Moshi Monsters has suffered a setback with the recent injunction that Lady Gaga filled against the parody character Lady Goo Goo. Mind Candy CEO Michael Acton Smith, however, indicates he won’t back down from this or other fights.

“I’m always up for a good battle if anyone else wants to do this,” he said, discussing concerns over another of his parody characters, Dustbin Beaver. “We’re having discussions around that at the moment. But obviously we do need to be a little bit careful, because the high court must be respected when they injunction something.”

“We knew it was a little bit risky, but we took legal advice, and we were more confident that we’d win than not,” he added. “I think a lot of people have been surprised by the judgment. I personally think the law in this area is too strict and there are people looking at it for review at the moment. I think it would have been fine in the U.S. where parody is much more acceptable.”

The judge ruled in Gaga’s favor, saying that there could be confusion between the character and the pop star. “I have a huge amount of respect for IP owners and Lady Gaga and other musicians and what they’ve done, but something that is an obvious parody and that’s creative and enriches and delights a whole new audience I think is more positive,” argued Smith. “And it’s not detracting from her sales or damaging her in my opinion, and so I think it was a bit frustrating. We shall see, who knows where it will all end up ”

Despite this set back, Smith indicates that plans to release an album of Moshi Monsters music and possibly to put on a live tour based on the MMO have merely been delayed, not canceled. “We are doing the album, we don’t know whether we’re going to change… we don’t know quite how we’re going to deal with it,” he admitted.