I don't really have a strong opinion about the underlying legal issue in this thread. But, it's worth pointing out that settled case law is the relevant standard here for determining what the law says. Whether or not some material was pulled doesn't determine whether or not it legally needed to be pulled. The fact that someone got his lawyer to write a C&D letter or even that a case was filed and settled out of court and resulted in a site pulling some material has very little bearing on what the law actually is. Anyone who has examined such cases knows that are often settled on the grounds of what is less costly or less trouble rather than on what is or isn't strictly legal. Anyone who has had to make decisions regarding the material hosted on a site knows that there are often other considerations that have nothing to do with the legal merit of the complaint that end up deciding what action is taken.
For example, assume I am the owner of a fan site on which material related to a game is posted. Further, assume some material had been posted and one of the people claiming involvement in the creation of that material had their lawyer send me a strongly worded letter claiming he represents someone with a copyright claim on that material and implying that legal action was imminent if I didn't take the material down. Or even saying the civil proceedings were already underway and a case was on the docket. No matter what the legality of keeping the posted material up on my site (in other words, whether the complainant would likely win in court or not), my attorney is very likely to advise that I just take the material down, since fighting the case in court will be expensive to me even if I win and the marginal value of having the material up is very small. The latter is particularly true if the site in question is a fan site and there is either no revenue accruing to the owner by hosting the material or the only revenue is ad revenue, which will tend to be very small for this sort of material.
It's not until someone actually fights all the way through the court case that we find out what the law actually says for a particular case. Cases where someone got some material pulled without going that far often mean very little. It certainly does not mean that the law has definitively said that they were legally correct (or that they were not).
BTW, to be perfectly clear: I am not saying one way or the other what the legal disposition of the situation early in this thread would be. I am just saying that a claim that, "Here's a situation where someone complained or filed a case and the site decided to meet the complainant's demands, therefor the complainant was legally correct" is overdrawing its conclusion, unless the end of the story is, "... and the court ruled in favor of the complainant."
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