell online, at a craft bazaars or in a retail store, it can't hurt to include a disclaimer on your website, at your booth or on your packaging that clearly states that your products are not associated or affiliated with the original copyright owner."
The reason that I keep referring to eBay sales is because eBay has many attorneys who constantly research what is legal and what is illegal to sell and since they allow these sales (by the thousands) I can only think that it is legal to sell items made of this type of fabric as eBay has outlawed items in the past that were deemed illegal to sell.
As an example; police badges have very strict restrictions for resale (over 75 years old and more) and any type of federal badge is illegal to sell and there are many more items that have many restrictions.
The only restrictions (eBay) that I have found is dealing with duplicating an existing item that any company makes - eBay will remove it as soon as they become aware of the listing and will many times ban a seller from eBay - forever.
The first seller (fabric maker or any item) has to have permission but the purchaser has the right to resell - just take a look at all the big name toys that are bought and resold everyday.
It is technically illegal. The chances you will be prosecuted are not that great. However, if you are standing outside Disneyworld selling dresses made with Disney fabric, you will probably get caught.
Best to invest in a consultation with a lawyer or free legal aide vs crowd sourcing info. Lay people can read it incorrectly. Licensers, esp sports get fussed up fast if you use fabric with their team and are making a profit.
One more thought on this, this is from Legal Zoom, which is a nice service, but in my mind (having live and in person lawyers in my extended family), I would talk to an in person lawyer, not use an online service or article to make your decision.
Disney is one animal, as is Warner Brothers, as are sports teams. They all have varying budgets to prosecute infringements and they go through phases of trying to "clean house" and put their thumbs down on the little folks who are trying to make a buck from their name.
I know from a project I wanted to do years ago with a lot of Pittsburgh Penguins fabric that my now late father in law, who was a lawyer and a judge, said to me -- don't risk it. Yes, you see it all the time, but, you see people running red lights all the time and not getting caught. Your luck (meaning me), you would cause an accident, hurt someone, and lose your drivers license. Best just to stop. That project never got made.
If you are making these items and selling them in craft fairs in low traffic areas, you are probably OK. I would definitely avoid listing such items on ebay or amazon or the internet in general, however, because you never know what may happen. Especially a company like Disney with its many lawyers
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