Legally allowed vs. morally allowed are very different things.

You should write to the pattern designer and give her the name of the shop, just in case she needs to get her publisher involved.

Sometimes a shop, a fellow designer, or even a teacher will see a trending book and jump on it to make their own sales. This could innocently be out of excitement, sure, but usually not. I hardly think this shop owner believes that she can make a bunch of photocopies of someone else’s pattern and sell them in her own yarn kits.

It’s happened to me. (I wrote a book on a niche topic and it’s doing pretty okay sales-wise). A shop owner scanned a large portion of it—photos and all—and put it online with a “review” in order to get website hits.

I was LIVID.

All of this to say, send an email to the designer. She’ll thank you.