I'm sure that you've all heard about Nintendo's lawyers sending a cease-and-desist letter (LINK NOT WORK SAFE) to the Suicide Girls website because a SG fanpage that was hosted there listed two Nintendo games as favorites. It's because of stuff like this that I believe that in any major company, the legal and marketing teams should work hand in hand.
I hear some of you out there screaming, "Why? Legal and marketing are like matter and antimatter. You combine the two, and you get a major explosion." Let me explain.
Whenever legal decides that legal action may be required, whether it be an automated action letter like this one seems to be or a full-blown pooch-screw lawsuit like Sun/Microsoft suit, legal should have to talk to marketing first to determine the level of fallout that would result from the lawsuit.
All lawsuits have some amount of negative value associated with them. Whether it be goodwill, sales or customers, when you decide to sue someone, you will lose something. Marketing's first job is not to determine how to spin the legal action. Marketing's first job should be to determine if the loss will exceed the estimated recovery.
In this case, Nintendo has lost goodwill, sales and customers. Not only that, but they lost them during the beginning of the critical holiday sales period. A quick call to a semi-intelligent PR/Marketing employee could have resulted in this never happening.
Now, to be clear, this wasn't like someone drawing Mario tying up Princess Peach in bondage gear and having nonconsensual hanky-panky while Toad, Bowser and Luigi have a 3-way "around-the-world" in the background. This was a fan, albeit a fan of both Nintendo and soft-core nudity, stating that he enjoyed two classic video game series. While negative publicity may be better than no publicity at all, you want negative as in, "You shouldn't play this because it's evil and will rot your brain," rather than, "You shouldn't play this because if you say you like it in the wrong place, you'll get your asses sued off."