IP Licensing Red Lines in Custom Toys: What You Can and Can't Manufacture

Why we write this down

We turn down work over IP every month. Not because we enjoy it, but because a seized container is a total loss that no quotation, no insurance and no apology recovers. The buyer pays for the goods, pays for the destruction, loses the season, and can be named in a damages claim by the rights holder. The factory that produced them has been paid and has moved on.

That asymmetry is the whole story. When a supplier asks no questions about rights, they are not being flexible — they are externalising the risk to you. So we ask questions, and we ask them before sampling, not after tooling.

Three different rights, three different owners

Buyers usually say "copyright" when they mean all three. They are separate rights with separate owners, and a toy can infringe one, two or all of them at once.

Right	What it protects	How long	The trap for toy buyers
Copyright the artwork / character design	The original expression: the drawing, the sculpt, the specific look of a character.	Decades. Effectively the life of the studio's commercial interest.	"We only used the silhouette" is not a defence. Infringement is judged on overall impression, not on a checklist of features.
Trademark names, logos, brand marks	Words, logos and symbols that identify the source of goods — including character names used as brands.	Indefinitely, as long as it is used and defended.	This is the one that survives public domain. Copyright can expire; the brand does not.
Design right / patent registered appearance & mechanism	The registered ornamental design of a product, or a functional mechanism.	Typically 15–25 years depending on jurisdiction and type.	A generic-looking shape can still be a registered design. "It is just a bear" is not a legal analysis.

Public domain is narrower than the internet thinks

You will read that early cartoon works entered the public domain and conclude the character is free to manufacture. Two things break that conclusion.

First, only the specific work enters the public domain — usually an early short or the original publication, not every later version of that character. The modern redesign, with its current proportions, colours and costume, is its own copyrighted work and is typically still protected.

Second, trademark does not expire with copyright. Using the character's name as a product name, using the studio's logo, or trading on the brand's goodwill is a trademark problem, and trademark protection lasts as long as the owner keeps using and defending it. That is why you see carefully worded horror-story projects that use the 1928 drawing but cannot use the name, the logo or the current look.

If you genuinely want to build on public domain material, we will do it — but we will ask you for a written legal opinion or we will strip the design down to the elements that are unambiguously free, and we will not put a protected name on the packaging.

Who is allowed to order what

Three very different parties come to us, and they get very different answers. Confusing them is where most bad decisions start.

• The rights holder (or their licensee with manufacturing rights). They can produce. We ask for the licence agreement naming the properties, territory, channels and term.
• A distributor or retailer who bought licensed goods before. Buying licensed products does not grant the right to manufacture them. A purchase order is not a licence. This is the most common misunderstanding we see, and it is expensive.
• Someone who wants a "generic version" of a popular character. There is no such thing. The design is the protected asset. We will happily design an original character in the same genre — same mood, same audience, none of the protectable elements.

What a licence actually costs

Buyers sometimes assume licensing is unaffordable and quietly skip it. It is not cheap, but it is knowable, and it is almost always cheaper than a seizure. Typical structures we see in the toy and collectibles space:

• Royalty on wholesale or retail price, commonly quoted in the single-to-low-double-digit percentage range depending on the strength of the property and the category.
• Minimum guarantee — an advance against royalties that is payable whether or not you sell through.
• Approval rights — the licensor reviews and must approve the sculpt, the sample and often the packaging. Build this into your timeline; it adds weeks.
• Channel and territory limits — a licence for one country or one platform does not cover another.

We are not licensing agents and we do not negotiate on your behalf. But we will tell you honestly whether your plan needs one, and we work cleanly with licensors' approval workflows once you have the agreement.

The fast, safe path: make your own

If you do not have a licence and cannot get one, you still have a better option than a copy: an original character built for manufacturing from the start. That is our actual job. In practice that means:

1. Design in the genre, not from the asset. Rounded mascot proportions, big-eye styling, chibi silhouettes — these are conventions, not anyone's property. A specific character is property.
2. Design for production on day one. Seam placement that hides in the pattern, attachment points that pass a pull test, colour count that keeps unit cost sane. A character that cannot be manufactured cheaply is not a product.
3. Own it outright. We work under NDA on request, we do not claim your character, and we do not reuse your tooling for other clients.
4. Register it when it sells. Once you have a commercial character, your own trademark and design filings are what stop someone doing this to you.

Buyer FAQ