Gandalf the Wizard Clown is now using that name under license from Tolkien Enterprises. I have no idea what the terms of that license are, but the point is that he -actually got permission-. If muds like Shadows of Isildur can say the same thing, then obviously I have no issue with them. So far no one has shown me any evidence that any of them are doing anything but using the IP without license.
(And again, whether you charge money or not isn't legally relevant.)
--matt
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