You appear to be reading more into what I'm saying, which is probably not your fault. It's a short article.
The article says several times that 'names' - single words - are copyright protected.
Not really. If someone were to create an adventure that take a lot of material from, for example, the Eberron campaign setting, that would be a derivative work if it had any level of detail. That wouldn't be permitted under Copyright law. It's not that the word is copyrightable, but rather the context in which it's used. For a 3PP publication to be meaningful, however, that context would always be present, raising the issue of copyright infringement. As this is not clear, I will edit the article accordingly.
It would mean for instance that book titles were copyright protected and thus no two books could have the same title.
This is a purely academic point, but no, it wouldn't even in the context of what I said. "Player's Handbook" is functional, thus outside the scope of copyright. I also make constant references to a minimum requirement of originality for those materials that otherwise are copyrightable. I don't define 'minimum requirement of originality' because it's outside the scope of the article. For the record, the Copyright Office expressly states that it won't approve copyright applications for the titles of works.
And if it were copyright protected, he and I would be breaching that copyright simply by writing 'Sly Flourish'.
Transformative use would allow this, and my use of the term over and over again suggests very strongly that I feel my use of that phrase was justified. However, transformative uses aside, with respect to power names generally (not "Sly Flourish" specifically), I say,
Whether or not the name of the power has enough creativity or originality to justify copyright is questionable, but the flavor text is certainly copyrightable for almost all powers, unless that text is as simple as, “I will crush you.”
Emphasis added. I also refer to them as, "arguably copoyrightable." I don't give the typical power name much credit for copyrightability.
I can't see any basis where the words "Sly Flourish" could be protected by copyright yet the description of the power is not.
I also can't see any basis where the words "Sly Flourish" are copyrightable, but I can see longer, more creative power names, in theory, rising to the level of copyrightable works, and I make this quite clear.
For a 3PP character builder (the only place where this issue is really relevant*
), in the interest of playing it safe, I would advise people not to use power names at all. If WotC believes that certain power names are protected, and considering how much WotC has invested in the DDI, I wouldn't risk incurring a lawsuit from them, which is expensive even if you wind up winning. (See any of my other articles in the Protection from Chaos series for numbers.)
Of course, a premise of the article is that this "playing it safe" has gone too far, resulting in people thinking they must use the GSL to publish 4e material. All I've done here is 1) stated generally why that isn't true, and 2) given people a starting point for the process of making their business decision. As always, a 3PP should present their specific text/software to their own attorney before making a decision.
Thanks for your critique. There is an obvious ambiguity in what I've said that is relevant to the topic, so I'll edit the article. However, I want to make note of the fact that it's unfair to hold an internet article to the standard you appear to be creating. Only a treatise can plug all holes, but articles like this are quite useful for people. You shouldn't discourage them by raising complexities irrelevant to the subject.
I say that the issue of power names is really relevant only with respect to a 3PP character builder because where else would someone realistically publish an existing WotC power? If a 3PP created its own sourcebook, it would probably create new powers. Otherwise, it's unlikely it would sell any copies. I can imagine some master compendiums where 3PPs might do that, but otherwise the material is likely to be original. A 3PP CB, though, would have the purpose of reproducing existing material, so the issue would almost certainly arise there.