Originally Posted by
Ryoga-san
It's considered fanwork and will be downloadable by everyone for free. To consider this illegal would be like saying a fan made drawing of Naruto is illegal. The copyright laws refer to spreading copyrighted products for free (like scanlations) or using the copyrighted name (Naruto) to make a profit. Since this is tributed to Kishimoto's work and credits him for the world (+ is not profitable for me), it would not hold up in court. The only thing I'm sure he might have something against with this project is that it might contain some spoilers for those who haven't followed the series yet. I will also use fanmade art for the finished project (and the current Kishi art is only placeholders for the drafts).
I noticed after I had started with the project that there already is a Naruto d20 RPG system out there and I've taken a look at it. I find it too long and not very structured though so it didn't stop me from continuing with it. First draft of character creation is basically complete.