Copyright/Trademark issues on Computer/Tablet/Phone accessories

My wife and I are starting a small business to create hand made cases for laptop/tablet/phones etc. We're curious about the legalities of buying fabric that's pre-printed with logos of lets say StarWars. What are the legal ramifications of reselling an iPad case with a fabric like the one below

Disclaimer: This is not specific legal advice - only a general discussion based off of the limited facts you have presented. Seek specific legal advice before continuing with your project.

1) The Fabric Maker's License: The only effect the fabric maker's license has on you, is that it keeps you from becoming an innocent infringer (which doesn't mean you're innocent - it just means you pay less of a penalty than a willful infringer). So, assuming the fabric maker has permission to use the marks and images, none of the other conditions of the contract apply to you - you were not a party and are not bound by the terms. The only exception to this would be if Lucas and the fabric maker agreed to make you a third-party beneficiary to the contract. For example, they agree that no client of fabric maker can be sued by Lucas for copyright or trademark infringement. Even in that case, you have no duties to Lucas or the fabric maker, but you still can enforce any benefits the contract conferred upon you.

2) Copyright Infringement: Assuming that the fabric maker had a license to make the product, the first sale doctrine would probably apply. This means that once you purchase something, you are free to do with it as you please, including re-sale. Because of this, there is most likely no copyright infringement.

3) Trademark Infringement: This is a little more difficult. Trademark infringement is usually determined by consumer confusion. Having disclaimers at the point of sale and attached to the product (like a price tag) would help eliminate any confusion for people buying the product. BUT, once the price tag is removed and the buyer uses the product in public, those people might be confused as to the creator of the product. I think you would have a good case considering they licensed the mark to be used on fabric which, by its very nature, is meant to be transformed in to some other product.

4) Other Concerns: dstarh linked to some cases where the author points out where people have won in similar situations. But understand that winning is a very subjective term. I seriously doubt that they received their attorney's fees back and, in a federal lawsuit, those can easily dwarf any earnings from a small company. Before you do this, consult with an attorney in your state to ensure that you are running your business in a way that would shield you personally from any liability should you lose a lawsuit or have a default judgment entered because you could not afford to hire an attorney to defend you. I know it sounds negative, but a little bit of planning upfront can save you big if something were to go bad.

If the fabric is actually licensed by Lucasfilm, there shouldn't be much problem. You can find out whether it is from the fabric manufacturer by requesting copies of their licensing contracts or from Lucasfilm by contacting their legal department. Yet, you should still consult an IP attorney to make sure that your derivative commercial work is legal.

However, if the fabric isn't licensed you'll be infringing on Lucasfilm's copyrights by profiting from unlicensed use of the logo & character likeness.

You should be careful, just because the fabric manufacturer has a license to produce fabric for sale at Walmart does not mean that by purchasing the fabric you acquire a license to use the fabric on a commercial product.

To be clear, you may in fact acquire such a license, I am not saying you don't. What I am suggesting is that it is better to investigate carefully before proceeding. Even if you have such a valid license, it may not be world wide and you may be contacted by lawyers from Lucas films so be prepared.

Generally licenses of this type are extremely restrictive, for example only allowing the use on fabric (and not wallpaper for example) and perhaps only in one country. This is because big companies like to enter into multiple licensing agreements with multiple partners in order to maximize revenues. So for example a film studio might license a character for use by McDonalds in a happy meal for a limited period of time and also license the same character to Mattel (a toy company) for sale as an action figure.