PayPal does not have access to IP's as it is a monetary exchange service.
This literature is legalese that protects things like their forums, their website layout, and everything associated with and posted to PayPal's web domain now that they are no longer an affiliate of E-Bay.
Unless if you actually post your art and stories to PayPal's forums, there is nothing they can assert. IP still belongs to the owners until a transfer of sale is made, even when PayPal is used to make the sale. This operates under the same laws that keep credit card companies from owning shit you buy at Wal-Mart until the credit "transfers".
Please pass this on, as I am seeing pretty much widespread panic on the Internet over this, and there is absolutely no need for it."