If that’s how you want to play it, remember that your lawyer will be charging hundreds of dollars per hour for your day in court. And for prep time and for depositions and for filing and photocopying. I hope it’s worth it.
But the other guy’s lawyer is being paid to advocate for his client, not to provide you with free unbiased legal advice. If you want legal advice, you need to hire your own attorney.
That reply is clearly trying to trick you, but if they’re willing to do that, they’d likely be willing to try other stuff to discourage you. Since such a product already exists, they aren’t going to want to make it easy for you to make one to compete with it.
If you were doing it for the love of it, I’d tell you just to make a Fandom site (formerly Wikia). Since nearly every property has one, they’d find it pretty hard from a PR perspective to sue them. Hell, as I suspected, someone has already started one for Far Side cartoons.
The issue with monetizing anything on the internet is that someone happily steal your work and try to make money off of it themselves. Then you’ll have to spend time and possibly money seeking to have them cease and desist. Especially difficult when you’ve already in a roundabout way to cease your creation.
Lawyers are interesting. I replied to her letter saying
She replied (emphasis mine)
Note that I never agreed to anything. And they have nothing available to the public. You would think that they might be interested in talking to me about collecting royalties or a licensing fee, but they just shut it down.
The publisher and Larson make money from selling collections in their books (per their website, all other items, calendars, mugs, etc. are discontinued). If someone is interested in a particular panel, they’re expected to buy the book(s), not search them out on the internet. Their index is to help those who are seeking to produce a licensed product or products with a similar theme.
I suspect the reason there are so many The Far Side panels available on the web is because it’s not worth the expense of sending out DMCA Cease & Desist notices (Google “The Far Side DMCA” for past notices) is because the strip while fondly remembered is no longer a highly profitable venture. Note that I mentioned above that only the books are currently for sale, even the DVDs are no longer available from the publisher.
Ironically, you’ve put yourself on their watch list by trying to do the right thing by contacting them. You may get by if you remain small, but once it becomes popular, any site that does a complete index as you’ve proposed is a prime target for a takedown notice.
As for paying royalties or licensing fees, it’s not only peanuts for them, but it goes contrary to what they want to do, sell complete books. If they thought it was something that would enhance the sales and enjoyment of their books, they would have included them in the publications.
Also, while I don’t have the complete collection books, in those I do have, Larson prides himself on the evolution of his work, particularly in The Prehistory of the Far Side. While we all have our favorites and probably don’t see it, there is a logic and chronology to his works. Especially where an idea in one panel leads to another panel.