In our first episode, Marvel sued NCSoft and Cryptic Studios, makers of the role-playing game "City of Heroes," claiming the game allowed users playing superheroes to infringe unspecified Marvel copyrights and trademarks. NCSoft filed a motion to dismiss the compaint.
Flip ahead to episode 3, Marvel's Second Amended Complaint. Marvel finally includes eight screenshots of characters Marvel claims users "created," calling them proof of "literally thousands of infringing Heroes roaming the streets of Paragon City."
Holy manufactured evidence, Batman! Marvel apparently couldn't find infringing heroes, so it concocted at least three of them itself, then tried to pass them off to the court as infringements. NCSoft points this out in its newly filed motion to strike and motion to dismiss the complaint. A "copy" made or authorized by the copyright holder is by definition not infringing, and without direct infringement, there can be no contributory infringement.
Even so, the complaint is chilling City of Heroes gameplay. Other accounts indicate that NCSoft is policing its network against characters resembling Marvel superheroes. This is more restrictive on fair use than copyright law requires. Copyright permits borrowers to make parody or criticism, and doesn't give Marvel ownership of stock elements like stars, claws, and masks that Marvel itself borrowed from the public domain. But Marvel has chilled NCSoft, which has in turn restricted what it allows its users to create.
We think the forces of fair use should make Paragon City safe for a wide range of expression: homages to Marvel, parodies, and wholly invented characters alike. We're still looking to hear more from players of City of Heroes. Please email firstname.lastname@example.org if you've played the game and would be willing to discuss any of these issues further.