If you pay for cake figures, you're also paying for the right to resell them, including on a cake. If you make the cake and either use a character pan or copy a drawing out of a coloring book, even if you freehand it, you're selling something you didn't buy the rights to. Lisa is right - you can legally give them away, but even if you exchange them for "donations" or something with monetary value you can be fined and/or put out of business.
My WMI was telling us about a friend or student, not sure which, that sold a character cake. One of the parents attending the party happened to be a patent attorney that took it upon himself to sue her.
You just never know what can happen. I did a power ranger cake once, but I'm not sure I want to do a character cake again.
What a drag, eh? 
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