In any instance where user-generated content is encouraged, there'll always be a risk that whatever is submitted may be copyrighted material. YouTube is one of the most prominent examples of being a hub where plenty of plagiarized content is submitted simply because users are given free reign over their submissions.
Valve's recently run into this problem with the Steam Workshop, which is a place where the community can submit new content for games that support the Workshop, such as DotA 2 and Portal 2. The community then visits the Workshop, discovers the user-created content, and decides to give its approval (or disapproval.) Generally, this approval/disapproval process manages to flag down materials that violate the Workshop's plagiarism rule.
Unfortunately, the Steam Workshop's strength in the community process is also its flaw. The approval process broke down when a Steam user submitted a mace for DotA 2 from a fantasy MMO called Aion. Rather than flagging the mace down for copyright violation, users overwhelmingly approved it. The item was so popular that it slipped through Valve's filters and became available in the game as a cosmetic item.
Valve caught the problem too late. Plenty of users already had the mace as a part of DotA 2's Sithil Summer Stash. The user who submitted the mace was banned for violating the Workshop's rules and Valve was forced to replace the mace with a different weapon. The developer then put out a blog post pleading for users to abide by the Workshop's rules.
It's a testament of the Steam community that this is really the first issue with copyright on the Workshop since its launch a few months ago. Such is the risk of leaving the entire Workshop process to the community, and it's likely that future incidents will continue to crop up unless Valve changes a few policies.
If this isn't another clue we need to rework copyright law, I don't know what is.
1) Distinctive art assets are considered intellectual property and thus, copyright.
For example, the fireman's axe is NOT distinct, so any game developer can use the art of a fireman's axe in any game. But start with a fireman's axe then, for example, color it black, add a few more spikey bits and draw glowing runic symbols all over it and call it the "Sacred Axe of Malice" and it becomes distinctive enough to warrant copyright.
In this case, that item happened to be Aion's "Marchutan's Blessed Mace".
2) The article fails to mention that "Sithil's Summer Stash", the way to get this mace, was sold on Steam, and the banned modder would have been granted a cut of these sales. In short, Valve unwittingly sold the art asset another company owned because their community approved an art asset they shouldn't have.
Btw, the above info was taken from the more detailed post on The Escapist.
this is NOT a small deal. Valve could have seriously gotten their a-- sued off by the developer and the publisher of Aion over this. just on the mace design alone. now i'm not clear on the facts but it could be worse if the player had actualy lifted the exact model from the other game and converted it to DOTA2 for use. So no this was not a small deal, it's quite big actually, the fact that some amature modders think it's quite ok to sell some one else's design and make money on it is quite disturbing , this is exactly why i stopped creating huge online displays of my student work in 3ds max.