Uh, law usually works the other way around. If there's nothing that says it's illegal than it's legal.
I probably should have been more specific...
Is there anything that justifies that Project M is either:
1.) not a derivative work
or
2.) that Project M is a transformative derivative work (which would make it legal)
EDIT: I think I may have finally found a satisfactory answer.
Section 107 contains a list of the various purposes for which the reproduction of a particular work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research. Section 107 also sets out four factors to be considered in determining whether or not a particular use is fair.
- The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
- The nature of the copyrighted work
- The amount and substantiality of the portion used in relation to the copyrighted work as a whole
- The effect of the use upon the potential market for, or value of, the copyrighted work
It could potentially be argued that Project M is a criticism of Brawl. It asks for the comments of all of its players, and contributes to scholarship, research, and the advancement of games as an art form.
Furthermore, the purpose of Project M is innocent. It is nonprofit, and retains pretty much the same nature as the original product, though geared toward a more competitive scene. (This adds value, and therefore can add to its transformative nature. See below.) The amount of assets used is fairly substantial, but perhaps more importantly than anything, the game increases the value of the game that it modified.
Transformative uses that result in the creation of a transformative work are similar to derivative works in that they are based on the original.However, they are different in that they satisfy the underlying purpose of copyright law by building on the original and thereby “promoting the progress of science and the useful arts.”Simply put, transformative works create something new.Again, as noted in Campbell v. Acuff-Rose Music, Inc, “The central purpose of this investigation is to see...whether the new work merely [supersedes] the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning or message; it asks, in other words, whether and to what extent the new work is transformative.”Consequently, copyright owners do not control transformative uses that result in the creation of transformative works.Anyone can lawfully undertake a transformative use of anther’s copyright protected work even before the copyright expires.No permission is required from the copyright owner.
Project M contributes to videogames as an art form, and promotes balanced and emergent gameplay. It is absolutely something new. This is a satisfactory answer for me.