|See also:||Legal Analysis, Intellectual Property, Copyright, DMCA, Cease & Desist, Creative Commons, Disclaimer|
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The kinds of uses that may fall under Fair Use are: commentary, criticism, parody, journalism, research, teaching or scholarship. Disagreements over Fair Use often end up resolved in court cases.  (See Legal Analysis for more details on specific cases.)
There are four factors that are weighed when Fair Use cases are before the courts:
- the purpose and character of your use
- the nature of the copyrighted work
- the amount and substantiality of the portion taken, and
- the effect of the use upon the potential market. 
The first factor covers the issue of whether the work has been transformed into something new or merely copied. Many people believe that most, if not all, fanworks are Fair Use exceptions to copyright because of their transformative nature.
An Early Mention of Fair Use in a Media Zine
Until recently, fans generally didn't discuss Fair Use.
In issue #17, (May 1995), another fan replies:There is actually a provision of copyright law that makes K/S zines legal so long as they are non-profit. It's called "fair use." Fair use was intended for such things as teachers xeroxing articles for the classroom, but it applies to any non-profit use of copyrighted material. Fair use doesn't exist for our benefit. It exists for the benefit of giant corporations such as Paramount that don't want to spend money on litigation if there is no profit involved. Without profit, pursuing copyright violators simply isn't worth their while, Lucasfilms found this out the hard way when they considered prosecuting STAR WARS slash, and then dropped the notion like a hot light saber. 
From issue #18 (June 1995), a very small excerpt from a much, much longer, very technical letter:I personally can't see how the fair use provisions apply to publishing K/S at all (Anybody out there want to make a case for it. I'm listening. Obscure interpretations of the copyright law are a professional interest of mine.) The damages provision (which was designed mostly to protect libraries making copies for interlibrary loan) is a disincentive for Paramount to come after us, but it doesn't make what we're doing legal. While I don't think Paramount could actually stop slash, they could, given sufficient motivation, drive us so far underground that LA Times article will look like an alternate reality.
I don't think [L F] confused the "fair use" doctrine with an altogether different rule pertaining to damages. To recap, you stated a couple of issues ago that you believe K/S fan fiction is "illegal," i.e. copyright infringement; Linda responded that non-profit fanzines are a "fair use" rather than an infringement. I agree with Linda. Under the "fair use" doctrine as interpreted by the courts, noncommercial uses of copyrighted materials, especially those that do not copy the work literally but transform it in a new creative work, generally have been held to be non-infringing. Indeed, in Sony Corp. of America v. Universal dry Studios, 464 U.S. 417, 451, 456 (1984), the U.S. Supreme Court held explicitly that a noncommercial use is "presumptively" fair. The presumption of fairness means that the court cannot find infringement unless the copyright owner can prove that "the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work. The "fair use" doctrine is not limited to uses of copyrighted material for educational, scientific, or research purposes; many uses for pure entertainment have been found "fair" by the courts. Each case must be judged individually according to the four statutory "fair use" factors... If Paramount were to sue a K/S fanzine publisher, I believe the fundamental issue to be tried would be the effect of K/S zines on the market for licensed Star Trek products such as commercially-published novels and new TV series and films. If I were representing the zine publisher (I tend to approach legal issues as a litigator, since that's what I do in mundane life), I would try to prove that: a) In almost thirty years of unrestricted, unregulated fanzine publishing. Star Trek fanzines have never commanded a market of more than a few thousand purchasers. For K/S zines, the figures are much lower. The tiny market for K/S fan fiction means that the copyright owner will never license it even if for some unlikely reason Paramount wanted to get into the slash business.
For further reading see:
- Legal Fictions: Copyright, Fan Fiction, and a New Common Law and other articles linked at that page.
- Copyright 101: A Brief Introduction to Copyright for Fan Fiction Authors (1998)
- Signal to Noise, A Practical Guide to Fair Use Doctrine.
- Stanford University Libraries, Copyright and Fair Use, accessed May 7, 2010
- Wikipedia:Fair Use
- Stanford University Libraries, B. Measuring Fair Use: The Four Factors, accessed May 7, 2010
- Why does the OTW believe that transformative works are legal?, accessed May 7, 2010
- There are no cases of LucasFilm focusing on slash fanworks that fans know of. However, for issues regarding explicit het ficiton, see Open Letter to Star Wars Zine Publishers by Maureen Garrett