How much legal risk does it mean to allow players to create/modify certain things in a game?

Possible scenario: player modifies something. It is defamatory/infringes on someones IP. Player makes a video of the game, it ends up on YouTube. IP holder sees it. IP holder sues.

-I guess allowing them to change 3D models and changing textures is not a good idea. AFAIK, Im responsible for whatever content they create. Right?

-What about smaller things like names, color templates, etc.

-What about a map editor? Edit the heightmap/tiles, place the built-in objects etc.

-Is it any different when the game is single-player/online multiplayer?

-What if they create a mod for your game? Are you still responsible for its content?

-What if I dont explicitly allow them to change things like textures, sounds etc, but they can change the files in the game`s data folder?

-What if I do protect the files with checksums or something, but someone hacks it?

I would like do things by the book, but I dont want to take away the player`s freedom to edit things as they like when I dont have to.

Links to court cases are welcome.

I am not a lawyer, but I think that as long as you are not hosting the content, then there is no problem. e.g. Adobe can hardly be held responsible for what people make in photoshop, be it copyright infringement or even a criminal act (although interestingly Photoshop supposedly includes code that attempts to catch currency forgers)

As an example, there are plenty of sports games without licenses that let you modify the names of teams and players. I believe this is perfectly legal, even though it's obvious the feature is there to let the player base use licensed names. Such games often allow methods for players to save and share their modified team rosters, this is perfectly legal. However, if the method of sharing the rosters involved the developers website/servers in any way, then most likely the developer would get sued. i.e. Let your users save the data as a file and share it through their own website and your fine, provide the service that lets the users share the data and you're in trouble.

Here is my opinion on your specific questions:

-I guess allowing them to change 3D models and changing textures is not a good idea. AFAIK, Im responsible for whatever content they create. Right? You are not responsible

-What about smaller things like names, color templates, etc. You are not responsible

-What about a map editor? Edit the heightmap/tiles, place the built-in objects etc. You would only be responsible if you run some infrastructure that allows players to share the maps

-Is it any different when the game is single-player/online multiplayer? If you are hosting multiplayer servers then you would be responsible for making sure user created content is appropriate. If you're not hosting the user created content then you must still make an effort to warn players that they may (i.e. will definitely) be exposed to obscene content in multiplayer play.

-What if they create a mod for your game? Are you still responsible for its content? You are not responsible unless you host the mods on your website or something

-What if I dont explicitly allow them to change things like textures, sounds etc, but they can change the files in the game`s data folder? You are not responsible

-What if I do protect the files with checksums or something, but someone hacks it? You are not responsible, but if you ship something inappropriate which can be accessed through hacking then you are responsible (e.g. Hot Coffee, or that guy that padded a console DVD with South Park episodes instead of with zeroes, it was inaccessible except by hacking, but they still had to recall all the DVDs)

Again I am not a lawyer, I may be wrong about any of this.

Edit: I suppose the City of Heroes vs Marvel case is relevant: http://en.wikipedia.org/wiki/City_of_Heroes

That about sums it up. Lots of programs allow people to create new and custom content. The exact details differ wildly. Sometimes lawsuits result, but I'm not aware of any major game-related suits that have made it all the way to a final ruling about legality involving user-created content.

When the OP asks "how much risk is there", I'm really not sure how anyone could answer that. Quantifying risk is hard. Should we say, "That is risk level 7, beware!" or something similar?

There is risk in everything you do. People can make legal threats and sue you for just about any reason they can imagine. The more money you have, the more creative people are at imagining up how you harmed them. After a series of increasingly-expensive legal posturing ranging from C&D demands through protracted court proceedings, ultimately the decision about the legitimacy of the accusations and any penalties involved falls to the opinions of judges. Because of the cost it is fairly rare for them to even reach the courts, and when they do they are usually quickly settled for a bit of money and possibly with an agreement not to do something in the future. The risk of EA or Activision or another multi-billion dollar company being sued over custom content is much greater than an unknown studio with no money. They also have legal departments that deal with threats and legal posturing every day.

If you are engaged in business you need a business lawyer for occasional work. Have a chat with your lawyer, especially when you have concerns about that. They know your exact situation and can help explain, understand, and mitigate the risks based on your personal situation. If you are concerned enough about it, your lawyer should be able to help you build a safe wording in to your EULA, or if you are even more worried about it, help you figure out what to remove from your game.

Thank you for the detailed answers!

On a related note, Copyleft and Open Source would have a hard time existing if the law did penalize original authors for how their works are used or implemented. I can't disregard meritless claims, but as for valid claims I think you're reasonably safe.

And yes, folks, I'm back.

Welcome back, Mona!