News.com reports that Marvel and NCSoft have settled their lawsuit over players making characters that looked like Marvel characters in game – a suit that many observers called, to use legalese, ‘as dumb as a bag of kittens’. This case looked like it had lost serious traction when the judge found out that Marvel themselves created the offending characters (normally, NCSoft and Cryptic are extremely diligent about coming down on copycat characters when they are pointed out by other players).

The terms of the deal are unreported, but this snippet was in the article.

“The parties’ settlement allows them all to continue to develop and sell exciting and innovative products,” NCSoft wrote in a press release about the settlement, “but does not reduce the players’ ability to express their creativity in making and playing original and exciting characters.”

The problem, according to several legal experts, is that the language of the announcement doesn’t make clear the terms of the settlement. Thus, it is not known whether Marvel has retained its right to seek legal relief against publishers like NCSoft or players who create potentially infringing characters in games like “City of Heroes.”

That’s because the announcement included the following language: “Therefore, no changes to ‘City of Heroes’ or ‘City of Villains’ character creation engine are part of the settlement.”

My guess is that one of two things happened. One: Marvel realized they were just being idiots. Sure, City of Heroes might one day compete with Marvel Online (assuming Marvel actually manages to find a partner to actually, you know, take the project to completion). But until then, City of Heroes only whets the appetite for the comic book genre, at a time when comic books had been falling out of favor (due largely to stupid decisions by, um, Marvel).

Second, and perhaps more likely, perhaps Marvel realized that someone might try to make a DC character in their own online game someday.