[li]It is common practice to modify the characters of a font for custom usage. It is not illegal.[/li]
[li]Letterform designs are not protected under copyright law.[/li]
[li]You can literally trace another designer’s type, recreate the letters in Fontographer, give it another name and sell it. In fact Bitstream has done something like this for a number of its fonts (or did, at least when I was using their fonts back in the 90’s)[/li]
[li]It’s not uncommon these days for font designers to begin with existing fonts and modify them to create “original” designs.[/li][/ul]
**What is illegal is to make copies of any fonts (like the Adobe Type Library) you have on your system and give them to another person to use on their computer. **
Exception 1: There are designers who don’t copyright their fonts. For instance, Chank is a great designer that has a lot of fonts (but not all) that he gives away for free.
Exception 2: Different type publishers have different restrictions regarding giving copies of your fonts to your printer for the production of that particular project. If you have InDesign, a dialog box actually pops up reminding you of this when you want to include fonts as part of its “Package/Collect for Output” feature.
Ask the Graphic Designer