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What's your stance on plagiarism?
I suppose what I'm trying to get across is that you can debate quantifiable damages all day, which is well and good - but the ethical issues here (or much of the legal infringement issue, really) have very little to do with them.
I think you'll concede that anyone who engages in plagiarism is engaging in an immoral act and is demonstrating a distinct lack of personal integrity - yes?
Or, put another way: would you have hired me if you knew that I, for example, had taken Tolkien's world, changed around most of the names, used it as the basis for an "all-original gameworld" that I had personally "created," but was never (for whatever reason) taken to court over it by the Tolkien folks?
Taking someone else's work and claiming it as your own is morally wrong - there isn't a whole lot of room for discussion there, I don't think. The fact that they then took this even further and made profit from that wrongdoing exacerbates the offense, but it certainly shouldn't be a measure of its totality - that they did it at all is worthy of reprimand.
About all you can really do is question the degree of moral culpability given the context of the wrongdoing here (i.e. your economic damages argument), and we'll have to agree to disagree there, but I don't think you can debate its actual existence.
Pre-arrangement SoI (and other fanfiction sorts of MUDs for that matter) is quite distinguishable legally and morally on these facts, but as I recall you and I have had this discussion before. <g>
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