While the easiest way to build a customer base is to sell products that feature characters they love and are familiar with, the big question that needs to be answered remains. Should you sell items with licensed characters on them?
What are licensed or trademarked characters?
Most popular characters, like Mickey Mouse and Spiderman, are the creative and intellectual property of other companies.
In order to protect their intellectual property, certain characteristics are trademarked to prevent others from profiting off of their hard work.
Any character that you have seen in a movie, tv show, and most books is most likely trademarked. Using a trademarked character in your designs or products is both unethical and illegal.
What parts of a character can be trademarked?
The overall design of a character can be trademarked, including the name, colors, and logos associated with the character.
For instance, blue and red designs with a white spider web marketed as a Spiderman item infringe on a trademark. Keep reading to learn how to make items that reference a character without infringement.
A real-life example of trademark infringement
In 2019, the Disney series The Mandolorian created waves in the crafting community. When the show initially aired, Disney had not produced any toys or plushies for the character known as Baby Yoda or Grogu, in an attempt to maintain secrecy around the show’s main plot.
However, fans of the show fell in love with the adorable character, so the crafting community rose to meet the demand. Crochet patterns for Grogu flooded the market, as did crocheted plushies of the popular character.
Crocheters and pattern designers who hopped on this trademarked trend were quickly punished by Disney.
Not only had they taken Disney’s intellectual property, but they had also cut into the profits Disney stood to make from selling the Grogu plushies they intended to release later. While some creators were simply sent cease and desist letters, some lost their shops, while others faced fines.
The simplified facts
Not only is it illegal to sell any merchandise with a licensed character on it, but doing so can be detrimental to your business.
The penalty for trademark infringement varies but can result in high fines (up to $150,000 per item) or even imprisonment. Most companies will not resort to such high penalties unless you continue to abuse their trademark after being warned.
Initially, a company will send a cease and desist letter when they notice their trademark has been infringed; however, the letter is not necessary. Depending on the company and what they perceive their loss to be, they might simply jump to a fine.
“Inspired by” products
Many creatives will attempt to bypass the trademark by using the words “inspired by *insert trademarked character here*”.
However, using the words “inspired by” does not eliminate the possibility that a company will still charge the seller with trademark infringement. If a copyrighted name is used to market a product, the trademark holder can still charge the seller with infringement.
Loopholes
Of course, with any rule, you can find a loophole.
Certain aspects of characters cannot be copyrighted in themselves. For instance, Spiderman’s colors alone are not copyrighted, but if you pair them with the trademarked name, you will have a problem.
Some sellers have success using other keywords, like “spider hero,” to sell a character’s items. However, be aware that the best policy is to avoid trying to capitalize off someone else’s trademark.
What should you do?
Maybe you have trademarked items in your shop, or maybe you want to design a pattern of a trademarked character; what are the solutions?
Trademarked listings in your shop?
If you currently have listings that pertain to trademarked characters, the best option is to take them down. Those items can be given as gifts or possibly sold at cost. Making a profit from those items constitutes trademark infringement.
Designing trademarked patterns?
Designing a pattern to make an item you plan to give away is always acceptable. Many other crocheters enjoy making trademarked characters as gifts.
Patterns of trademarked characters can be given away for free or listed on a site without advertising. If you give away a pattern for a trademarked character, the best policy is to include a clause regarding the existing trademark and the danger of selling the item.
What characters are trademarked?
With so many companies and characters in our pop culture, you might struggle to figure out which ones are trademarked and which ones are not. The simplest method is to open the internet and enter the question in the search engine: is *name of character* trademarked? The top search result will almost always give you the answer you need.
What about fair use?
The Fair Use doctrine is a United States exception to the rules of copyright.
According to Fair Use, trademarked materials can be copied if done in a limited and transformative manner.
Fair Use is generally used to make commentary on society by educators providing materials to the classroom and does not cause a profit loss to the copyright holder. See this article for more details about Fair Use.
The best policy
If you make crocheted items to sell, the best policy is to build a customer base with your own skills and creativity instead of drawing from another person’s work.
While making popular characters can be fun and fulfilling, selling them is a risk to your business’s and personal finances and reputation. Your work is valuable but not worth the risks involved.