I am clear that licensed characters cannot legally be reproduced, but can you use pieces of them?  For example I've seen cupcakes with green fists for the Hulk, parts of the princess dresses or their hairstyles.  I have a request for cupcakes for a Big Hero 6 party.  Could I legally use let's say the weapons that the characters used or the pain faces on Baymax?  I want to acknowlege the theme without breaking the law.  Thoughts or advice?

Nope. If you can recognize it as "Hulk's hand", it is Hulk's hand, and is infringement. "Mickey ears" are just as much an infringement as "Mickey Mouse".

And, if you couldn't recognize it as "part of" that character, the kid/customer wouldn't want it. 

Safest to just stick with pre-purchased top toppers.

I talked with the client about this issue and I gave her some options including choosing another baker and she chose to change her theme to lego as her son has tons of toys she could use as toppers.  On lego's website they have a section called "fair play" that talks about copyright.  They specifically don't want their name and logo used.  The brick itself without the name is generic enough as many toy makers make bricks plus there are ready made candies and candles that look like bricks.  So we came to an agreement about a cupcake design and all's well and above board :)

Thank you to the op for posting this question.  My son's birthday is coming up in a few weeks and we are doing a small combined birthday party with his friend (my son's birthday is the 24th and his friend's is the 23rd) and I was thinking of doing a cake that resembles a Lego brick and putting each of the boys' favorite Lego men on top. I've seen where they sell molds for Lego men so I'm going to see about making them edible. Of course this is for our personal consumption and not being sold but it did answer a question I was thinking of for the future when I do have customers :) 

I too want to operate legally and not do anything that could get me even in a tiny bit of trouble lol. So I greatly appreciate all the information others post on here!!

I would think the lego men might be a problem as they were characters in their lego movie as well as the video games.  That would take a little more research.  Do let us know what you find!

This is what I found:

We can't allow the use of LEGO copyright materials such as brand names, logos and trademarks like the 2x4 brick or the LEGO minifigure for commercial purposes such as promotional campaigns, marketing and PR. This also applies to items such as building instructions and parts. For more details, see our "fairplay" policy.

Does that apply to an item that isn't being sold or promoted?

If you are doing it for free you are not bound by copyright, it's all about the money!  I am using a square brick design for the cupcakes not the 2 x 4, but even if I was it's the logoed brick they are protecting.  Like I tried to post but got autocorrected, there are ready made CANDIES that look like bricks that can be bought and placed on cakes.  Good to be clear on the mini figures, thanks for that!

I do cakes for a kid who loves Legos every year. What I do is make the "environment" for him to decorate, then he loads it up with his own Lego men when they get the cake to his house. One year I did a pirate ship, last year I did a desert kind of town for his Star Wars guys, etc. It's pretty funny to see how he decorates them becasue he tries to jam every Lego figure that he has on them, but it works out and I avoid the trademark issue completely,

But yes, if you can recognize that it's supposed to be that character then it can be considered infringement.

Thankfully I have time to figure all the legalities out while we are still up and coming :) 

I'll just tell future customers if we don't have permission we have to used premade items sold by the company and that's that!!  Thankfully i have kids and for the next few years we get to do their cakes in whatever we want :)