Yeah. Marvel chose to give Sim a legal warning not to use the character again. He was pretty ticked off about it.
But hey, how many billion OTHER characters were blatant parodies/swipes of other Marvel/DC characters used in CEREBUS? The Cockroach (Batman), Captain Cockroach (Captain America and Bucky), Neal Adams Deadman, Moon Roach (Moon Knight), Lord Julius (Groucho Marx), Elrod (Foghorn Leghorn), Bran Mac Muffin (Bran Mac Morn), Swoon (Sandman), Swamp Thing, Man Thing, Red Sonja, Ghita, Professor Charles X Claremont, Clint Eastwood's film The Beguiled, on and on. And that's not even a complete list of swipes from the first 50 issues or so!
The parodies didn't begin with Wolveroach, and they didn't end with him. As I recall, Marvel's beef was with the prominence that Wolveroach was given on CEREBUS covers (issues 53-56, parodying the first Claremont/Miller/ Rubinstein 4-issue 1982 miniseries), where they felt (or at least argued) that Sim's character was so much like Wolverine that a reader could mistakenly buy an issue of CEREBUS mistaking it for a Marvel WOLVERINE comic book.
I can see Marvel wanting to protect their characters, but even a prominent alternate-publisher like CEREBUS had such a small print run that even at its peak was no threat whatsoever to Marvel's sales. Perhaps it was to warn Sim, or perhaps it was to warn many other publishers not to follow Sim's lead.
But then a few years later, Jim Lee, McFarlane, Liefeld, etc., left Marvel and began publishing blatant swipes of Marvel characters, with no price paid, or any legal threat that I'm aware of. Despite that Image Comics was a far greater threat to Marvel's sales.
