[Zod666]

What about parody? South park made fun of Mickey mouse a few times and they didn't change his name. Say I make a cartoon crackhead mickey where he's on the pipe and bangs hookers. Then I want to release a toy of my parody. Im joking but I don't think anyone has ever released toys of parody. Parody is under fair us,would that also extend to merchandise stemming from the parody?

[Mindwipe]

It can do, but the test is higher, so you're disproportionately more likely to find yourself on the wrong end of a losing lawsuit.

Fair use is a balance of a number of conditions (in the US). One of them is how commercial the use is, and spin off merchandise is pretty commercial.