I'd say wittycomics violated the Microsoft End User Licence Agreement in the areas in bold below.
1.2 License Grant for Media Elements. The Software may include certain photographs, clip art, shapes, animations, sounds, music and video clips that are identified in the Software for your use (together "Media Elements"). You may copy and modify the Media Elements, and license, display and distribute them, along with your modifications as part of your software products and services, including your web sites, but you are not licensed to do any of the following:
* You may not sell, license or distribute copies of the Media Elements by themselves or as part of any collection, product or service if the primary value of the product or service is in the Media Elements.
* You may not grant customers of your product or service any rights to license or distribute the Media Elements.
* You may not license or distribute any of the Media Elements that include representations of identifiable individuals, governments, logos, initials, emblems, trademarks, or entities for any commercial purposes or to express or imply any endorsement or association with any product, service, entity, or activity.
* You may not create obscene or scandalous works, as defined by federal law at the time the work is created, using the Media Elements.
In addition, you must (a) indemnify and defend Microsoft from and against any claims or lawsuits, including attorneys' fees that arise from or result from the licensing, use or distribution of Media Elements as modified by you, and (b) include a valid copyright notice on your products and services that include the Media Elements.
