I have seen many sites that offer designs that are simular to licensed designs. I WILL NOT buy licensed designs from anyone not licensed to sell them. However, like I said there are many that are simular. We know what it is a representation of. For instance, many places sell "mouse ears" designs. The shape and colors are all correct, just no detail. Do these fall under licensed designs, too? I hope this makes sense! lol Thanks for your help on this.

Copyright law does allow for some legal reproductions: See section 107 of the copyright law.

"Section 107 contains a list of the various purposes for which the reproduction of a particular work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research."

Modifying licensed designs to resell or giveaway does not appear to fall within the legal guidelines so I would agree that staying way from downloading or purchasing such is a good idea.