Where does the law stand if I based my game on New York but replaced many private businesses in the area (like Mcdonalds, Starbucks, etc) with fake ones? Is it legal to have national landmarks (statue of liberty) in my game?

Depends on the city. Some cities have super weird regulations. With Paris, for instance, you cannot represent the Eiffel Tower in anything other than pristine form without special permission. It's also hard to say how enforceable this stuff is; we cared when I worked at a big publisher...

Retain a lawyer and have them dig for you.

-me

Well I can't really afford a lawyer, is there any information regarding the use of cities like New York or San Francisco online?

Maybe there's stuff about New York. GTA IV is apparently closer to the real New York City. I've never been there, so I have no idea how close it is to the game, but they have the statue of liberty in it. She's holding a coffee tho, IIRC.

It depends.

Distinctive landmarks are protected. Distinctive layouts of the city may be protected. A model that is very roughly based on zones of the city is probably not an issue. If you have a model of NYC that is fairly accurate but omit some landmarks, it might be an issue. If you use distinctive landmarks without permission, it is definitely an issue.

You need to talk with a lawyer who can answer the details.

If you cannot afford a lawyer, you should not be in business.

Iconic buildings and art are usually covered by copyright. Movies have gotten in trouble for shooting on location getting permission from the building owners but not getting permission from the artist who did the sculpture out front of the building (evidently they retain copyright on their sculptures). Basically If it makes the place unique or identifiable going parody or non-use are the safest routes.

There were a couple of games set in scaled-down recreations of London; some of the buildings were "generic", others actually looked like the buildings. There was roaming taxi-driver sub-game in one of them so we used it to explore what they'd done with the city.

Generally, even where they'd modelled specific buildings, anything "IP" sensitive had gone. For example the building that used to contain the "Murder 1" bookshop on Charing X Rd is pretty distinctive -- it's got brick pillars and stuff. So the building is in the game, but the shopfronts are all generic ones which say "Travel Agent" and "BANK" and so on. My friend's flat is in there, but again, the bar on the groundfloor has been replaced by "Travel Agent". The building where I used to live was *in* the game but not actually reachable (it's just off the map edge) so I don't know what they did about the motorbike shop at the front of the courtyard.

So the answer is yes, it's possibly doable. However, you might want to think about the complications of doing this -- there's a LOT of geometry in there to have to model...

What about the city's name in general? What if all copyright laws are followed in regards to landmarks or distinctive buildings, combined with the GTA parody approach, could I still use the "New York" name?