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For those of you who don't want to slog through all the stuff on my website.
Precious Moments has licensed fabric, with a disclaimer I might add. They took a company, not a home crafter, a company to court. This company was buying the fabric and having it sewn up into items for sale in their store. Precious Moments lost.
The First Circuit Court specifically rejected the copyright claim where La Infantil was being accused with unauthorized use of copyrighted fabric, saying that "bedding items manufactured with lawfully acquired, authentic fabric with copyrighted design were not infringing derivative works."
The Court also said "The copyright owner's right to distribute the work is limited by the "First Sale" doctrine, which permits the owner of a legally acquired lawfully made copy of a work to sell that particular copy without the consent of the copyright holder".
That has been the only case over the use of fabric that we've been able to find. Everyone else apparently has been smart enough to to pursue it.
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