Licensed Fabric and Character Images: Can You Sell What You Make?

The short answer

If you make something from character fabric and sell it, you are risking prosecution under section 92 of the Trade Marks Act 1994, which is a criminal offence. It does not matter that you made it by hand, that you only made three, that you bought the fabric from a legitimate UK shop, or that you sold it for £8 at a village hall.

We say "risking" rather than "definitely committing" for a reason, and we come back to it below. There is one genuine legal argument in your favour and you should know what it is, because everything else people tell you in Facebook groups is wrong.

The people telling you it is fine are usually reasoning from copyright. Their copyright reasoning is not as daft as it sounds. But copyright is not the law that catches you.

Why "I bought the fabric legally" is not the argument you think it is

The argument goes like this: the fabric was printed under licence from Disney, so the images on it are legal copies. When you buy that fabric, the rights holder has already been paid, and their control over that particular piece of cloth ends there. This is called exhaustion of rights, and it is a real principle in UK law. It is why you can sell a secondhand book without asking the publisher.

Here is the uncomfortable part: as a matter of copyright, that argument is arguable. Cutting up lawfully printed fabric and sewing it into a bag does not obviously make a new copy of the artwork; you are still handling the same lawful copy. A pure copyright claim against you, over genuinely licensed fabric, is not the slam dunk that craft group folklore suggests. (The rights holder would push back by pointing to a European case called Allposters, where transferring a poster image onto canvas created a new object and exhaustion did not apply. Whether making fabric up into a bag is the same kind of thing has never been tested.)

This is why so many people convince themselves they are in the clear. They have half a good argument, and then they stop reading.

Three things kill it.

First, most "licensed" character fabric is not licensed. A great deal of the character fabric on eBay, Temu, AliExpress and market stalls was never licensed by anyone. If the fabric itself is an unauthorised copy, everything above collapses; you are dealing in infringing copies, and copyright bites directly under the Copyright, Designs and Patents Act 1988. You usually have no reliable way of knowing which you have bought.

Second, your product photos are a separate act of copying. Even if exhaustion protected the physical bag, photographing it and posting the picture on Etsy or Instagram is a fresh reproduction of the artwork and a fresh communication of it to the public. Exhaustion does not cover that at all. In practice this is what gets listings taken down.

Third, and fatally, copyright is not the only law in the room.

Trade marks are the real problem, and they are criminal

Mickey Mouse is not just a drawing. He is a registered trade mark. So are Elsa, Peppa Pig, Spider-Man, Bluey, Hello Kitty, and the character names as words. For the big franchises these marks are usually registered across exactly the categories that matter to you: clothing, textiles, bags, toys, homeware.

Trade mark law is not about who owns the artwork. It is about whether a customer looking at your product would connect it with the brand. And that is precisely the point of a Mickey Mouse bag. Nobody buys one by accident.

Section 92 of the Trade Marks Act 1994 makes it a criminal offence to sell, offer for sale, or even have in your possession in the course of business, goods bearing a sign identical to (or likely to be mistaken for) a registered trade mark, without the owner's consent, with a view to gain. Note the possession limb: the offence is complete before anyone buys anything.

Section 92(4) sets the threshold. There is no offence unless either the goods are goods the mark is actually registered for, or the mark has a reputation in the UK and your use takes unfair advantage of it. For Disney, Marvel and Peppa Pig, both of those are comfortably satisfied. For a smaller or more obscure character, they might not be, which is why it is worth searching the trade mark register rather than assuming.

The penalties are worse than most sellers realise. In England and Wales:

• Magistrates' court: up to six months in prison and an unlimited fine. The old £5,000 cap was removed in March 2015.
• Crown Court: up to ten years in prison and an unlimited fine.

Nobody is going to prison over Peppa Pig bunting at a village hall. That is not the point. The point is that this sits in the criminal system, which is why Trading Standards are involved at all, and why they can obtain warrants, seize goods and prosecute rather than simply asking you to stop.

