OK. Talked to my neighbor, who is a lawyer and handles some copyright cases.
This is for personal not business advice:
If I buy a pattern and make the item from a pattern I can do what I want with the made item. If the design is not licensed the designer cannot legally tell me what to do with my made item. It's my item, not my design. He said it's very simple to be legal: buy a pattern for every item I make to sell from the design. If my made item is being displayed in public, the creator of the design should always be given credit.
If the design is licensed (Disney, Coke, Sport Teams etc.) then I have to have permission to make a replica of the design and then the owner of the design has the right to tell me what I can do or not do with the item. If I buy from a retailer that has permission to sell a licensed design then I can do what I want with the made item. Example: Licensed fabric design with logos or characters.