I saw the link at Rock, Paper, Shotgun (excellent news site, BTW, great for news and laughs assuming you're not all sensitive and stuff).
The story is originally from Second Life notable W. James Au: http://nwn.blogs.com/nwn/2009/04/enforcers-of-dune.html
Now, I tend to agree with the RPS guys. Second Life is grossly overcovered by the mainstream media. If you didn't actually play MMOs or virtual sandbox games, and all you knew about the genre came from Time, Newsweek, and the big major dailies? You would think Second Life represents the future of online games, as opposed to the future of evil genius PR. But this little story is too good to ignore.
Short version: The agents for the Dune property told the guys who lovingly recreated the world in Second Life to take down any Dune-specific references right the hell now, thanks.
Anecdotally, Trident Media has a bit of a reputation in writer circles for being absolute pit bulls when it comes to not allowing their clients' licensing rights to be watered down. Essentially, if you allow people to use your intellectual property, even with the agreement that those others will not derive profit thereby, you are making it harder to defend yourself legally when someone starts using your work in a way you do not care for. Trust me, I mean "pit bill" as a compliment. Defense of author rights in the internet era is an uphill battle, so I salute the foot soldiers.
Anyway, Dune is a great license, or I wouldn't have put it in my dream MMO list. While I feel for the devoted role players who've spent tons of real world time and money to create a virtual Dune, I wouldn't want my client's triple-A license sharing server space with flying cock, either.
Does fanmade content add value to a license? Does it create enough value to offset the very real cost when a potential license holder argues that his exclusive is not worth as much money due to the existence of unlicensed RPG environments? I could argue both sides. As a writer, I tend to side with anyone who wants to hoard as many rights as possible. And as a player, I don't want to get my... leg... sued off because I was inspired enough by a world to spend a few lazy afternoons with a dice bag and a damage table kludging together a module.