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2) "If I don't charge for it, it's not a violation."
False. Whether you charge can affect the damages awarded in court, but that's main difference under the law. It's still a violation if you give it away -- and there can still be serious damages if you hurt the commercial value of the property.
If another company has purchased the rights to produce a commercial mud based on Warhammer, then you could well be damaging the commercial value of the property, by drawing away paying customers - and even if you weren't, as soon as they found out about your mud they'd be forced to take action to protect their trademarks from being weakened or even lost.
Please cite.
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