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The term Transformative Work is in many ways a formal and legal expression for Fanwork.
The Organization for Transformative Works (parent to this Fanlore Wiki) has this glossary definition:
- Transformative works are creative works about characters or settings created by fans of the original work, rather than by the original creators. Transformative works include but are not limited to fanfiction, real person fiction, fan vids, and graphics. A transformative use is one that, in the words of the U.S. Supreme Court, adds something new, with a further purpose or different character, altering the [source] with new expression, meaning, or message. 
- A story from Voldemort's perspective is transformative, so is a story about a pop star that illustrates something about current attitudes toward celebrity or sexuality. 
While the term 'fanworks' has caught on in some sectors of fandom, other fans often find it confusing or pretentious.
- Current Copyright Legal Literature at the University of Texas, Austin. Seems to be updated frequently, with links to PDFs of the recent articles.
- Copyright @300: Looking Back at The Statute of Anne and Looking Forward to the Challenges of the Future Conference on copyright issues held by the University of California, Berkeley, April 2010. (The "Statute of Anne" was the first modern copyright law, enacted in 1710, named for Queen Anne of Great Britain.)
- R. Anthony Reese "Transformativeness and the Derivative Work Right," (PDF version) 31 The Columbia Journal of Law & the Arts 467 (2008)
- the Supreme Court ruling came in Campbell v. Acuff-Rose Music.
- Organization for Transformative Works glossary accessed 2010-05-27