As far as I understand the ins and outs of it all (which isn't much, so fair warning), it comes down to the enforceability of the copyright/trademark.
Using the name Wolverine is asking for trouble, but technically there's nothing punishable about it. Marvel certainly doesn't have any claim over the animal. Copy the costume though...that's trademarked and you're in trouble.
I suspect that a big stumbling block though is that most of the unprotected names I can think of are also indicative of specific powers, and therefore you might be setting yourself up for a Genericing anyway.
As for whether or not you're obligated to report them, I'll hopefully head off the inevitable debates by saying it's your call. Reporting someone for infringement merely points them out to the GMs, it's then up for them to decide if the character is actionable. But there's no mandate or rule saying that you have to petition them.
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There are two main camps to the "knock-off" debate.
One camp says, "Let 'em play! Sure they are uncreative, but they aren't hurting anyone."
The other camp says, "They are violating the EULA, and should be reported as such."
Cryptic and NCSoft were sued by Marvel several years ago because you could create reasonable facsimilies of Wolverine, Hulk and several other characters using our character creator. City of Heroes managed to settle the suit by proving that they had a system in place for reporting these violations, and that the system was being used by the players.
Obvious knock offs should be reported, lest another lawsuit come down the line. With DCUO coming soon, and Marvel supposedly taking another crack at making an MMO, It is better to be safe than sorry. Some folks use a "2 out of three" criteria before reporting. If two out of the three main parts of character identity (Costume, Name, Biography) are derivative of previously published work, it gets reported. If bio is non-existant, then one part is sufficient. I tend to use this system, myself.
If two of the three are original, you will probably not be reported.
New story arcs coming soon (ARC IDs will be aded when I finish the arc):
So, you want to join the Hellions? (level 1-14 Villainous arc)
Sparks & Steel (level 5-20 Heroic arc)
and
So you want to join the Skulls? (level 1-14 Villainous arc)
Nothing can stop you from making a claws/regen scrapper. Period.
However, using the name Wolverine, or some 733t version, or some variant in this game, even if the powers are very different from the classic Canucklehead, might get you genericed. You can talk copyright/trademark all you want, but one dissatisified customer is a lot cheaper than a battery of Marvel corporate lawyers/mutant sharkodiles taking a chunk out of the quarterly earnings.
Similar with costumes. Use at your own risk.
www.paragonwiki.com is a great source of information for this game.
New or returning to the game? Want advice from experienced players who want to help YOU?
The Mentor Project: Part of the New Player Council.
Sometimes, the name alone can get genericed- but if the costume and bio are unrelated, they'll likely leave those be and you'll just have to rename your character.
I see a lot of players whine and complain and say that they the rules don't apply to them, but the fact is that if DC decides to take their turn at suing the devs, even if it gets thrown out that's legal fees likely being taken outta the game's budget.
Besides, if you really want to play like a copyrighted character, it's not hard to make a homage outfit, or even a laughably obvious but legally distinct knockoff (after all, they've been doing it officially for years). Even better if you don't make that the focus of the character. For instance, my namesake character has a costume patterned after Gordon Freeman, but blue- I don't wear it all the time, and the character has very little in common with Freeman besides being an accident-prone, butt-kicking scientist.
'Corporal Texas', 'Private Peru' and 'Admiral Australia' can probably get away with it as long as their costumes are different enough, for instance.
Saw a character the other night that struck me as someone I'd seen before in a comic somewhere. It got me to thinking about our EULA and I was hoping someone could offer me some clarification.
It is my understanding that we cannot use copyrighted names (i.e. Superman, Wolverine). However, if the name is not copyrighted, and the character's look, bio and poweset are not related to the 'protected' character, we are okay. Is this true?
I've seen a bunch of toons (I did not report as it doesn't offend me at all) that were obvious knockoffs - Captian Americas, Hulks, Supermen and one mighty fine Dr. Strange knockoff - but their names were way off base (i.e. a Hulk look-a-like named Devious Mike). Is this not okay but they've just not been reported?
Without a full legal explanation - which I probably wouldn't understand anyway - I thought the 'spirt' of the rules was that if you made a character intended to reflect another 'protected' character - whether it be by name, look, powerset or any combination of the three (i.e. an elec/elec blaster named 'wolverine' that looks like the protected 'wolverine' or a shield/martial arts character named 'Corporal Texas' that looks like an asian cowboy) then you were in violation of the EULA - but that having one of the three differentiates the character enough that you are safe.
Am I way off base? I understand that there's virtually no way to police created characters, but is reporting them a player 'obligation' or do we just wait until a dev - playing one of their own characters - spots them to genericize them?