Not really. They can adopt Matt's argument- they're a DIKU derivative, but the license doesn't mean they can't use their present business model. (Either because it's the copyright holder's responsibility to sue them, or because they can weasel around the precise wording of the license.)
In contrast, no one outside of the Happy Medievia Couple is claiming they aren't a DIKU derivative. It's the weakest part of a very weak larger argument of weakness.
I think going from "breach of contract and plagiarism" to "breach of contract" would help their public relations problems to some degree.
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