The one real argument in your favour: in a case called R v Johnstone, the House of Lords held that section 92 only bites where the sign is used as an indication of trade origin, and that conduct has to amount to civil trade mark infringement before it can be criminal. So there is a genuine, non-frivolous argument that an all-over decorative character print on a handmade bag is decoration rather than a badge of origin. It may well lose; rights holders argue, with some force, that character prints are exactly how this merchandise signals where it comes from. But it exists, and anyone who tells you the position is 100% settled has not read the case.

That argument is a defence you might run if you were prosecuted. It is not a business plan.

There is also a narrow statutory defence in section 92(5): that you believed on reasonable grounds that what you were doing was not an infringement. The "for personal use only" notice printed along your own fabric is strong evidence against you ever having reasonably held that belief.

What "not for commercial use" on the selvedge actually means

Most licensed fabric has wording along the selvedge: "For personal, non-commercial use only." Two common readings of this are both wrong.

Wrong reading one: "It's just a suggestion, it isn't a contract I signed." Legally, this is not a bad point. A notice printed on a product you bought off a shelf, with no mechanism for you to read and accept it, is difficult to enforce as a contract against you. Legal commentators have made exactly this argument.

Wrong reading two: "It's printed on there, therefore it's the law." It is not. It is the rights holder's statement of what they permit.

What the selvedge notice actually does is more damaging than either. It is clear, documented evidence that the rights holder does not consent. Consent is the exact thing section 92 turns on. And it demolishes any argument that you reasonably believed you were allowed. The notice does not create the offence; it removes your defence to it.

The licence Disney grants the fabric mill lets the mill print and sell fabric. It does not travel down the chain to you. That is not a technicality; it is the whole basis on which character licensing is sold.

Beliefs that will not protect you

Every one of these gets stated as fact in craft groups, and none of them works.

"It's handmade, so it's different." It is not. The law makes no distinction between a factory in Guangdong and a spare bedroom in Norwich.

"I only made a few." Scale affects the sentence, not the offence.

"I labelled it 'not official Disney merchandise'." Telling the buyer it is fake does not make it legal. If anything it proves you knew.

"I called it Disney-inspired / Disney-style / a tribute." In May 2026 Isle of Wight Trading Standards issued a public warning about exactly this wording. Using the brand name to describe your product is still using the brand name.

"The customer asked me to make it and supplied the fabric." This is the one people cling to hardest, and it is genuinely less clear-cut than the others, because you can argue you are selling a service rather than goods. We have found no UK case that decides it either way. That is not the same as it being safe. The section 92 offence covers possession of infringing goods in the course of business, and you are gaining from the work. If you take commission work on customer-supplied character fabric, understand that you are relying on an untested argument with a criminal downside, and price the risk accordingly. We are not going to tell you it is fine, because nobody honestly knows.

"Everyone on Etsy does it." Widespread infringement is evidence of patchy enforcement, not permission.

"I changed it enough." UK copyright has narrow exceptions for parody and pastiche. Trade mark law has no parody exception at all.

Peter Rabbit: a worked example

Peter Rabbit is the clearest illustration of why copyright and trade mark are different animals.

Beatrix Potter died in 1943. UK copyright in artistic works runs for the creator's life plus 70 years, so copyright in her original illustrations expired at the end of 2013. Those specific original drawings are now in the public domain in the UK. You can genuinely reproduce them.

And yet Peter Rabbit is not a free-for-all, for two reasons.

First, Frederick Warne (now part of Penguin) publicly asserts trade mark rights in the Beatrix Potter character names and illustrations, and runs an active commercial licensing programme on that basis. Trade marks last indefinitely as long as they are renewed. Copyright expiring does not touch them. Before you rely on a character being out of copyright, search the trade mark register for the character name and check which classes it is registered in. That search is free and takes two minutes, and it is the single most useful habit in this whole guide.

