Marvel v. NCSoft

Marvel is suing NCSoft and Cryptic, makers of the massively popular multiplayer online game "City of Heroes," for copyright and trademark infringement. Marvel claims that because players in the game, who create superhero characters to send on in-game missions, can make characters that look like Wolverine or the Incredible Hulk, the game's creators are contributing to players' infringement. Next case on the docket? Stop little Jimmy and Janie from wearing unlicensed capes while they play Superman.

Update:
Marvel and NCSoft settle all claims December 14, 2005