Q: "What legally makes a game a parody."
R: Read the Campbell v. Acuff Rose ruling linked-to below.
Q: "... can I use the real-life names, attributes (characteristics) and real-life events involving celebrities in the game."
R: Read about the "right of publicity" that everyone owns in their name and persona via second link below.
Q: "Can [celebrites] claim that my game is libel?
R: Read up on "defamation" law via the third link below.
And then speak with your own intellectual property attorney about your particular business plan. Good luck.
The above response is general information ONLY and is not legal advice, does not form an attorney-client relationship, and should NOT be relied upon to take or refrain from taking any action. I am not your attorney. You should seek the advice of competent counsel before taking any action related to your inquiry.
As the on point answer by Attorney Ballard suggests, the question is not easily answered with a one size fits all definitive answer. Many factors go into a determination of what constitutes a fair use parody. I too suggest reading on the subject and discussing your business plan with an experienced attorney. A good resource is the screenwriters guild.
This answer does not constitute a legal consultation, or definitive answer, nor does it establish a lawyer client relationship. Each case, controversy, or situation is factually different and requires particularized evaluation.
If you are developing a 'game', you will have to face a number of significant issues, the least of which is copyright. The underlying purpose of the work doesn't lend itself to parody, one of the exceptions to the protections afforded by copyright. Your biggest hurdle, would be the right of publicity for the celebrities. Yes they can sue, as can anyone. Not everyone needs to consult an attorney, but you do. Don't proceed any further without speaking to an attorney who knows this area of law.
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