Legal Geek No. 37: Fan Art or IP Infringement?

Welcome back to Legal Geek. This week, based on a listener request from Joseph, we take a look at a question regarding selling fan art and fan made items including famous logos or characters.

https://archive.org/details/LegalGeekEp37

Joseph asked a question we see a lot during our summer gaming and comic convention series, that being whether booths that sell fan-made items like stained glass windows, leather flasks, and other items with superhero or video game logos are subject to IP infringement, and if so, how do they consistently get away with this?

Here's the deal for such sellers: it's definitely copyright and/or trademark infringement, and they run the risk of receiving a nasty Cease and Desist letter, if not a lawsuit, when they sell items using trademarked or copyrighted logos without permission. However, most of these small time hobby businesses stay below the radar because (a) it's too expensive for companies to go after every potential infringer, and (b) in many cases, the sales actually help the market for the genuine goods, not hamper it. That leads to a laissez faire attitude for many companies relative to these infringements.

Obviously some companies like Blizzard Entertainment are more "scorched earth" approach than others, going after more potential infringers. But every company has a limit as to how much they can pursue infringement issues. And that is precisely why these sellers at your local comic and gaming conventions get away with what is really blatant IP infringement.

The risk these companies run is large. Should they lose an infringement lawsuit, any of the following remedies could apply: injunction to stop the activity, handing over of any profits made, and potentially further money damages. Especially in copyright, some damages can be set by statue to some ridiculously significant value between $750 and $30,000 per infringement! If you remember the record companies going after Napster users and the ridiculous fines/settlements paid, that's statutory damages coming into play. That can make this market a small reward high risk endeavor.

Bottom line - if these companies remain what is truly a small business concern, they likely stay under the radar and probably have a low actual risk of these bad legal things happening. But they are undoubtedly committing infringement, which opens up the possibility of lawsuits. At the end of the day, it's a business decision, with associated risks and rewards like all business decisions.

Thanks again to Joseph for the question!

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