Originally Posted by sr71plt
Apples and oranges. That's not fiction. I'm not aware of that case or of how/why it would apply to written fiction.
In brief: 2 Live Crew released a rap parody cover of "Pretty Woman". Acuff-Rose (holders of Orbison's copyrights) sued 2LC and their record company. The district court ruled that as parody, it was fair use under 17 U.S.C. 107 (the same law we've been discussing here).
The Court of Appeals reversed that decision, ruling that it failed to qualify as 'fair use' because it was a commercial work, it had taken too much from the original, and it was harmful to the market for the original. But the US Supreme Court reversed again, finding that commercial parody could constitute fair use.
If I was trying to interpret § 107 for myself, based solely on the wording of the legislation, I'd come to the same conclusion as you. To me, the wording certainly makes it look
like it was intended solely for research and similar uses, and based on that I'd have assumed that fiction doesn't qualify for fair-use protections.
But the findings of the US Supreme Court and district court make it clear that fair-use is NOT restricted to "research" - whatever the 2LC version may be, research it ain't. (Skimming the decision, I think they're interpreting "comment" or "criticism" to encompass parody.)
With that interpretation shot down, I don't see where we can conclude that parody fiction - say, something like "Bored of the Rings" - would be ineligible.
Non-parody fanfic might have a lot more difficulty pleading fair use. (OTOH, depending on how it's handled, it might not need to; not all elements of a work are covered by copyright in the first place.)