In the UK the situation is there may be no copyright protection on the Sherlock Holmes books, but what there is, and it's a biggie! is TRADEMARK protection on named characters.
Checking the UK's IPO (Trademark Office) database reveals that Europe-wide trademarks were taken out on the characters of Sherlock Holmes, Doctor Watson, Mrs. Hudson, Professor Challenger, Brigadier Gerard and the Hound of the Baskervilles by the Sir Arthur Conan Doyle Literary Estate in 2000.
According to a UK trademark lawyer, this means that no-one can legally use those characters in Europe without a licence from the trademark owner whilst those trademarks are still in force, which they are.
To breach this trademark protection, at least in the UK, is a criminal offence and the offender can be prosecuted under the UK's Trade Marks Act 1994, and section 92 says that the offence carries a minimum 6 month in jail and a £5000 fine!
Is it any wonder that we steer clear of the issue here in Europe?