Remember, usage of *any* licensed fabric/embroidery file/image for finished products is a DEFENSE, not a right. The intellectual property owner is within their rights to protect their registered property and their brand reputation.
What about fan art and "Inspired by" works?:
Inspired by/fan art etc: Fan art is supposed to be for personal use. The second you try to sell it, it can become a violation.
What about the % of change deal?
I admittedly don't know much about that, but I say this: "If it looks like a duck..." You are essentially making money off of someone else's creative property.
Here is a Legal Zoom article regarding transformative work (*note that not ALL of LegalZoom is perfect for your business, this just happens to have a decent explanation.):
But I purchased the licensed material from the store...
On the selvaged edge, however, it will typically state "For Personal Use Only" or "For Non-Commercial Use Only". This may mean that you can purchase the fabric to make stuff for yourself, but not to sell.
But what about "First Sale Doctrine"?
In short, the First Sale Doctrine basically states that you are free to resell unaltered items. Once you alter the item, it becomes something new and could become a violation of the IP owner's rights. To find out if it is, you must go to court for a judge-given ruling. Each lawyer and each judge will interpret it differently. Be vigilant in getting an interpretation from someone that is working for you in your specific situation.
But I can't afford a lawyer:
You don't have to afford a lawyer. There are colleges around who educate and train people to become lawyers, utilize the instructors and possibly the senior students. SBA.gov has many different volunteers available in various places around the country, utilize their services by visiting their offices or calling them. Google is also a good resource to find attorneys who may meet with you or speak with you over the phone about what they can and cannot do for you free of charge. Many attorneys offer low cost consultations for various topics.
Dana Bucy Miller of DM Law, LLCis a wonderful resource for intellectual property questions. She offers some quick phone calls as well as more in-depth consultations so you get a full sense of potential solutions for your questions.
Keep in mind: If you spent endless hours on an image just to have someone else "recreate" it and sell it, how would you feel?
Note: Embroidery files are another beast of its own. If you purchase an embroidery file that is not legally licensed, the IP owner may subpoena the vendor's records of who purchased. The same may hold true for fabric and other items, but I have not seen such a reaction yet.
Copyright: The Basics
Copyright gives owner of a creative work the right to keep others from unauthorized use of the work
Must meet ALL of these criteria to be protected:
must be original
must be fixed in a tangible medium of expression, recorded on paper, audio/visual, computer disk, clay, or canvas.
must have at least some creativity (alphabetical lists, for example are not creative)
Does NOT protect facts or ideas, ONLY the way in which they are creatively arranged
How is a Copyright created?
Who owns the ©?
Copyright encompasses several exclusive rights:
Any of these rights may be granted exclusively or in combination, with totality or limitation to another person.
How long does a copyright last?
When can copyrighted work be used without permission?
*FAIR USE IS A DEFENSE, NOT AN AFFIRMATIVE RIGHT*
Visual Artists Rights Act (VARA)
Indecent and Immoral works are not protected
Stim, Richard. Patent, Copyright & Trademark: [an Intellectual Property Desk Reference]. 12th ed. Berkeley: Nolo, 2012. 197-347. Print.
Trademark: THE BASICS
Loss of Protection
Filing with the USPTO
Top Level Domain (TLD)
.aero (air transport industry)
.asia (Asia-Pacific Region)
.biz (restricted to business)
.cat (users of Catalan language & culture)
.com (commercial enterprises)
.coop (restricted to business cooperatives)
.edu (educational industries)
.gov (restricted to government agencies)
.info (information providers
.int (restricted to organizations endorsed by treaties between nations)
.jobs (employment related sites)
.mil (restricted to military)
.mobi (devices using mobile internet)
.museum (restricted to museums & museum employees)
.name (restricted to individuals)
.net (network related entities)
.pro (restricted to licensed professionals)
.tel (internet communication services
.travel (travel industry)
Stim, Richard. Patent, Copyright & Trademark: [an Intellectual Property Desk Reference]. 12th ed. Berkeley: Nolo, 2012. 379-502. Print.
Stim, Richard. Patent, Copyright & Trademark: [an Intellectual Property Desk Reference]. 12th ed. Berkeley: Nolo, 2012. 523-568. Print.
Patents: The Basics
"Utility patents are granted to the inventor of a new, nonobvious invention." (Stim, Richard. "Introduction." Patent, Copyright & Trademark: [an Intellectual Property Desk Reference]. 12th ed. Berkeley: Nolo, 2012. 5. Print.)
a new development in at least one or more of its constituent elements
Patent Infringement Outside of US Borders:
After March 2013, America Invents Act is in full effect (Also referred to as Patent Reform Act of 2011):
Petitioning a Patent:
(US 1971; EU; PCT; Derwent)
(US & Japan 1976; PCT 1983; EU 1988)
Stim, Richard. Patent, Copyright & Trademark: [an Intellectual Property Desk Reference]. 12th ed. Berkeley: Nolo, 2012. 4-171. Print.