I periodically see questions about how to tell if a seller has a license to use a trademark or intellectual property of popular tv shows, movies, toys, cartoon characters, sports teams, college logos, etc. Buyers find designs on Etsy that state that a popular character design is for personal use only or can be used for items they sell. The seller might provide a “license” to the buyer, authorizing the buyer to make things with the design. But is that license legit? How do I (and the general public) know if the seller has an actual license to sell these items or these designs?
Can the seller give you a license to use these designs?
First, only the copyright owner or trademark owner can authorize a license to use their design or trademark. No one else can do this. If you find a Disney design, there are only a couple of places that Disney has authorized to sell Disney designs. And those places can’t authorize you to make items to sell from those designs. Thus, that Etsy or small website owner can’t give you a license (especially when it is highly unlikely that they actually have a license).
Next, many designs and character and show names are also trademarked. Nike, Marvel, and similar brand names are trademarked. Even Mickey’s ears are trademarked. Some items are both copyrighted and trademarked.
What is the difference between a copyright and a trademark?
Both are intellectual property and are owned by their creators (or if it is work for hire, by the company that employed the creator). Copyrights protect artistic works, like literature, art, and computer programs. Copyrights expire 70 years after the death of the owner OR up to 120 years after the work’s creation if the author is unknown. A copyright means that the creator is the only one that has the “right” to “copy” their work.
Trademarks are names, brand colors, tag lines, and other identifying information that an organization has registered with the trademark office as identifying the organization’s brand. Trademarks last as long as the organization keeps paying to renew its trademarks. Trademarks are “marks” used in “trade” or commerce.
How to tell if a craft license is legit.
Some universities and colleges do sell “craft licenses,” BUT they will not do so for items that they already sell. These licenses are for physical products only and not for digital products. So that shirt, tumbler, jewelry, or pen with a college logo or mascot is an automatic no. Colleges require that the crafter send in photos of each item for approval. The university doesn’t approve craft licenses for items that they already sell. And they don’t approve embroidery design files, as that would allow anyone to make counterfeit items. There is one license per product. That means if you see 10 products with different designs, then the seller should have 10 craft licenses. If you see collegiate stuff for sale, it will have a holographic sticker/tag attached tp each item. The university only authorizes a small number of craft items before a new license has to be purchased. The seller will have a licensing letter that they can display. If the item doesn’t have the official holographic tag, then those items aren’t legally licensed. Additionally, the seller’s business name will be on the colleges approved vendor list posted on their website, which anyone can easily look up.
If you are selling Nike or Disney stuff, then I would expect you to have a retail store and a very large corporation, as they don’t do small craft licenses. They do licenses with companies like Brother or Hasbro. Unless you are a secret multi-millionaire, you can’t afford those licenses.
If you are selling tv show items, movie related stuff, cartoon characters products, etc., then they also only do big dollar deals. They aren’t going to dilute their earnings/sales for their own big dollar licensing deals by letting someone with a $75 craft booth sell similar items. For example, if you are selling a shirt with a Marvel character on it, then I know it isn’t licensed for commercial sales, as Disney only sells designs (through Brother’s website, ibroidery.com) for “personal use.” And selling at a craft fair isn’t “personal use.” Disney doesn’t give Etsy sellers or other small businesses a license to sell their designs. They have a license with Brother corporation to sell designs (or embroidery machines with pre-installed designs) to the public for personal use.
There are steep penalties for infringement.
And all it takes is one disgruntled customer or a competing business to turn you in for the trademark owner to come after you. Trademarks **must** be enforced once the owner knows of infringement. This is because the trademark owner can lose the trademark (and all the years of advertising costs, etc. to promote their brand) if they don’t enforce and police their trademarks. As an example, the word “escalator” was originally trademarked. The company lost the trademark when the word came into general use, and now any company can make an “escalator” instead of making “moving stairs.” Kleenex is at risk for losing their trademark, as the word has become a general term for “facial tissue.” When writing anything about a Kleenex brand facial tissue, you have to be very exact with the term “KIeenex.” They have a web page devoted to how to use their trademarked name.
In fact, most companies have a webpage devoted to how to use their trademarks. So, it is pretty easy to look up to see if the crafter is using the trademark is the correct way. And companies list their legal licensing partners, so that is also available to look up.
The Lanham Act (in the USA) and the Trademark Counterfeiting Act are federal laws that spell out how trademark owners can protect their marks. It is a crime to make counterfeit goods. And putting someone else’s trademark onto your own craft items to sell means that the seller is a counterfeiter. When the company does come after the seller, the Lanham Act and Trademark Counterfeiting Act have both criminal (jail time and fees) and civil (monetary damages) penalties for trademark infringement. It also means that law enforcement (once charges are filed) will seize all money and machines and items that were involved with the counterfeit goods.
Want to learn more?
Read about the Lanham Act and the Trademark Counterfeiting Act at these links:
Lanham Act Protections for Trademarks and Advertising
Trademark Counterfeit Laws and Enforcement Explained
The reality is that businesses that are following the rules should avoid trademark infringement at all costs. If the trademark owner wants to be nice, they will only send a cease and desist letter with an offer for a small ($2,000 or $5,000, for example) payment to cover their legal fees thus far. The trademark owners of large corporations have attorneys on staff that only go after offenders. It costs the company the same amount if they go after 10 trademark infringers or 1,000. Plus, as an example, if 1000 people each year pay $2,000 in penalties (instead of getting sued for big bucks and paying an attorney lots of money to defend them, which is their alternative), then it makes the company 2 million dollars (1000 people x $2000 = $2,000,000). The company can use that money to pay for their own attorneys and paralegals while protecting their trademark.
When someone asks why would a large company go after a little crafter, this is what I tell them: Going after infringers can pay for itself, the company has to go after trademark infringers or risk losing their trademark, and all those small crafter sales dilute the company’s earnings (which they paid big bucks in advertising and product development costs to get). That is why big companies go after small crafters who have trademark infringing products for sale.
And that is how I know the little crafter in the small, local craft show doesn’t have a legal license to sell Marvel artwork, Disney stuff, Nike branded items, etc., because 1) they don’t have the license on display, 2) they don’t have the proper tags on the items, 3) big corporations don’t sell licenses to small crafters, 4) your business name isn’t on the organization’s website of legally licensed companies, and 5) you aren’t a multi-millionaire that can afford to buy a license for major brand names.