Will My Star-Wars Themed Product Idea Get Me Sued?

On sites like Etsy, I see a lot of products that are inspired by fictional characters and stories, and I've been wondering about their legality. I've made a food product inspired by Star Wars, but how do I make sure that I'm not infringing on a copyright or leaving myself open to a lawsuit from Disney or LucasFilm?

You’re right to wonder about the legality of “inspired by...” products. U.S. Copyright laws clearly state that only the work’s “author” has the right to reproduce, distribute or make “derivative works” of the work. What’s a derivative work? That could include an updated version (such as a software update), or a spinoff (like Star Wars action figurines from the movie). Trademark laws also prohibit engaging in unfair competition by diluting or copying another’s trademarks.

There are exceptions to the copyright rules, known as “fair use.” This includes parody (ever seen the Family Guy spoof?) and news reporting. However, the more your use is generating money for you while trading off the fame and renown of someone else’s hard work, the less your use will be considered “fair.” Especially if you start to make boatloads of money off it.

Related: Etsy Just Bought an Electronics E-Tailer Called Grand St. Here's Why.

Here are two work-arounds: contact Disney (or LucasFilm -- whomever owns the work) and negotiate a license fee. This way, you will clearly have permission to use it and won’t be deemed to infringe. Or, come up with an alternate idea.

You may be wondering “Why do so many smaller companies get away with not paying a license fee and nothing happens to them?” First, they may be so small (and making so little money) that they don’t even hit the radar of the larger corporations. Or, the larger companies may be sloppy about enforcement (to their own peril). But when you play fast and loose with these concept, you run a definite risk of litigation that could shut down your company. Speak to an intellectual property attorney to cover the scope of what you’re looking to do, and to see if there are any copyright or trademark exceptions that give you a safe haven. 

Related: Save Time and Money, Tell Your Attorney Everything