It is really interesting, if frustrating, since copyright law doesn’t (and couldn’t) cover all possible specific cases explicitly.

There is also a question of theory versus practice – people *can* sell collages, but that doesn’t necessarily imply they *may*. The copyright holder would have to take action to stop it, though, and I would expect in the case of collage most wouldn’t bother. The sources I’ve read treat collage as a sort of gray area. Only the copyright holder can produce “derivative works” (so I am protected from someone taking my pattern, producing a slight modification of it, and selling it as their own), and it’s possible a collage would count as a derivative work – depends on the nature of the collage, I guess.

Bill’s software situation sounds directly analogous to the fabric one – if you make something you can sell it, but you can’t sell the design itself with which you made the thing. But software can require license agreements so it can do whatever it wants in terms of licensing.

I think the answer to your last question is “yes, if and only if you can defend that the painting is satire or commentary” (see: Andy Warhol). Otherwise no, it’s copyright infringement. If you go here: http://www.law.harvard.edu/faculty/martin/art_law/image_rights.htm and scroll down to the first image in the text, the paragraph afterward describes a case of this nature. This would protect, say, Ben’s collages, though, which are usually interpreted as commentary.

People can sell collages using (presumably) copyrighted imagery, but perhaps since the pictures are used in pieces rather than as a whole it doesn’t count. I know with Bill’s 3d art he can’t resell the original models/backgrounds he uses but he holds the copyright to any artwork he makes with them – that’s spelled out when you download the model.

I wonder how meta you can get with this. Suppose I paint a picture of a can of Pepsi, the design of which is copyrighted (or trademarked or whatever). Can I sell that painting?