In the cases fought by Michael Meaders and Karen Dudnikov, the eBay power sellers known as Tabberone that were cited by dunster, the question was whether or not they could sell items made from licensed fabrics, not whether they could sell items made from a copyrighted pattern. The reselling of licensed fabrics, whether as a finished item or simply as fabric, is accepted as allowed under the “first sale doctrine”. In effect, the copyrighted item is the fabric and you are reselling your original copy of that item. That’s fine, like reselling a book.
Quilts made from patterns are a different story. If the design is original work, which I assume is what we are talking about here, then the design as well as the instructions and drawings are copyright protected. If the design is in the public domain, then only the instructions and drawings are copyright protected.
The question here was the commercial production of items made from a copyrighted design. The copyrighted item is the pattern itself, meaning the book and everything included in it (i.e., the design). You may resell the original pattern as provided under the first sale doctrine, but you may not copy it in any way. I think we have pretty much agreed with that, right?
Here’s the hard part. When you make the pattern into a quilt, you have copied the design into fabric form and that design is copyright protected. Yes, that’s the intended use and because of that fact, the pattern writer/designer has the right to decide how many of those copies you can make and whether or not you can sell them. That’s why most patterns transfer limited rights to reproduce the design for personal use or small numbers of sale quilts. The first sale doctrine does not apply to quilts made from copyrighted patterns. The useful object exception does not apply to quilts (as Tabberone insists), because it is the design that is copyrighted, not the quilt. It is also disproved by several court cases that have upheld the rights of quilt designers.
And there are cases in which designers have gone after those who infringe on their rights. When designer Judi Boisson learned her designs were being used on knock-offs made in China, she sued the chain stores responsible including Burlington Coat Factory, May Co., the Linen Source, Dayton Hudson, the QVC Home Shopping Network and the Shanghai company's New York office. She was awarded $600,000 in legal fees and damages.
References:
http://www.paulrapp.com/articles.php (he is a copyright attorney for artists)
http://www.quiltingbusiness.com/quilting-copyright.htm
http://www.kathleenbissett.com/Copyright%20Article.pdf
http://lostquilt.com/index.php/prote...ht-your-quilt/
http://www.copyright.gov/circs/circ1.pdf
http://www.allbusiness.com/marketing...1107196-1.html