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Originally Posted by fjtorres
http://class.georgiasouthern.edu/wri...avis/body.html
Parody is:
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A new, copyrightable work based on a previously copyrighted work
to such an extent that the previous work is clearly recognizable
but not taking more from the copyrighted work than is necessary,
that criticizes or comments on, at least in part, the subject matter or style of the previous work, and is not likely to hurt the value of the previous work.
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That last bolded clause is where the definition comes into play in court.
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Most slash fiction falls under that definition. Nobody would mistake it for the original, it has no negative impact on market value, it takes only names and sometimes a few phrases from the original, and it comments on the heteronormative relationship styles (among other things) in most mass-media productions.
A lot of Harry Potter fanfic deals with teen pregnancy and the problematic nature of spells as fix-it tools; those, again, are not easily confused for the original, seem to increase market for the source material, and comment on Rowling's worldbuilding, in which even very immature characters have access to a great deal of power, without the consequences we'd expect.
The growing number of Avengers "OT8" fics (if you don't know, you don't want to), again, aren't mistakeable for authorized stories, don't seem to slow down the market the tiniest bit, and posit what kind of relationships would be likely among a fairly-isolated group, all of whom are both talented and passionate, and all of whom have reasons to ignore society's normal social rules. They both comment on the gaps in the original stories by filling in details, and critique the prejudices of the people displaying those stories by pointing out plausible alternative behaviors for the characters.
"5 Things" fics show what aspects of character or storyline are interesting to fans, and how those topics might be addressed in the original. AU fics show how the characters' personalities would be identifiable with different histories and settings. Crossovers allow the writer to comment on personalities and worldbuilding from different sources through direct side-by-side comparison.
What-happens-next sequels show what the fanfic writer thinks are the most important details of the original and which relationships have what kind of enduring value, and comments on how the characters would grow and change over time. Sequels can also criticize the storyline by showing how unpleasant or implausible the future would be for the characters.
The only way in which fanfic can hurt the original market, is if the original is so popular that it's inspired tremendous amounts of fanfic *and* the original is so artistically bad--or has recently taken a downward turn--that most of the fanfic is of higher quality.
I can't see a TV producer being willing to say in court, "you must ban this fanfic because it's much more entertaining than our new season of epsiodes." Or a comic book company saying, "we fired all the good writers, so you must help us get the fanfic removed from public spots on the internet; if the fans want to read about Batman, they *must* read our comics instead of that well-written stuff."
Any argument that the fanworks affect the market for the original is saying "we produce crap; please kill our competition because we can't convince people to buy it if they're allowed to post that stuff for free."