UPDATE - March 16, 2011 - There is a lot of interest being generated by the recent lawsuit filed by Provo Craft against Craft Edge in the Northern District Court in California (Case 11-cv-00297). Click here to read or down load the complaint in PDF format. Provo Craft is alleging that Craft Edge reversed engineered the software for the Cricut, which is illegal. Litigation is expensive and lengthy. That is why settlements are the norm when one does not expect to win.

Cricut appears to make and sell cutters and such for making a wide variety of things. Cricut also appears to be licensed to use a number of trademarked images such as Disney, Sesame Street, Hello Kitty, and Nickelodeon characters. Cricut is located at 151 East 3450 North, Spanish Fork, UT 84660. We sometimes wonder what is in the water in Utah as we have encountered a number of businesses in Utah that simply do not understand what the legal limits are on products. We believe they have the "We Say So" mentality: it is so because we say so. What is Cricut? The Cricut Personal Electronic Cutter is the latest breakthrough in paper crafting. Wow. But their "Angel Policy" leaves a lot to be desired. To begin with, there is no legal basis for "Angel Polices" of any type. It is weasel-wording that tries to make it appear that they are granting you permission to do something that you already have the right to do under the law. What it actually does is make the seller appear to be nicer than they really are. Somewhat like the Pope granting dispensation to sinners. It looks nice and is well received but is it really effective? First, once you purchase the machine, and if you have not signed a contract that limits your use of the machine, whatever limits Cricut claims on the use of the machines is not legally binding on you. And this applies to buying the machine from someone else besides Cricut. The machine is yours to use as you want within the boundaries of the law (i.e., you cannot make something and try to sell it as a licensed product). Cricut does not have the legal right to tell you what you can and cannot do with products that you have purchased from them. Period. Even if the product is a federally registered copyright, their claims exceed the rights granted under copyright law. Period. They are lying to you. Period. Why are they lying to you? We think they are control freaks. They want to control the market place. Some people do not pay attention to court rulings. However, courts follow past court rulings as precedent, a guide, a ruler, for present day decisions. Supreme Court rulings are very rarely overturned. From a Supreme Court ruling concerning a patent owner who was trying to control the use of his machine after he had sold it:

Patentees ... are entitled to but one royalty for the patented machine, and consequently when a patentee has himself constructed the machine and sold it, or authorized another to construct and sell it, or to construct and use and operate it, and the consideration has been paid to him for the right, he has then to that extent parted with his monopoly, and ceased to have any interest whatever in the machine so sold or so authorized to be constructed and operated. Bloomer v. Millinger, 68 U.S. (1 Wall.) 340, 350, 17 L.Ed. 581 (Supreme Court 1863).

The Supreme Court recognized a long time ago that once the owner of a machine sold that machine, the owner no longer had the right or lawful authority to dictate the use of that machine. So from what source does Cricut get the right to tell you what you can and cannot do with product you have purchased? Not from federal law or the Supreme Court. Second, cut files, which are nothing more than templates, are not copyrightable. Machine products are useful items and not copyrightable. In a letter dated December 7, 1995, the Register of Copyrights specifically addresses the subject of templates:

Section 101 defines a "useful article" as "an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information." It furthers provides that "the design of a useful article…shall be considered a pictorial, graphic, or sculptural work [subject to copyright protection under section 102] only if, and only to the extent that such design incorporates pictorial, graphic or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article."             The Appeals Board finds the patterns to be two dimensional designs for useful articles, template-type tools for use in the manufacturing process of certain items. The drawings merely follow the outline of the item(s) to be manufactured without separable authorship on which registrations can be based.

Under copyright law, templates are "useful articles" and are therefore ineligible for copyright protection. And even if these cut files, templates, were eligible for copyright protection, IF cut files were eligible for copyright protection, and they are not, the products made from those cut files would not be covered by the copyright on the cut files. This subject, the copyright covering the item made, was addressed by the US Supreme Court in Baker v Selden, 101 US 99 (1879):

In Drury v. Ewing (1 Bond, 540), which is much relied on by the complainant, a copyright was claimed in a chart of patterns for cutting dresses and basques for ladies, and coats, jackets, &c., for boys. It is obvious that such designs could only be printed and published for information, and not for use in themselves. Their practical use could only be exemplified in cloth on the tailor's board and under his shears; in other words, by the application of a mechanical operation to the cutting of cloth in certain patterns and forms. Surely the exclusive right to this practical use was not reserved to the publisher by his copyright of the chart. Without undertaking to say whether we should or should not concur in the decision in that case, we think it cannot control the present.

It was well established over 130 years ago that the item made from a copyrighted pattern was not covered by the copyright. As such, the manufacturer has no statutory authority to dictate how a machine or pattern or template can be used by the lawful owner in the absence of a signed contract.

From Ellison Equioment v AccuCut Systems, 769 F. Supp. 1090 - Dist. Court, D. Nebraska 1991 In this case, Ellison seeks to assert copyright protection in forty-seven (47) of its various shapes. As previously noted, the designs are merely silhouettes of ordinary, common items which are generally readily identifiable by even young children. The parties' products are marketed to educational environments to facilitate the teaching of children. The Court finds that the shapes in this case do not possess artistic or aesthetic features which are physically or conceptually different from their utilitarian function. Although the shapes can be said to have artistic and aesthetic features, they are inextricably intertwined with the utilitarian function and are therefore not entitled to copyright protection. As there are an extremely finite number of ways to alter the shape of, for example, a dog bone and still have it readily be identifiable as a dog bone, granting Ellison copyright protection would in essence grant it a virtual monopoly. Accordingly, the Court finds that Ellison has little, if any, probability of success on the merits. The Court further finds that the public interest does not favor giving Ellison a virtual product monopoly without competition.

Third, while Cricut may have a license to manufacture templates from trademarked images, again, without a signed contract, the use of these cut files falls under the "first sale doctrine." The first sale doctrine limits the authority of the rights owner to control the use and further distribution of the lawfully acquired product. And there is an implied license to use that accompanies the purchase of the machine. Image the Ford Motor Company telling you that you could not custom paint your Mustang nor could you drive it on Saturdays. You would think they had lost their minds. Cricut even appears to want to limit the use of their new cake cutter as well. There are NO federal court cases that we have been able to locate where someone has gone to trial over the issues in the Cricut "Angel Policy". And we read a lot of federal court cases. Fourth, the use of the cut files using the trademarked images would only be iffy should you misrepresent the source of the product The rights owners have licensed the right to manufacture cut files to Cricut. The cutfiles are not sold with a license because Cricut lacks the authority to further license the images. Cricut cannot lawfully limit the use of the cut files without a signed contract with the purchaser before the sale is made. And, if there were a signed contract, it would not apply to a third party who later purchased a used machine. As for misrepresentation of the product, we always suggest you use something along the lines of a Tabberone Disclaimer. The use of this disclaimer is no guarantee that they will not bother or threaten you. However, the proper use of this type of disclaimer will minimize or eliminate their legal position should they want to pursue the issue. Remember this, regardless of you legal rights to make and sell items, they can still sue you if they feel like it. Even if they have no real legal basis to sue. Their intent is to get you to settle on their terms because they do not believe you will fight back.