Second, the modern Peter Rabbit artwork, the film versions and the licensed nursery ranges are all new works with their own fresh copyright. Potter's 1902 watercolour is public domain. The 2018 film character is not. "Peter Rabbit is out of copyright" is true of a narrow set of images and useless for almost everything a maker would actually want to use.

The same two-part test applies to Mickey Mouse. The 1928 Steamboat Willie version entered the public domain in the United States in 2024, and because of a rule in UK law that borrows the term from the work's home country, the earliest Mickey is very likely out of copyright here too. It changes nothing. Every later version of Mickey is still in copyright, and Disney's trade marks are untouched by any of it. A public domain character can still be an actively enforced trade mark, and usually is.

What you can do instead

This is not a dead end. There are real options.

• Make it for yourself, or as a gift: personal use is not trading. Sew what you like for your own children.
• Use fabric from independent designers who permit commercial use: many independent fabric designers explicitly allow small makers to sell finished items, sometimes called an "angel policy". Check the designer's own terms, in writing, and keep a copy. This is the single most practical answer for most sewers.
• Use themed fabric rather than character fabric: space prints, superhero-ish colour blocks, fairytale motifs, dinosaurs, mice. The customer who wants a "space bag" is well served. The customer who specifically wants Buzz Lightyear is the one you cannot serve.
• Commission or print your own designs: print-on-demand fabric services will print your original artwork, and it becomes a genuine brand asset that nobody can copy from you.
• Sell officially licensed finished goods unaltered: if you buy genuine licensed merchandise and resell it as-is, exhaustion of rights genuinely does apply. That is a retail business rather than a craft one, but it is legal.
• Get a licence: possible in principle. In practice, character licences from major rights holders involve minimum guarantees, audited royalties and volume commitments far beyond the reach of a market stall. It is worth knowing that this is the door everyone else is expected to walk through, and it is why the licensed products in shops cost what they cost.

What actually happens if you get caught

The criminal penalties are the ceiling, not the norm. What actually happens, in rough order of likelihood:

• 1. Online listing removed: Etsy, eBay, Facebook Marketplace and Amazon Handmade all run notice-and-takedown systems that rights holders use routinely. Repeat strikes close your shop, usually without much of an appeal.
• 2. Social media account removed: rights holders report Instagram and Facebook business pages. Losing the account often means losing the customer list with it.
• 3. Cease and desist letter: the major rights holders use brand protection agencies that trawl online marketplaces continuously.
• 4. Asked to leave an event: organisers who spot infringing stock can and do ask stalls to pack up, because the organiser has their own exposure.
• 5. Trading Standards: they can obtain warrants, seize goods and prosecute.

The commercial risk almost always arrives long before the legal one. For a small maker, losing your Etsy shop and your Instagram account on the same afternoon is the realistic disaster, not a courtroom.

If you are an event organiser

You are not automatically liable for what your stallholders sell. But you are not entirely insulated either, and a Trading Standards visit to your fair is a bad day regardless of who is technically at fault.

Practical steps: say plainly in your vendor terms that stallholders must not sell goods that infringe third party intellectual property, and that the stallholder indemnifies you if they do. Ask what people are selling at application stage. If someone turns up with a table of Disney bunting, you are entitled to ask them to remove it, and you should.

Key practical points

• Buying the fabric legally does not buy you the right to sell what you make from it. The licence sits with the mill, not with you.
• The operative law is trade mark, not copyright, and it is criminal rather than merely civil.
• "For personal use only" on the selvedge is not itself the law, but it destroys the defence you would otherwise have had.
• Handmade, small scale, honest labelling and "inspired by" wording do not make it legal.
• Customer-supplied fabric and commission work are genuinely untested, which is not the same as safe.
• Your product photographs are a separate copyright issue, and exhaustion of rights does not cover them.
• Public domain characters are usually still live trade marks. Search the trade mark register before assuming otherwise; it is free.
• Independent fabric designers with explicit commercial-use terms are the realistic route to selling patterned goods legally.
• If you are unsure, ask the IPO's free information line or your local Trading Standards office before you sell, not after.