The Sign of Protection is a symbol that prevents Sutekh or his Totems and Mummy Servants from detecting the location of their prey. When Afzel met Andre Toulon in Paris during 1902, he commanded the puppets to build the sign and put it on the door of the Theatre Magique to prevent the mummies from tracking him down. Valentin accidentally knocked down the sign while fixing the door of the theater, which lead the mummies to storm the theater and kill all of the puppeteers. When Toulon bought his puppets to life with the souls of his puppeteer friends, he had a scar shaped like the symbol placed onto his arm by Retro-Blade's knives. Since the mummies couldn't track down Toulon they were commanded by Sutekh to kidnap Elsa instead so that they could bring Toulon to them.
During 1942 Dr. Ivan also makes necklaces with a sign of protection on it that he calls an Elder Sign. He uses these signs to stop evil psychics working for the Nazis from tracking his location down.
Retro Puppet Master
Puppet Master: The Legacy (Archive footage)
Puppet Master: Axis Termination
In the Region 2 Kushner-Locker DVD of the movie, there is extra scenes of the puppets building the signs.