tal , 4 hours ago (edited 1 hour ago)

It sounds like both parties made derivative works.

The initial design was from Bungie, then someone else made a derivative work from it. Bungie didn’t go after them for it.

Then some artist at Bungie made a derivative work from that work, and the fan artist complained.

Technically, neither party can legally go out and make and distribute derivative works. Probably both were in the wrong there.

The fact that Bungie left the fan art alone, didn’t send lawyers after them initially, doesn’t mean that Bungie has rights to go make and distribute a work based on the fan art.

So, from a purely-legal standpoint, they’ve probably both got grounds for a copyright complaint against the other; Bungie could theoretically have the fan art distribution blocked and the fan artist could block distribution of Bungie’s derived pistol (though not the original, pure-Bungie pistol).