All of the below information has been taken from the
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http://wiki.answers.com/Q/Can_you_ma...bDul2ILicensed Fabric When someone releases fabric into the stream of commerce they effectively have relinquished control over the uses of that fabric.
While the pattern on the fabric may be copyrighted, the actual fabric itself is not. The pattern may include images of registered trademarks, such as the logo of the New York Yankees or a John Deere logo, etc.
Copyright law applies to the use of licensed fabric in the application of the first sale doctrine. Bear in mind, the term "licensed fabric" legally only refers to the fact the manufacturer of the fabric has a license to use the images on the fabric. It does not mean the fabric is "licensed" to the purchaser. "Licensed" products require an agreement between the owner of the product and the potential purchaser. Fabric is not "licensed"; fabric is sold.
In Precious Moments vs La Infantil, 1997, the federal court invoked the first sale doctrine in denying Precious Moments attempts to block the use of its licensed fabrics. Since then, M&M/Mars, Disney Enterprises, Major League Baseball, United media (Peanuts fabric), Sanrio (Hello Kitty fabrics), among others, have been sued when these companies tried to block the eBay sales of items hand-crafted from their licensed fabrics. Every one of them settled rather than risk losing the issue in court.
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