City of Heroes gets some claims by Marvel against it dismissed

But none of the copyright infringement claims, the most important claims of the bunch, were dismissed. This is the case in which Marvel is suing the massively multiplayer game City of Heroes for allowing players to create characters that look similar to Marvel comic characters. Players of CoH have loads of character customization possibilities and some players have attempted to emulate their favorit Marvel characters. CoH is fighting for their right to allow such in-game conduct. It is notable that were the Induce Act to be passed this case would probably be open and shut for Marvel's victory. As it is now the result may well hinge on the language of the Supreme Court's opinion in the Grokster case, which will certainly be issued in time to affect this case.

Industry watchers are monitoring this lawsuit very closely, as the result could potentially have enormous effects on the video-game industry, particularly the burgeoning massively multiplayer market. Should the case be decided in Marvel's favor, it would mark the first time that a game publisher was held responsible for infringing material created by end-users with its tools. The result might be a reduction in amount of character customization allowed by end-users. The case may also have a chilling impact on the mod scene. Many popular online games that allow users to tinker with its code give rise to amateur teams creating works that could be considered copyright infringement.

PC: NCsoft Scores Partial Victory Over Marvel