"Despite its solid EULA, Cryptic Studios was held liable for infringing trademarks by supplying the character creation kit to its users, rather than the creators of the offending material itself. "
Actually, the only trademark question that survived the motion to dismiss was whether Cryptic/NCSoft's Statesmen character infringed on Marvel's unregistered trademark rights in the Captain America character. All of the vicarious and contributory trademark infringement claims were dismissed because the Court found that the players' use of trademarked characters to play CoH was not "use in commerce."
From the decision:
"Thus, Plaintiffs have failed to allege an infringement on the part of the game users for which Defendants could be contributorily liable. See Lucasfilm Ltd. v. High Frontier, et al., 622 F. Supp. 931 (D.D.C. 1985). (holding that use of trademark not affixed to any good or service for sale did not constitute infringement.); and see Felix the Cat Prods., Inc. v. New Line Cinema Corp., 2000 U.S. Dist. LEXIS 21763, 54 U.S.P.Q. 2d 1856, 1857 (C.D. Cal. 2000) (holding that use of trademark within a movie did not qualify as use of the mark in connection with sale of goods or services in commerce). Therefore, Plaintiffs have failed to state a claim for contributory infringement of a registered trademark."
