Older stories like the The Three Little Pigs and Goldilocks is in the public domain so you would not have any issues with those. Creating merchandise or even using the story itself in puppet plays of current children's books though would be covered under copyright.  It would be best to get in touch with the author to ask for permission. That being said it is pretty common in library situations to have readings of children's books and often entertainers do programs that are based on these books that can be presented along with a reading. For example you could have your own character that reads the books to the children and I doubt you would get in trouble. Children's books are normally illustrated. This can be by the author themselves or by an artist. These illustrations would fall under copyright so if you where to replicate them in puppet form I think you would be getting into a grey area.  Now if you created your own version of a character based on description you read in the book then you may be ok, but again you are in a grey area and if you tried to market the product based on the reputation of the book then you might get hit by a lawsuit. Again... ask the author.  Quite often they are happy to work with you. Just means more publicity for their book.

Best rule when it comes to copyrights: assume nothing, get permission for everything... Use only public domain stuff or make your own stories, etc

I enjoyed this thread too, Na take all the internet you need.

@Na, Wow!!! I love the quote from your Grandpa!  I have this same feeling and feel as if I'm the only one. Thank you for sharing that!

You're welcome guys!

Thanks guys. I really appreciate all your suggestions and feedback.

I dearly love those old fables we all grew up with but to be honest, I tend to steer clear of recreating them. Not so much because of copyright issues (although Na has put the fear of God in to me with previous posts relating to copyright!) but because I enjoy the process of conceptualising a new character and nothing would upset me more than setting out to re-create something that I adored and had pictured since a child and getting it wrong - which I'm quite good at doing!

You know, looking back at this thread it occurs to me that I missed a salient point. Lizzie, you were discussing how you were worried about creative outlets vs professionalism. Something that I'm planning on doing with my re-generation is to do two things:
1. Offer more than just shadow puppets. This increases my ability to sell stuff because there's diversity of product, but it's also mostly about me trying not to be bored.
2. Even though the product range is wider, it's more defined. That is, I'll have 6 product lines (ie. shadow puppets #1, something else #2, etc) but a very very small selection of characters. This allows me to keep the creativity flowing, but also keeping it in check so I don't get overwhelmed with a random hodgepodge of designs or ideas.

One large reason why I'm taking so long to change things up is because I'm worried about stickitivity. Every four years or so I change what I'm doing. I'm probably on my fourth company name for the decade, and I've recently chucked out about five or six archives for different projects. I'm hoping that by sticking to a plan it works - each product line will be in rotation, and I can release a new character every so often - but it still worries me that I will tend to wander off creatively and mentally after some time.

I think after working my way through this process for me it is probably best to have X projects for 'work' and Y projects for 'fun' and try to avoid mixing them together. A big part of my problem with professionalism was simply that I tried to do too much at once. And that's fairly easy to fix

But like you, I worry that I simply will get frustrated with boundaries.

Not so much because of copyright issues (although Na has put the fear of God in to me with previous posts relating to copyright!) but because I enjoy the process of conceptualising a new character and nothing would upset me more than setting out to re-create something that I adored and had pictured since a child and getting it wrong - which I'm quite good at doing!

I don't mean to scare anyone. I just get frustrated because the world out there tends not to appreciate how much work goes into things and tends also not to want to pay for that value. Just an hour ago I was reading a games forum where people are complaining that a game costs about $10 but only had a few hours worth of play to it, even though the graphics are gorgeous and the play is fun. They're too busy thinking "me" to notice that $10 is bloody cheap when you consider the thousands of hours of work that goes into making a game - short or long.

I like to talk about copyright because so many people simply don't acknowledge it, let alone discuss its pitfalls. I think people shouldn't be afraid to try copyrighted stuff - within the boundaries of the law of course - because otherwise we wouldn't have awesome stuff like oh, The Office US.

I do agree with you though about the problems of getting it wrong and that's an interesting POV that I hadn't considered before.