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Then what are these different rules and how are they applying to this situation.
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From Wikipedia...
In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include:
1. the purpose and character of the use, including whether such use is of a 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; and
4. the effect of the use upon the potential market for or value of the copyrighted work.
1. The commercial consideration does not apply in either case. No one is trying to make money from a character or a forum avatar. However, the nature of the use is relevant. A character in the game is entirely and purely DERIVATIVE. The original character has a certain appearance, name, background, abilities. A character in the game has all of these aspects as well. A forum avatar has no background or abilities. It is not intended to be a representation of the hero it portrays. It is a static icon intended to represent a forum poster.
2. Item 2 doesn't really apply in either case as it refers to the nature of the original work and both examples here are drawing from the same original work (existing comic book characters) which are indisputably fictional.
3. This item is key - the amount and substantiality of the portion used. The infringing character in the game had the name, costume and background. It was a thorough and comprehensive copy. A forum avatar is a much more basic representation and only of the physical appearance.
4. This item is also relevant. If people can create representations of Marvel's character in another game, they have less motivation to play a game from Marvel. This has the clear potential to affect the value of their IP. Conversely, using an image of one of their characters as a forum avatar does not have this potential (at least, not in any way that I can think of).
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Notwithstanding the provisions of sections 17 U.S.C. #106 and 17 U.S.C. #106A the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include
1. The purpose and character of the use, including whether such use is of a 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; and
4. The effect of the use upon the potential market for or value of the copyrighted work.
That is the entire quote of the section from Wiki that you used. I do agree with your examples to the factors to be considered for Fair Use; however I do not believe that they trump the provisions in section 17 U.S.C #106:
#106. Exclusive rights in copyrighted works
Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
(1) To reproduce the copyrighted work in copies or phonorecords;
(2) To prepare derivative works based upon the copyrighted work;
(3) To distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
(6) In the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.
Now my original premise was not intended to be insulting. I was attempting to bring to the discussion the realization that unless you are an attorney, or a judge specializing in copy right and trade mark infringement than no one actually has definitive knowledge on the subject. And that those that are using non-original avatars may in fact be guilty of the same infringement that they are condemning others for.
