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Legal issues for a “fangame” of a commercial franchise?

For example, some of you may have seen Portal: The Flash Version. I was wondering what the legal background on this kind of stuff is, for example what legal things I'm supposed to say, give credit to the original's creators and all.

Obviously, I'm presuming that I'm not allowed to make money off of it, but I just want to know what restrictions there are of making a free Flash version.

For example, would I be allowed to make a Yu-Gi-Oh! game based off the Power Of Chaos series? And if so, would I be allowed to use the Yu-Gi-Oh name or would I have to call it something else?

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    \$\begingroup\$ IANAL but you can't use anything that is trademarked or otherwise protected, also if your game is to similar it might be in trouble too. Finally there is often a small clause in the law (depending where you live) that allows fair-use in case of parody or documentaries and derivates. \$\endgroup\$
    – Roy T.
    Nov 5, 2011 at 12:08

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You can't without prior permission from the copyright holders use trademarks or graphics assets. You can however to a large extent imitate the gameplay of another game, though copying the exact Yu-Gi-Oh! rules is as far as I can tell too much.

As for relying on a company simply ignore the infringement, I'd doubt that it will work with Yu-Gi-Oh! They have to keep the value of their cards high, if you give away virtual cards in your game it could have a negative impact on peoples willingness to buy real cards.

Giving stuff away for free doesn't change whether or not a copyright infringement is an infringement. It may change the copyright owners incentive to take action, and depending on court it could affect the degree of punishment, but that is all.

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