Also, along the same lines - some craft shops are selling fabric panels of Olaf/Frozen characters. Can i incorporate this panel into a wall hanging/Pillow/Cushion/Quilt and re sell it ?
So much lovely fabric, so many ideas but will it be legal ??
There are two separate aspects to what you want to do.
Assuming that the fabric is made under licence, then there should not be a copyright issue with you making products from it. Depending on what information your supplier can provide about the manufacturer, it may require bit of detective work to find the answer on the licensing issue. Additionally, if the manufacturer's name or other details are printed on the selvedge this would be another line you could follow. However if you have no luck with either of those lines of enquiry, you could try sending a small sample to the Disney Corporation and ask them if they have licensed this particular product. I suggest you do this through their UK office to start with: The Walt Disney Company Limited, 3 Queen Caroline Street, Hammersmith, London W6 9PE. If the fabric is unlicensed, then you may well be liable for secondary copyright infringement by dealing in unlicensed copies, if you try selling products using the fabric.
The main area where you are likely to encounter problems is with the various registered trade marks associated with Frozen. Since your products will inevitably create an immediate association in the minds of your customers with Disney, this will put you at risk of infringing their trade mark(s) even if the fabric is a genuine licensed product. For this reason you will probably need to get a licence from Disney to safely sell your products. Because Disney actively protect their branding, I'm sure you are right that is why there aren't similar items made from this fabric already on the market.
1. If I bought a duvet cover or similar item with licensed images on it (such as Disney or Marvel), could I use it to make (a) a dress for a small girl as a gift, or (b) a dress to sell?
2. If I was gifted an item made from a licensed fabric (in accordance with its terms and conditions) say a Frozen cot sheet, could I then, once the cot sheet was no longer needed, chop it up to include in a patchwork quilt, either for my own use or for sale?
I understand that copyright has exhaustion of rights, but I don't understand the trademark situation. Thanks.
Yes, both of those examples would be perfectly legal. As you mention the exhaustion of rights covers any copyright issues, and even if the characters depicted on the fabric were registered as trade marks, you would not infringe the trade mark by re-fashioning the fabric into something else. This is because firstly, the trade mark would not be there specifically to sell a product, and secondly the mark would be a genuine one and so there could be no confusion about the original source of the fabric, namely a company licensed by the trade mark owner.