Licensed characters you cannot sell without a license

Character merchandise sells because people love the characters. That is also why the people who own them watch the market closely. If you import products from suppliers, you may be listing items with a cartoon character on them without knowing whether anyone had the right to put it there. This post covers why that merchandise is licensed, how to spot the difference between licensed stock and knock-offs, and what "fan art" does and doesn't change.

This is general information, not legal advice. The details vary by country, and most examples here are from the US.

Why character merchandise is licensed

A character like Mickey Mouse, Hello Kitty, Bluey or Pikachu is usually protected in more than one way. The artwork is covered by copyright. The names, logos and sometimes the character designs themselves are covered by trademark. The owners rarely make every product themselves. Instead they license the characters to manufacturers, often by product category and by region. One company may hold the license for plush toys in one territory and another for apparel somewhere else.

The licence is the permission. Without it, putting the character on a mug, a phone case or a t-shirt is unauthorised use, even if the product is well made and you paid your supplier in good faith. Rights holders such as Disney, Sanrio, the owners of Bluey and The Pokémon Company all run brand protection programmes, and this is the kind of product they look for.

Licensed stock versus knock-offs

Knock-offs often look convincing in photos, so look at the supply chain as well as the product. Signs worth checking:

• Official markings. Licensed goods commonly carry a copyright or trademark line, the licensor's name and the licensee's name on the tag, packaging or product. Some brands also use hologram stickers or hangtags.
• Price. A "Pokémon" plush at a fraction of the usual wholesale price is a warning sign.
• Vague supplier answers. Phrases like "factory surplus", "unbranded original" or "no logo, same design" usually mean there is no licence behind it.
• Off-model art. Wrong proportions, odd colours or misspelled names suggest a copy.
• Marketplace sourcing. A listing on a general wholesale marketplace is not evidence of a licence, whatever the seller says.

The reliable test is paperwork. Ask your supplier for the licence or a written authorisation that names the character, the product type and the territories you plan to sell in. Better still, buy from a distributor the rights holder lists as authorised. Documents can be forged, so for a large order it is reasonable to confirm with the rights holder directly.

Resale of genuine goods is a separate question. In the US, the first sale doctrine generally lets you resell authentic items you legitimately bought, but it does not cover counterfeits, and it does not cover everything you might do in your marketing. Other countries treat this differently, so check before building a business on it.

What "fan art" does not change

Many sellers assume that drawing the character themselves, or buying a design from an artist, makes it safe. It generally doesn't. A drawing of Bluey is still a copy of someone else's character, even if every line is original. Calling it fan art, "inspired by" or "parody" doesn't turn it into a licensed product either.

• Disclaimers. "Not affiliated with" or "no copyright infringement intended" does not grant permission.
• Selling versus sharing. Fan art posted for fun is treated very differently from fan art printed on goods you sell for profit.
• Fair use. It is a real legal doctrine in the US, but it is decided case by case and is narrow. Selling merchandise is a difficult place to rely on it. Other countries have different, often stricter, exceptions.
• Print-on-demand. If a print-on-demand service prints it, you are still the one listing and selling it, and you may still be the one who gets the complaint.
• Keywords. Using a character's name in a title, tag or description can be a problem even if the image is generic.

Some rights holders do run fan-art or creator programmes with specific terms. If one exists for a character you want to use, read the terms and follow them exactly.

What can happen if you list it anyway

When a rights holder complains, Shopify acts on it. In general terms, that can mean removing the listing, restricting the store, or closing it for repeated or serious cases. If you use Shopify Payments, funds can be held. The rights holder may also pursue you directly, and that can involve demands for money. Shopify's Legal and Help Center pages describe the current process, so read them rather than relying on a summary.

A practical routine for imported products

1. Before publishing, look at every product photo for characters, logos and recognisable designs, including small ones on packaging.
2. If a character appears, ask the supplier for licence documentation covering your product type and country.
3. If you can't get it, don't list the product. A dropped product costs less than a lost store.
4. Keep a record of what you checked and who told you what.

If you have a large catalogue, checking photos by hand gets tedious. A tool such as MarkSentry can scan product images and set flagged items to draft with a reason, which reduces the risk but doesn't remove it.

If you are unsure about a specific product or country, talk to an intellectual-property lawyer before you list it. The cost of asking is small compared with a closed store.