The legal status of fan made art in America may be tricky due to the vagaries of the United States Copyright Act. Generally, the right to reproduce and display pieces of artwork is controlled by the original author or artist under 17 U.S.C. § 106. However, fan art using settings and characters from a previously created work could be considered a derivative work, which would place control of the copyright with the owner of that original work. Display and distribution of fan art that would be considered a derivative work would be unlawful.
However, American copyright law allows for the production, display and distribution of derivative works if they fall under a fair use exemption, 17 U.S.C. § 107. A court would look at all relevant facts and circumstances to determine whether a particular use qualifies as fair use; a multi-pronged rubric for this decision involves evaluating the amount and substantiality of the original appropriated, the transformative nature of the derivative work, whether the derivative work was done for educational or noncommercial use, and the economic effect that the derivative work imposes on the copyright holder's ability to make and exploit her own derivative works. None of these factors is alone dispositive.
