Abuse of Model Releases to sell "iffy" products?

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tunalegs

Pretended Artist
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A friend sent this blog post to me:
http://thegreypoint.wordpress.com/2013/06/10/cosplayer-pillows-the-actual-story/

Apparently a photographer went to a comic convention, took a bunch of photos of people in costumes - and then returned the next year to sell products with these people's images on it.

The photographer is claiming that he is legally in the right because the products he is selling are "promotional items" used to promote his business. Even though they are apparently selling these items for profit. At least some of the people on these items signed releases allowing the photographer to use their images for "promotional" purposes.

So is this person within their right to consider items sold for profit as "promotional items"? Or has he mislead the people he photographed in an attempt to make money off of them.

I also have to wonder where it stands to sell products bearing the likenesses of copyrighted characters, even if the people who made the costumes did not do so to make money!
 
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