Beware of Copyright Protection Laws

1. It is the artists/carvers responsibility to research the copyright laws of images and or characters they intend to use in the competition.

    (Artists often learn by copying work, however these works cannot be publicly exhibited or sold.)
 2. The judges have a legal responsibility to reject and/or disqualify participants who break copyright laws.
 
Best defense: research
when in doubt: don't

Copyright Protection

The 1976 Copyright Act provides creators and/or owners of graphic characters copyright protection that is strong, but of limited duration. It is important to remember that the copyrightable expression of a character is much more than just the character's physical appearance, and that it includes the specific name, physical appearance, and character traits of that character.

Because copyright law does not protect ideas from infringement, but instead only protects the expression of those ideas, courts will not protect character types. Therefore, while a court would probably not extend copyright protection to any man with super powers, the courts have extended copyright protection to Superman without bestowing a monopoly on the mere character of a "super man".

You may want to check this out: cute but informative.

http://blogs.law.harvard.edu/infolaw/2007/05/24/using-disney-characters-to-teach-fair-use/

also you can check out Public Domain Movies and Royalty free images.