Scouring the Etsy forums and the Etsy subreddit has led to one very simple and powerful message: Don't do Disney. They will wreck you. Further reading indicates that Marvel and the professional sports teams are two other things that place highly on the do-not-eff-with list. Then why in bloody hell are so many Etsy sellers throwing pebbles at the Disney beehive, despite all the warnings and the occasional personal anecdote?
Arguably, the sellers are confident of one of two things:
A. They are a small market / business surrounded by hundreds or thousands of other marketplaces who are also infringing on the intellectual property, in a market full of millions of completely legitimate customers and salespersons. As if you're one tiny pee molecule in a huge public pool full of pee molecules, greatly outnumbered by non-pee molecules. You have just as good odds of seeing a ninja as you are to get caught.
Somewhere out there, a copse of lawyers is pointing straight at you.
But the number of lawyers depends on the nature of the copyright holder. The Etsy sellers community warns against using the copyrighted works of Disney, Pixar, Marvel or the NHL because they have armies of lawyers who care and actively search for products with the intent of shutting down your black market operation. Other copyright holders, on the other hand, realize that fan art actually increases interest in their products, especially if the products only occupy a different niche of their market.
The other thing: Their product is covered under Fair Use. Something that is criticizing or a parody of an original work, used as a teaching or instructing tool, or something that is radically transformative are covered under Fair Use. Fair Use is an exception to the standard laws that apply for intellectual property, but many lawyers are aware that Fair Use cases are often very contentious and challenging.
Then again, I'm no Juris Doctor so do your own reading! And consult with a lawyer if you're really starting to freak out about the Chibi Iron Man plushies in your Etsy store. As a start, Jonathan Bailey, an author at PlagiarismToday.com, published an article that is absolute must read for fan artists. Find it here.