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Originally Posted by ApK
If it's true that some fanfic writers are making money off of copyrighted material without permission, then isn't this precisely the sort of thing the community is constantly saying the big companies should do?
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The vast majority of fanfic writers are not making any money at it. A tiny fraction (and I do mean tiny) are making a few dollars here and there--google ads on their website, or sales of physical zines for a bit more than printing costs. Nobody's making serious income at it. Nobody's making income above the level of a once-a-year yard sale.
And not all of that may be infringement. "The Wind Done Gone" was ruled not infringing; "Coming Through the Rye: 60 Years Later" was ruled infringing. There's no hard and fast rule about what use of someone else's literary world without permission is infringing. I tend to believe most fanfic is transformative enough to be non-infringing, even if it were sold. (Which, as I mentioned, it's generally not.)
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Rather than suing for copyright infringement, which seem like it would be a perfectly legitimate course of action, they are recognizing changes and embracing new opportunities.
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AFAIK, there are *no* lawsuits for copyright infringement targeting free fanfiction. I don't think there are any for those tiny pockets of fanfic that are earning a bit of money. There are DMCA takedown requests, and in the past, there have been C&D orders, but no lawsuits filed.
While "license, don't sue" seems like a reasonable approach, it hinges on the concept that most uses would be licenseable; I don't expect this one to allow licenses for the majority of types of fanfic written, even within these few worlds.