Copyright?
 

If you were to see a Christmas decoration in the craft store; it is a miniature figure of an elf. You come home and sketch out the little elf, changing a few things, forgetting others, dress him in different coloured clothing and make an appliqué pattern from your sketch for your own use, are you infringing on the artist's copyright?

Good question. I'm not sure. However if you are going to mass produce them you might have a problem but if it's for your personal use that's another question.
Did the tag have any copyrighted logo on it?? I know Disney is very active in protecting their items. War this a local artists item or a mass produced item from say, China?

if it is for your own use, absolutely No. and again No if you changed so many things and sold them. we all see things that bring out our own ideas. have fun.

No. I don't understand why you would fret over something like this. You have to copy exactly, claim the design as your own, and start selling them to be doing something wrong.

No, go ahead for your own use.

If you read copyright law, it says if what you create is recognizable as the original or recognizable as being based on the original, it's an infringement.

An Elf is an Elf. The clothing and facial expression can't be copied but the Elf image can be.

My mantra has always been, "when in doubt, don't."
https://www.copyright.gov/title17/

Jan in VA

I wonder if it is okay just to use your creation in your own house if that is okay. I saw a table runner in a craft show and came home and adapted the design for my daughter in law. It wasn't very complicated. But it is one item -

Well, unless someone comes to your house and then reports you to whoever did the original design, I'd say you're okay. You're not selling it, you're not even showing it. And if I found out who reported it, they wouldn't get invited back.