Marvel Enterprises Inc. sued NcSoft Corp. and Cryptic Studios Inc. in regard to their massively multiplayer game "City of Heroes". Marvel claims that the character customization functionality in the game allows players to create superheroes that closely resemble trade-marked Marvel comic characters like "The Incredible Hulk" and the "X-Men". Marvel argues that the defendants are liable for their customers' actions because the games are played on the defendants' servers.
This is uncharted territory and it raises the larger question of the extent to which a publisher, developer or gamer could be liable for creating modding tools. One of the major difficulties in pursuing such a lawsuit is that mod tools can be used for non-infringing purposes. Accordingly, there is an argument that mod tool makers should be no more liable for damages than the makers of "Photoshop" or the manufacturers of computers. After all, when it comes to liability for enabling infringement, courts have held that people infringe copyrights, and that machines or software tools generally do not.