Nintendo continues its fight against gamers

[Iron]

No, it does not fall under fair use. Pokemon Essentials uses Nintendo IP and they have every legal right to demand it be taken down. Fair use only applies to parody and very small selections of an IP for criticism. Even fanfiction is not legally protected.

According to the link that Mika posted though, transformative works have fallen under the category of Fair Use, particularly in several U.S. Supreme Court cases:

The first factor is "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes." To justify the use as fair, one must demonstrate how it either advances knowledge or the progress of the arts through the addition of something new.... A key consideration in recent fair use cases is the extent to which the use is transformative. In the 1994 decision Campbell v. Acuff-Rose Music Inc,[11] the U.S. Supreme Court held that when the purpose of the use is transformative, this makes the first factor more likely to favor fair use.[12] Before the Campbell decision, federal Judge Pierre Leval argued that transformativeness is central to the fair use analysis in his 1990 article, Toward a Fair Use Standard.[9] Blanch v. Koons is another example of a fair use case that focused on transformativeness. In 2006, Jeff Koons used a photograph taken by commercial photographer Andrea Blanch in a collage painting.[13] Koons appropriated a central portion of an advertisement she had been commissioned to shoot for a magazine. Koons prevailed in part because his use was found transformative under the first fair use factor.

If there's no commercial gain, just art for the sake of art -- or education, as some could argue that Pokemon Essentials would be (archiving sprites, teaching programming skills) -- such as would be the case with fanart, fanfic, and even fangames, then by the precedent set in the Supreme Court, it would be Fair Use.

That is false. You can't just steal intellectual property and claim you transformed it. Otherwise putting a Pikachu on a T-shirt and selling it would be fair use. It's not. Fair Use is not a magic wand.

Transformative usually means a whole new medium, or a transformation that makes a statement (parody), or using intellectual property as a new type of building block (sampling a song for a remix). The purpose of the IP will have to change. We went from a game to a game

Look at the examples linked: a parody and a piece of art the court considered "banal." http://www.artistrights.info/blanch-v-koons/ (and a controversial case anyway). 

Pokemon: PETA Version is fair use. Pokemon Essentials, a tool for making near-clones of Nintendo's games, is not. Any court would rule Essentials is not fair use. Anything set for distribution, compared to personal use, is much less likely to be considered fair use.

We should not fool ourselves that we have any legal rights to use Nintendo/Game Freak/TPC intellectual property to make fangames for distribution. That's a dangerous and factually incorrect attitude. 

It's a cultural battle, not a legal one. Fangames and fanfiction received tolerance in the past because it encourages fans to make their fanaticism a bigger part of their life, to go to cons with like minded people, to spend money on IP merchandise. 

If you want to make a change in Nintendo's behavior, my recommendation is to set a good example by admitting the legal standing of fangames, good behavior of never receiving monetary compensation or tainting the brand with bad associations, and writing respectfully to Nintendo and telling them of a time when a fangame encouraged you to get deeper into Pokemon (ie spend money). 


We can grumble about their decision, 'cause it does suck, but don't lie to yourself.