I'd like to say one thing to everyone here saying that Copyright can't be 'defended'. Yes. It can.
The art industry is a very gray and loosely regulated area(which sucks for us artists most of the time); but what most people are misinformed or don't know about; is that Art can be legally defended if you plagiarize and publicly claim it as your own or sell the piece for money.
There is a misconception that you can't sue or have legal rights If you post something on the internet or publicly- That also isn't true. Every artist is protected by copyright.
The literal only barrier is whether or not the infringement is bad enough that you are willing to pay thousands of dollars legal fees to defend yourself.
What happens, is that the Law will not sue or penalize every single person on the internet that Traces, reposts your work or sells t-shirts. And
most artists will not pursue legal action against every person that traces, reposts their work or sells t-shirts either- But thats not because they CAN'T LEGALLY do it.
But really because theres way too many people on the internet; you can't sue everyone for small infractions that cost more money in legal fees than its worth.
However; the most common way for an artist or company to pull off successful legal action for art- is through plagiarism via companies or other artists who steal work.
If a company sells a piece of art that's too close to the original and claims it as their own and makes money; for an artist with enough money- that is an easy lawsuit. For an artist without money- Not so easy.
But it's a lot easier to sue another artist for stealing your work; if they steal a design and you have proof that the original is yours; you've got it. And if they were selling the designs for money or pitched them to companies- you are entitled in many cases to a settlement.
Yuumei(a famous deviant artist) is a great example of this. A girl did something similar that gaia did, but slightly worse. A girl stole Yuumei's concept, changed the design a little bit, same pose and changed the hair and kept the poem on the piece, renamed it and colored it different- and boom! She submitted it to an art contest where she won a fancy scholarship to a good school and prize money.
Heres the article(warning: artistic Nudity and Gore)
Long story short- Yummei eventually got through to the contest people; and the girls prizes were completely revoked and the prize money confiscated. Which as an artist, is about as bad as being taken to court and being sued. That girl is basically blacklisted from the industry forever- So yummei didn't end up taking her to court. The punishment she got was bad enough already and the girl didn't end up getting any money so taking her to court would have been both overkill and of no benefit. Yuumei just let her go after that. And that is one of many examples.
In summary; if the DDLC gaia item is too close to Monika within the law(and looking at the promo image; it very well probably is); then YES. The creator can sue. The question is really if he wants to endure thousands of dollars of legal fees to defend his copyright, for a game he put out for free(and hasn't really made all that much money off of) or not. That's literally the only thing.
Gaia has literally only gotten away with most indie reference/japanese anime items because they either know that the copyright holders won't bother suing, or the changes they've made have been sufficient enough for the law to allow it. But if Gaia keeps pushing their luck like this; eventually they will tread on the wrong persons shoes and end up in a big suit which might end with the closure of this website.
Doki Doki Literature club is not an 'Idea'. Which people in here are using as an argument. Once something is recorded, posted, drawn, written or taken a photo of- it becomes a 'tangible medium'.
Doki Doki Lititure club is a 'Tangible medium'. Meaning, it's protected by copyright and can be legally defended as a property by the copyright holder.
The staff have to start being more careful. This is one thing I can't defend them for. If they are going to release reference items, they need to do it with the same amount of respect they've shown to Undertale.