My DH works with a girl who wanted to buy a cake. She's a member of the owner's family so he didn't feel like he could say no. We had a fairly full schedule that week but we fit her into the schedule.
She wanted the smallest, cheapest cake we sell for her three year old's birthday. He loves Sesame Street. DH discussed the copyright issues with her and explained that we could do a theme but not the characters. If she wanted characters on the cake she could purchase figurines and put them on the cake herself. DH has great design instincts and described a lovely backdrop cake he pitched to her. So far so good. I emailed her with our standard order form and advised that if she had any further design ideas to let me know via email.

Her cake was scheduled for Saturday and on Tuesday she emailed me five Pinterest screenshots of basically the same cake - each with a big Elmo face on top. I was dumbfounded. These we not at all what I expected from the design DH had described. We discussed it that night at length. He was as surprised as I was.

This discussion bothers me every time I have to have it. After all, this is the real world and we could just do the cake "under the table," never take or post pictures of it and make our customer happy. Realistically nobody would ever find out. She's a member of the family that owns his company so we want to make her happy. But what happens later? If we do that we've set a precedent and any return business we might get from her will be tainted with copyright leniency. Is that the kind of return business we want? I don't. I don't want to keep having this argument. Especially if the argument gets harder and harder to defend. "You did an Elmo for  his 3rd birthday, why can't you do a 3D Yoda for his 4th?"

DH assured me that I had final say of the design.

I looked around on CC for backup and found someone who had actually contacted Sesame Workshop with a direct question about reproducing Elmo. I sent a reply to my customer officially outlining our copyright policy and quoting part of the post I found:

"You have probably already heard this, but copywritten characters (like Elmo) are someone else's property and it's illegal to sell them without permission or payment to whoever owns the property. HOWEVER if you have figurines, or can get them or make them, we can do a cake to provide a backdrop for you to put them on yourself. We have done several cakes this way and they turn out really nice. As long as we know the scale (a picture with a quarter or other size reference works well) we can make a cake with a place for you to add them.

This is some clarification on doing Sesame Street characters from a copyright attorney for Sesame Workshops:
"Sesame Street Workshops will not give permission for any of their characters to be recreated for professional bakers because it causes conflict and competition with their business partnerships.""

So my answer is no. We are not going to do that.

Wednesday (the next day) at work she tried to pressure DH into ways around the policy. Like putting only the outline of Elmo's head on the cake and letting her put on eyes and a nose (provided by us, of course) when she got the cake home.
Infuriating. It feels like "Mom said no so I'm going to ask dad."
We don't have kids. My sympathies to parents who have to deal with this kind of thing. What an awful feeling!

I don't like being the heavy, but if it makes his work life easier by telling her that I am being inflexible, fine.

Wednesday night she cancelled her order.

Firstly, I’m sure I won’t be the only one to ask...Who or what does DH stand for? Very confusing to follow the post not knowing what or whom this DH is in relation to you. 

“She’s a member of the family that.... owns his company .... so we want to make her happy.”  

Well whomever this person is in relationship to you, you did the right thing. I have several professional cake decorating friends, and all of them refuse to do licensed character cakes. Obviously for the same legal reasons you stated. No matter the customer, once you head down that slippery slope, it’s hard to go back. You have definitely set a precedent. And the customer is certainly not around to help if you are slapped with a lawsuit are they??

Sorry - DH is my Dear Husband. He and I own the business together. I'm the president and he's the vice president. We both have stake if the business gets slapped with a lawsuit. I'm not a bit sorry she cancelled the order. She is definitely going on the "we're booked" list.

yeah she wanted the friend* deal -- you did good -- try to not let it get to you -- just part of doing business -- and I know you know that it will take saying no more than once -- consistently -- because their are tons of people who will do this -- right? 

* she was exerting very unfair pressure on you guys -- not cool -- on the one hand it's "we're all one big happy family here at zyx company -- so you could do this -- wink wink" and on the other hand it's "hey my dad signs your check buddy"

glad that one's over - whew

I think you handled it well. I definitely wouldn't want to do business with someone that puts pressure on me to do something that I know is wrong, and that will fall back on me. Good that she cancelled her order because I would have done it for hee if I were in that situation. It definitely would have become a you did it before, why can't you do it now, situation. If they're not willing to buy figures, it's a flat out no from me. I'm not risking my business for anybody. 

Yes, you handled the situation well...

You did well, KCakeSide!  It is likely she would have cancelled the order anyway.  People who argue and try to manipulate you usually aren't legitimate customers anyway.  Good riddance!

I applaud you for giving her so much information, for trying so hard to accommodate her, and for being so gracious when she summarily pulled her order because YOU WOULDN'T DO THE WRONG THING.

In this day & age, it's not just you who must avoid publicizing having done a cake like this--you have to rely on your customer AND ALL OF THEIR GUESTS to not post photos and/or your business info.  The companies that go after people for copyright/trademark infringement don't care at all who asked you to do it, they care that you got something/anything for having done it.

Wilton has, for years, made detailed pans of copyrighted characters.  Though they're marked, and marketed, for home use only, it's given many the idea that those characters are fair game for all bakers--that's part of what you're fighting.

She'll find someone who doesn't care, or who doesn't know, to do the job, and will likely get away with it--a sad truth--but you have the reward of knowing that you did the right thing.  Sleep well. 

I have to admit, I was fuming pretty badly. Most of my customers are understanding after I explain the legalities but this girl's attempts to get around the policy via hubby at work really got under my skin. He's a nice guy, and wants our cake customers to be happy. I feel like she tried to take advantage.

She put him in a really difficult spot. I don't know what kind of leverage she was trying to use - her family connection or her work proximity but either way it was not cool. The reality is she does have leverage on him, but not on me. I just hope in the moment he felt supported and not abandoned.

Speaking of - THANK YOU all for the support. I have shared this thread with my DH and I think it's done a lot of good for him to see that there are actual people out there that are behind us!

oh geez -- that was so not cool -- hope it is permanently behind you