Thanks so much for the link, Karla :D
The paragraph you quoted is accurate. Following the strict interpretation, a designer owns the copyright to the work which includes derivative works (btw, there is no magic percentage; if I change it 33% then it is mine is a fallacy.) The rights include the right to display the work as well as allow others to display it, and reproduction rights. For money or for free isn't part of the equation.
That being said; designers in all fiber media have had a long, on-going battle with persons who maliciously upload files of their work to newsgroups for any other member of the newsgroup to download. This isn't being done by accident, I assure you, nor is it new (it goes as far back as plastic canvas.) Becoming more strict on the copyright front is the only option left for designers who want to protect their work. To make matters worse, legitimate means of enforcing copyrights were hampered by the questionable practice of one coalition. There is a history here, and maybe knowing some of it will help others understand why restrictions that are in place now are necessary. Common sense went out the window with each file that was uploaded. (To this day the word 'share' makes me ill.)
I encourage contacting designers regarding the use of their patterns for a reason: exerting control over your copyrights doesn't necessarily equal a 'no', and the only way to know for sure is to ask. There is no blanket answer, because each pattern maker is different. Some may have contracts with other entities that govern what happens with some of their work - while the person may be flattered that their design is being displayed, the big distributor they work with to get their patterns into stores may not be.
For designers, it is a bit complicated; it doesn't need to be for consumers. Just ask! Keeping a file with the answers is a good idea too :wink: