Disclaimer: Equestria Daily does not employ any legal experts. The following editorial is highly speculative, and although it attempts to be informative, it represents only our best understanding of the situation and the underlying laws. Please consult with an actual lawyer when taking any actions based on the opinions expressed below, and help avoid the spread of legal misinformation. Thank you.
After two years of intensive labor, the highly polished fan project/tournament quality fighting game, Fighting is Magic, has been given a Cease and Desist order by Hasbro and officially shut down production. Top pony scientists are describing the event as "really really lame". But why did it happen, and why now? And what can we do about it?
Let's break things down a bit, and get into the mucky and ill understood mud known as trademark law. Contrary to popular conception, trademarks are not the same as copyrights. Hasbro is not in any danger of losing the rights to their characters if they fail to fight all infringements, which indeed is why all of us are still here doing our things today. It's a little known fact of IP law that every instance of fanwork, be it a picture of Twilight Sparkle hugging a book, or an abridged series, or a fanfic about Rainbow Dash losing her wings, is illegal. Indeed, the copyright notices and disclaimers that so many add to their fanworks in an effort to protect themselves can be used in a court of law as an admission of guilt. Fortunately, companies see no need to pursue fanworks for the most part, and are content to ignore the laws and pursue greater profits elsewhere.
But what happens when a fan project takes itself very seriously? What happens when one reaches a level of professional polish that its use of trade dress could conceivably be taken as an act of licensing on the IP holder's part? And what if that highly polished product attempted to put itself in the public eye, and compete for attention on a national or international market? I think you know the answer already. Just as was speculated in this Kotaku article, the likeliest reason for the timing of this Cease and Desist order coincides with Fighting is Magic's sudden emergence in the competition for a main stage slot at Evo, the largest fighting games tournament event of the year.
By creating such a high quality work with exceedingly strong ties to the trade dress of Hasbro and Friendship is Magic, Mane6 unfortunately found themselves in a situation where any lack of action on Hasbro's part would be implicitly granting Mane6 a license for their product. For all of the moving and shaking the brony community has done, it has never replaced the original target of My Little Pony - young girls. Although the action is cartoony and bloodless, Hasbro could never and would never allow a license to be granted for a game in which their children's entertainment media figures beat the stuffing out of each other. We're not watching Transformers, there's different expectations to protect.
And while it's true that not defending a trademark won't cost Hasbro its control over any of the ponies depicted in Fighting is Magic or the MLP franchise as a whole, this implicit license would absolutely change the landscape of their business. Competitors who notice something like this can and will point to it in court as a precedent of permission for derivative works, which harms the value of the franchise. Additionally, it limits Hasbro's ability to seek damages in the event of a truly harmful infringement, dropping their ability to seek damages down from the total value of the MLP franchise down to merely the incurred damages from the infringement itself - a difference of many many millions of dollars, and a significantly weaker deterrent against any malicious attempts at using Hasbro trademark and trade dress. This in turn violates Hasbro's duty to its shareholders, as they are no longer operating in the company's best financial interests, opening them up to lawsuits from their public owners. It's not a thing they can afford to let happen.
Equestria Daily is aware of the petitions to attempt to bring the game back, as well as the many hurt feelings all across the community in the wake of such a monumental take down. We share those feelings: the game was going to be awesome. But it was also in clear violation of Hasbro's trade dress, and anybody who looks at the situation objectively had to know that this was coming. It isn't in Hasbro's financial interests to listen to a petition and license a game that conflicts with their intended franchise interest, making this avenue a dead end. Even if we could somehow bend their ear, the departure of multiple members of the Mane6 staff likely marks the demise of the project no matter what. It's an incredibly sad day in the history of this franchise, but the healthy thing to do is to grieve among ourselves and try to move on. For some of you, that might mean moving on from the fandom. This is a perfectly valid reaction. But angry words, death threats, or attempts to poke the legal hornet's nest are not in any of our best interests as fans.
There's still hope for Fighting is Magic. As linked in our original article, Lauren Faust has made a public offer to help design some original characters for the game to use. This would satisfy Hasbro's claim of infringement upon its trade dress, as the game would no longer be using any trademarked names or characters. It isn't a panacea for everything that's happened. Refitting the game to include new high res sprites is a process that by itself could take months, and the likely need to rebalance and retool each moveset to fit the new characters could represent additional delay of many months or even a year on production. But it is a real, legitimate chance to let one of the coolest and most ambitious free projects, not just in the pony community, but in gaming as well, live on. We can't force Mane6 to keep their doors open, but we can keep our heads held high, with hope in our hearts that they won't let this be the end. It's their choice, their decision. And we have to let it be.