Yeah, sounds like they're going a little overboard.
I will say, though, that I learned something a while back that made me a little more sympathetic to companies telling people off on copyright stuff. At least in the US, part of the copyright law is that if you have a copyright on something, you HAVE to make people not use it, or you lose the copyright. So even if you think "well hey, that daycare's not doing us any harm by painting our character on their front wall," you still have to stop them if you want to keep your copyright. It sucks.