Nirvana loved "Smells Like Queer Spirit" by Pansy Division, they considered it a tribute to their pro-acceptance politics, which it apparently was in part. Kurt Cobain said in interviews that he considered it a flattering parody. The two bands had friends in common, one of whom is a longtime acquaintence of mine. It seems probable the the PD members knew very well in advance that there wouldn't be any trouble. Anyway, as cooler mentioned, Nirvana could have taken action if they'd wanted to, but they didn't want to ... context was understood and appreciated. I don't know anything about the Bloodhound Gang / Cure situation, but sometimes artists choose not to pursue the legal route because of the headaches and financial and time costs involved. Maybe that's what happened there. Anyway, you've got some very wrongheaded ideas about IP and copyright. Do some self-education on the subjects, as others have suggested and enabled with links. Nobody is blowing anything out of proportion. Don't let false notions lead to a situation similar to your most recently posted render. :-)