IANAL (I am not a lawyer): this does not constitute legal advice. (Side note: Is it even necessary, i.e. do lawyers actually say this on the internet? Doesn't everyone assume that any advice you receive over the internet is suspect, and you should consult a professional?)
Paul Edward Nowak has a great thread on the geek related to many of the common misconceptions regarding Intellectual Property.
Yes, art and the specific expression of the rules in rule book are protected by copyright, which protect an original artistic or literary work. If you reword the rules and use your own artwork, you can most likely recreate any game that you like with no legal repercussions from copyright. There are other concerns though, like trademark infringement. Trademarks are there to protect the public from being unable to distinguish one maker/source of a product from another. Trademarks may include fictional names of people or places (Catan, Darth Vader), product (Blokus, Monopoly, Magic: the Gathering) or company names (Apple Inc.). You should avoid copying aspects of a game that might confuse your version of a board game with that of the originator.
Is this typical? That is difficult determine. There have been lawsuits in the past. Anti-Monopoly creator was sued, but eventually Parker Brothers settled out of court, and granted the creator of the game a license to distribute the game. Facebook's Scrabble-like board game creators were sued, but they modified the game enough that the lawsuit was withdrawn.
Rio Grande might be looking the other way because it doesn't see a good positive cost/benefit analysis. In general, developers and publishers would probably send a Cease and Desist letter to the website hosting the alleged infringing content. The website will probably remove the offending content if they are a third party, but afterwards the creator of the infringing content can deny any infringement. Court is costly, and it is difficult to determine on which side the court will settle.
The components of board games that are protected are:
- Art: Is protected by copyright.
- Rules: As written. You cannot copy verbatim any rule book.
- Name (maybe): The name of the game might be a trademark, or a registered trademark. Trademarks are location/industry specific. This is why Apple Inc. (iPad creators) and Apple Records can both have very similar trademark names and icons.
- Terminology (maybe): You probably cannot directly copy fake technical terminology. You definitely cannot have Romulan Disruptors in your spaceship battle game. You probably could have lasers, or photo torpedoes, or other real technology.
- Mechanics (probably not): You cannot patent a game mechanic. Everyone is free to create Roll and Move games (Monopoly, et.al.), or Deck Building games (Dominion clones), Tactical Wargames (Warhammer 40k), etc.
- Mechanical Inventions (maybe, but it is harder than you think): Mechanical inventions in games that are novel and not obvious are able to be patented. They have to be new though. You cannot patent "inventions" that existed before your patent in the public, or that are obvious extensions of prior art (Quarriors! creators could not patent custom die faces on six sided dice, because this invention existed previously and is obvious). WizKids sued Wizards in an attempt to declare Wizards constructible game patent invalid. On this same page you can see other cases where Wizards sues Nintendo (settles).
A software developer should be worried about all these types of infringement. The worst that is likely to happen to you if you are creating a freeware online implementation though is that you will probably be sent a cease and desist letter. If you choose not to fight and remove the infringing work at that point, little if anything will happen to you. If you are charging money, and are earning a profit, then (if the amount of money you have made is considerable) you might be headed to court. While it is possible that you might be liable for up to $150,000, they would have to prove that your reproduction wasn't Fair Use DMCA.
In a civil suit, an infringer may be liable for a copyright owner's actual damages plus any profits made from the infringement. Alternatively, the copyright owner may avoid proving actual damage by electing a statutory damage recovery of up to $30,000 or, where the court determines that the infringement occurred willfully, up to $150,000. The actual amount will be based upon what the court in its discretion considers just. (17 U.S.C. 504)
Violation of copyright law is also considered a federal crime when done willfully with an intent to profit. Criminal penalties include up to ten years imprisonment depending on the nature of the violation. (No Electronic Theft Act, 18 U.S.C. 2319)
