Many things surrounding MUGEN have always existed in a sort of legal wasteland. We've all seen countless DMCA strikes or cease and desist orders from companies like Nintendo, who see potential threats in emulators or fan games based on Mario Bros., Metroid, or their many other IPs.
MUGEN games managed to dodge this fate (for the most part), despite the battles between characters from all sorts of different franchises being a big part of the appeal. However, the most recent strike comes from a pretty unexpected direction.
Interplay lawyer has sent a C&D letter to Basara-kun, a major MUGEN creator and the developer behind Clayfighter: Infinite Clayfare.