Not so long ago, an eminent blawgger almost got himself in trouble by advocating some slash fiction involving destroying another author's character. Fortunately, he came to his senses after legal advice from more than one place. He quoted another law professor as saying:
The fan fiction would use enough of the Moorcock and Hamilton material—enough character attributes and allusions—to constitute "copying" for copyright purposes (even if the only things that they literally copy are the names).
The more I think about this problem, the more I think the right conclusion was reached for the wrong reason(s). Or at least neglecting what should be the dominant reason(s). I'm picking on the Perfesser just because he's so good-natured about the whole thing—and because his specific request would make a fabulous exam question (don't think I haven't kept a copy… and any student who is perspicacious enough to find this blawg entry probably deserves the slight advantage it would give him/her).
In any event, let's start with a couple of definitions. "Fan Fiction" is fiction written by fans (recalling that the word "fan" is an elision of "fanatic" is not out of place!) and set in the universe of their fanaticism. Some of these stories are mere "continuations" or "prequels" or whatever based very closely indeed upon the object of their desires, such as a story of Lord Greystoke's journey to Africa as a boy set just before the first Tarzan novel, or a story about Jabba the Hutt's successful attempt to cut himself out of the belly of that nasty beast on Tatooine and the vengeance he wreaks upon the entire Hutt family. Then there is the "Mary Sue" story and its (almost incestuously) close relatives, which give the writer an avatar with a central place in the story; all of those teenaged (and not so teenaged) girls who wrote themselves in as Captain Kirk's love interest know exactly what I'm talking about. We can't forget slash fiction, either; "traditionally," this involves explicit sexual relations, often of dubious biological possibility, between characters who are not otherwise "involved." One of the most notorious examples is a line of "Spock/McCoy" stories extending back into the 1960s; I suspect that there are three or four sociology dissertations lurking in just that line of stories! Of course, there are other varieties, too; but these are by far the most common.
Copyright concerns the right to control duplication of both exact original expression and derivative works based on previously existing exact original expression. It does not involve "ideas" per se. California law has a variety of "idea protection" particularly relevant to the entertainment industry, but it is based on common law principles better understood as analogous to unjust enrichment and breach of contract than to copyright. The leading case, and progenitor, is still Desny v. Wilder, although the case report is rather too sterile to really expose what is going on. If you're not already familiar with the way movies "work," I recommend reading Pierce O'Donnell's Fatal Subtraction. In any event, some things are so short or minimal that they cannot be copyrighted. Titles, for example, are explicitly excluded from copyright. Similarly, so would be character names; and invented place names; and other single characteristics.
The problem, at least in copyright law, is "allusions." A series of badly reasoned cases under the 1909 Act continues to dominate thinking. Many of them reached the "right" result despite the poor reasoning; but a lacuna in federal law may have contributed to the tortured reasoning that has made Tarzan, Sam Spade, and H.R. Puf'n'stuf dominant, in their inconsistent way, in "character copyrights." Although some of these violations clearly rise to the level of copyright infringement—for example, lifting an entire speech by a character—and leaving aside any other copyright defenses, we're instead left with a struggle under the fair use defense and the problems with parody. Hint: There is another legal theory, one that was essentially undeveloped during most of the tenure of the 1909 Act, that is a better fit for "improper allusions to a third party's work." But you'll have to wait for the next entry; unless, that is, you've been reading all along and can guess.