I've seen lots of t-shirts being sold with celebs, models, athletes but are altered in some way. For example, the M on Super Mario's hat is removed or the legendary Muhammed Ali Knockout Pose is pasted ontop another logo. Do I need to ask, lets say, M. Ali for permission to use his photo or Nintendo to used Super Mario or Can I alter colors and add or remove certain aspects on the photo?
The safe answer for most of what you're proposing is "no, you can't do that." If you start with somebody else's photo or logo or image and modify it, you're committing copyright and/or trademark infringement. If you draw your own pixelated plumber-looking guy, you might be closer to legal, but you're still running the risk of drawing heat from Nintendo. And if that happens, even if you're in the right, you probably can't afford to fight about it.
If you can get permission from a celebrity AND whoever owns the rights to the picture or logo you want to use, you're in better shape, but given that celebrities make tons of money from their images and endorsements, you can imagine what the chances of getting permission are (especially if you want to sell stuff, instead of just donating the designs to Charities for Cute Handicapped Children With Horrible Diseases).
You're better off making your own, new, fresh designs. Then you can get famous and go after people who rip off your work!
As a general rule, infringement doesn't have to be exact to be infringement, it just has to be close enough.
CA has a publicity rights law, Civil Code section 3344, that says that individuals (usually celebrities) own the exclusive rights to exploit their images for profit - dead celebrities' heirs are covered, too. So if you're seeing t-shirts with celebrities' images, they're either licensed from the celebrity, or they're violating the celebrities' rights. This law has teeth - it provides for disgorgement of profits, punitive damages, and attorney's fees, and celebrities usually have massive resources to fight these battles, so they're not good fights to pick. Altering the images won't change the liability if the images are recognizable, and if they're not recognizable, no one would want them anyway, so anyone who thinks that changing a detail (or even a few details) from an image will protect them from being sued is likely be operating under a very expensive erroneous assumption.
Likewise, changing a detail of a copyrighted photo or a trademarked fictional character won't be a good defense to a copyright infringement, unfair competition, or trademark infringement lawsuit. If it's recognizable enough to have value as a product, then it's recognizable enough to be infringing.
You might want to consult with an IP/business lawyer before you launch this business so you can form your business entity properly, name your business with an available and viable business name and trademark, use the right domain name, acquire and protect your IP, get the proper insurance, use the proper website disclaimers, apply appropriate sales and marketing procedures, etc., etc., etc.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
If your business involves selling CREATIVE – and not simply unmodified -- images of celebrities then, I think, you should pursue your business under the guidance of your own intellectual property attorney. If you only intend to sell clothing adorned with photographs and other images of celebrities as they normally appear then, like my colleagues, I think your plan is unlawful.
There are very significant exceptions to the rules discussed by my colleagues which, for creative artists who have something of value to convey, frees up and allows – in certain circumstances -- the use of others’ copyrighted photographs and the use of celebrity likenesses. In short, parody is alive and well as a defense to a copyright infringement claim (and permits reproduction of much of the original work in order to “conjure up” that work) and the First Amendment stands quite firm between a celebrity and those who, without malice, use images of celebrities.
There are WAY too many court decisions that permit the artist’s right to modify existing works and to use the images of celebrities in order to enrich our culture for us attorneys to stand pat on the “rules” that copyright owners own the exclusive right to create derivatives of their works and celebrities have tight control over likenesses. While every case stands and falls on its own, the following cases provide the guidance on how to decide these questions.
Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180 (9th Cir. 2001).
http://www.altlaw.org/v1/cases/1610780
Rogers v. Koons, 960 F.2d 301 (2d Cir. 1992)
http://www.altlaw.org/v1/cases/555398
Leibovitz v. Paramount Pictures Corp., 137 F.3d 109 (2d Cir. N.Y. 1998).
http://www.altlaw.org/v1/cases/1087813
ETW Corporation v. Jireh Publishing, Inc., 332 F.3d 915 (2003)
http://www.altlaw.org/v1/cases/1126283
Comedy III Productions, Inc. v. Gary Saderup, Inc., 25 Cal.4th 387 (2001) (Therefore, if the celebrity's likeness is merely the raw material from which an original work is created, where the product containing the celebrity's likeness is so transformed that it has become primarily the artist's own expression rather than the celebrity's likeness, then there is no violation of the Right of Publicity.)
http://www.law.cornell.edu/copyright/cases/25_Cal4th_387.htm
