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It's a fine line, but then again, sometimes without fanfic, people would have no clue about the original author.
So long as no money is being made from using other peoples creations, it's just harmless fun from which others can get lots of pleasure from, and possibly discover a new (to them) author they are willing to pay money to discover the reason for the fan fic it was written after.
Some have made a big deal out of it and it has come back to bite them in the butt with the backlash.
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