We have all seen the licensed fabrics that are available for colleges, professional sports teams, Disney, Sanrio, and a multitude of other providers. I had once been told that some colleges were going to stop allowing fabrics to be made with their logos and trademarks since crafters were making items with the fabrics and selling them, but the school wasn't getting any profits from those items.
I have recently been asked to make corsets for a local store that are in Arkansas Razorback fabrics. I was concerned about the possible impacts as I have known people that have received cease and desist letters from the University.
Therefore I did a little research. The university is breaking the law by requesting such a thing, but since most people don't know that, they are sufficiently intimidated and stop making the items.
See the manufacturer of licensed fabrics holds the license to print the fabric but when you buy it in a store the license isn't transferred and the fabric is effectively sold with out a license. Legally if the school or entity didn't want things made for profit with the fabric they should not approve fabric to be created. They can not control the use of the fabric after it is sold to a consumer.
Here is the trick you need to be aware of for your listings and tagging...... The Tabberone Disclaimer.
This simple and sweet disclaimer should be listed in your Etsy, Ebay, or other listing online. It should not be at the very top or very bottom, but properly located in the middle so as to not be overlooked or scare off buyers. It should also be in at least the same font as the rest of the listing. You don't want to use super small print where it will be missed, and don't get too carried away with big bold print.
This of course would be altered as required to accommodate whatever licensed fabric you are using. Also I have elected to add a second tag to my clothing items with this same disclaimer so that it is properly displayed when my items are being sold in stores.
For more information on court cases and where this comes from go here.