If you are a US Citizen the wavier on Fonts gets fuzzy. It is true that the government has mandated FONTS ARE FREE
that is
not correct, but you are close: a
Typeface cannot be copyrighted, but
Fonts can. (As a matter of fact, font files are automatically covered by copyright law, just like a piece of music or art one could create)
Quick google to illustrate the difference:
http://www.tjc.com/copyright/FAQ/CFAQ03.html3.9) Are fonts copyrighted?
First, let's distinguish between a font and a typeface. A typeface is the scheme of letterforms (which is really what you're probably talking about), and the font is the computer file or program (or for that matter, a chunk of metal) which physically embodies the typeface.
A font may be the proper subject of copyright, but the generally accepted rule is that a typeface embodied in the font is not (see Eltra Corp. v. Ringer, 579 F.2d 294, 208 U.S.P.Q. 1 (4th Cir., 1978), and the House of Representatives Report on the Copyright Law Revision, 94-1476, 94th Congress, 2d Session at 55 (1976), reprinted in 1978 U.S. Cong. and Admin. News 5659, 5668).
The Copyright Office position is that letterforms themselves are not copyrightable under U.S. law, and that a typeface cannot be registered, as a typeface. 37 CFR § 202.1(e). However, a font is copyrightable if it adds some level of protectable expression to the typeface, but that protection does not extend to the underlying uncopyrightable typeface itself (see 17 U.S.C. § 102(b)).
In essence, a font will be protectable only if it rises to the level of a computer program. Truetype and other scalable fonts will therefore be protected as computer programs, a particular species of literary works. Bitmapped fonts are not copyrightable, because in the opinion of the Copyright Office, the bitmap does not add the requisite level of originality to satisfy the requirement for copyright.
So, to summarize this point, a typeface is not copyrightable. While a scalable font might be copyrightable as a program, merely copied the uncopyrightable typeface, and creating your own font, either scalable or bitmapped, is probably not an infringement, assuming you did not copy any of the scalable font's code.
Two warnings:
First, even if typefaces can't be copyrighted, they can be patented under existing design patent laws. 35 U.S.C. § 171. Copying a typeface and distributing such a font, while not a violation of copyright, might be an infringement of the patent.
Second, Congress has been considering design protection legislation for many years (for example, the 102nd Congress' H.R. 1790 (102d Cong.) which, if passed, would protect typeface design. In 1998, design protection was added by the Vessel Hull Design Protection Act, part of the Digital Milleneum Copyright Act, Pub. L. No. 105-304 [TEXT; PDF], codified at 17 U.S.C. §§ 1301-1322. As enacted, the protection applies only to the design of a useful article (see section 1301(a)(1)), and "useful article" is restrictively defined in section 1301(b)(2) to cover only the hull of a vessel (i.e., of a boat).
Or for a different, more in-depth analyses see:
http://www.faqs.org/faqs/fonts-faq/part2/To summarize: Anyone can legally copy the look & feel of a typeface, and create their own version of times new roman, arial, superduperdeluxefont, or whatever.
From what I gather you can even capture the output of an existing font (e.g. use a bitmap image containing text in a certain font, to cut & paste for your own printing needs)
But it is NOT legal to simply include a .TTF created by someone else without their permission. The catch is that a .TTF is technically a computer program (it's not just an image file, but contains instructions describing to the computer how to create the typeface) which
can be copyrighted.
In a similar fuzzy fashion, MIDI files are technically considered to be sheet music, not music recordings. They are therefore subject to different rules than, say, an MP3 recording of a performance.