After a bit of a wait, the creator of Shards of Equestria has received the inevitable letter from Hasbro's legal to shut the card set down completely. We may need to come up with our own MTG style game, though looking at the lawyer message it might need to revolve around OC ponies if you want complete safety.
The lawyer actually did a really great job at explaining every single aspect in detail. If you have ever been curious on what exactly you can get away with in terms of parody and copyright in the pony world, its definitely worth a read. Find that here, or in case the site shuts down, after the break.
Dear Mr. [redacted]:
Thank you again for your quick response and patience in awaiting a reply. We have now discussed the matter with both Hasbro and Wizards of the Coast, and regret that, as stated in our original correspondence, although both companies appreciate your enthusiasm for their properties, they must protect their intellectual property rights and therefore deny your request. The fact that you copy, display and distribute the MY LITTLE PONY® and MAGIC: THE GATHERING® trademarks, pony characters, character names, MTG trade dress, Mana symbols and other elements of the two properties is sufficient to violate copyright, trademark and other intellectual property laws. The fact that your cards are available in downloadable format increases the potential danger and impact of that infringement.
Under U.S. copyright law, the copyright holder has the exclusive right to reproduce, distribute, and display the copyrighted work and to create derivative works from it: http://www.copyright.gov/title17/92chap1.html#106. While these exclusive rights are somewhat limited by the fair use doctrine (codified in 17 U.S.C. § 107 – http://www.copyright.gov/title17/92chap1.html#107), your use of Hasbro’s MY LITTLE PONY® and MAGIC: THE GATHERING® elements is not fair use.
“Fan fiction” does not constitute any of the potentially protected fair use purposes, such as criticism, comment, news reporting, teaching, scholarship, or research. That you call your work “parody” does not make it so, nor does it mean that it does not infringe Hasbro and Wizards’ copyrights and trademarks. In fact, your use of the MY LITTLE PONY® and MAGIC: THE GATHERING® elements is not parody at all. Under well-settled law, a parody comments in some way on the copyrighted or trademarked work that it is copying. Your game, on the other hand, does nothing of the sort. Rather you simply use Hasbro’s and Wizards’ intellectual property to create a game from these characters and elements in order to “avoid the drudgery in working up something fresh.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 580 (1994).
In addition to defining the “permitted purposes” under the fair use doctrine, Section 107 of the U.S. copyright law also sets out four factors to be considered in determining whether or not a particular permitted use is fair:
(1) The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
(2) The nature of the copyrighted work
(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole
(4) The effect of the use upon the potential market for, or value of, the copyrighted work
Even if your use of the MY LITTLE PONY® and MAGIC: THE GATHERING® elements fell within one of the permitted uses, which we do not believe it does, it still infringes Hasbro’s copyrights under an analysis of the four factors: (1) the nature of the copyrighted work is creative and of the type afforded the highest protection under copyright law; (2) you incorporate virtually the entire copyrighted works, not small or insignificant portions of them; and (3) there is an effect on the potential market for the copyrighted work as both properties are licensed and/or sold in trading card or collectible card form, so your work is a direct substitute for the original works.
We therefore must reiterate our request that you remove the MY LITTLE PONY® and MAGIC: THE GATHERING® elements from the Shards of Equestria game and from your website.
Counsel for Hasbro, Inc. and Hasbro Studios LLC