Usually I have a pretty good grasp on the ins and outs of copyright issues, but this one, I'm not so sure about.
A customer has emailed me a pic of a DecoPac cake. I make cakes at home (mostly as a hobby, sell fewer than 2 or 3 a year), so I am not a licensed DecoPac shop.
The customer says that she will buy the kit and put on the pieces herself, she just wants me to make the cake that the pieces go on.
Here is the cake she wants me to make.
http://images.birthdayexpress.com/bexpress/assets/product_images/E5757.jpg
My first instinct was to say I couldn't do it, but offer to do a generic pirate themed cake, of which I've done some in the past for my nephews.
What say you all? Should I do the cake requested or go with my first instinct?
I don't see what the problem is if she's the one buying the toppers. All you're doing is making a plain cake. Once it leaves your possession, you have no responsibility for what the customer does with it.
IF she can buy the pieces, she has also bought the right to use them for her PERSONAL use. It is the same as if she bought a toy and plopped that on to a cake she served at a party.
the stores that buy these pieces have bought not only the right to use them but also the right to resell them for profit as part of a cake they have made.
the key here is RESELL (profit or not)
you are just making a cake -- a blank canvas.
you do not control nor are responsible for what the customer does to the cake once paid for and it leaves your possession.
it's like with wedding cakes where you don't put a topper on it and then the bride puts the ugliest tackiest topper in the world on it -- NOT your problem! (well, unless you kill her for ruining your cake! 
)
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so, yes, you can make the blank cake.
yes, she can buy the deco pac kit (that is if anyone will sell it to her) and stick it on there.
and you are not responsible for her putting it on or her ability to put it on correctly
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now as to the aesthetic issue -- well, have to agree, those kits are more than a wee bit tacky!
and I'm sure you could come up with something much nicer
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