Is fanfiction copyright infringement?

No, so long as you put a disclaimer at the top giving credit to the creator for the created universe.

Probably not, but it depends. Fair use is determined on a case-by-case basis. This Wikipedia article covers some of the most important issues. Fan fiction is unlikely to get caught up in legal proceedings if its publication is limited to freely accessible internet sites, however, as it is typically other people making money off of copyrighted works that gets the copyright owner into a litigious mood.

That’s not a guarantee, though. You always run some risk when basing your own work on someone else’s. Some authors are completely intolerant toward fan fiction and demand that all such works be taken down. Others could not care less. In either case, they do have legal standing to bring suit if they so desire. Again, the article linked above covers this.

In all likelihood, you would not encounter any problems. Nintendo has not bothered to take action against anyone for fan fiction to date as far as I can discover.

Standard disclaimer: I am not a lawyer. The above is based on seminars I’ve taken on copyright law and discussions with colleagues who have studied and/or practiced copyright law. The information may be out of date or based on a misunderstanding. It is always advisable to speak to a practicing lawyer.

Don’t think so, though you do have to abide by the author’s wishes. Some authors, for instance, have a no-fanfiction policy. Mercedes Lackey is one. (Depending on where it ties in.)

@Nullo Neither an author nor an author’s estate can stop fan fiction that conforms to the fair use laws. See the part about Alice Randall’s The Wind Done Gone in the article I linked above.

@Aethelflaed Similarly, giving credit to the creator of a universe is not enough to protect one from all claims. It will be sufficient to appease most authors, but not most publishing companies.

@SavoirFaire And a competent lawyer could no doubt build a nice bed of coals for you out of the loopholes in “fair use” and “protected elements.”

@Nullo But historically, an author’s wishes have been wholly ineffective in court. A competent lawyer resorts to other means (and still often loses even when expected to win).

@SavoirFaire So then what’s enough to appease publishing companies? A standard disclaimer seems to be “I didn’t invent the characters or universe, I don’t own them, I’m not making any money off them, please don’t sue”.

@Nullo So the real moral of the story is, never read an author who speaks out against fanfic.

Not if you add a disclaimer and don’t try to make money from the story.

Are you serious about Mario though? Or is that just an example? I wonder if anyone has written fanfiction for Duck hunt…or Sonic….or doom?!!? Is there Doom fanfiction…I kicked ass at that game..

After a bit more research, the consensus seems to be that, while there is no definite ruling in the US (but lots of case history), it is essentially legal, because fair use includes “transformative works”, and fanfiction is transformative. However, like all laws, this is not to say that you cannot be found guilty in court of it, depending upon how good their lawyer is (and how crappy yours is). So, probably stay away from writing any fanfic using the creations of an author who have spoken out against fanfic, especially if they tend to rant often and psychotically against it. And don’t profit from any of it.

When you write fan fiction, you are surrendering any profit from it, because the characters are owned by someone else. If you are okay with that, please do.
Is it something raunchy between Mario, Luigi and Princess Mushroom?

There are several factors relating to when something falls under the Fair Use doctrine (taken from here):

1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work.

As determined in Campbell v. Acuff-Rose Music (1994), however, none of these factors is dispositive. That is to say, all four are supposed to be balanced. That a work is reused for commercial purposes does not immediately mean it is not a fair use. In the Campbell case, for instance, it was noted that to say otherwise is to outlaw virtually all commercial parodies. Similarly, you can often use the entirety of a work if it’s nature is such that you can only use all or nothing (e.g., Marcel Duchamp’s L.H.O.O.Q. uses all of Leonardo da Vinci’s Mona Lisa).

It’s a delicate balance, though, which is why transformativity weighs so heavily in most decisions. Transformation requires personal creative work—something typically avoided by people who are being dishonest and trying to get away with something. Not all fan fiction is transformative, but most probably is. Video game fan fiction, especially when the original game has a rather minimal plot, has a particularly strong claim to transformativity.

There are an awful lot of myths in this area, and fan fiction writers are not the only ones who believe them. The list provided by @Aethelflaed—which is very useful for the purpose it was provided—is enlightening. Several of the authors quoted have based their positions on falsehoods or exaggerations. A lot of publishers are also under the impression that commercial use is the main factor (possibly because it is the main factor in whether or not they care).

One thing to take away is that a disclaimer does not get one off the hook. YouTube provides an excellent case study here. Almost all videos that use commercial content have some sort of “no infringement intended” disclaimer. This has not prevented anything from being taken down, however, and the site is littered with videos that no longer have sound thanks to the RIAA.

One advantage of the fact that most fan fiction is published online, though, is that most companies are mollified by simply taking down infringing material (or material they think infringes). When one is willing to do that, further action is rarely taken. Unfortunately, this has led to people issuing removal requests en masse even when a particular use is legal (and host sites typically just bow to the pressure). But again, the fortunate part is that it means one is less likely to actually be sued over fan fiction.

@filmfann Nope. See the case of The Wind Done Gone, in which the very famous characters of someone else were used in a profitable work.

@SavoirFaire The defense correctly said that The Wind Done Gone was a satire, which is exempt from Copyright infringement laws.

@filmfann Exactly my point. Alice Randall did not have to surrender her profits, despite the fact that the characters she used were owned by someone else, because other rules came into play. Thus it is not the case that “when you write fan fiction, you are surrendering any profit from it, because the characters are owned by someone else.” The rules are more complicated than that.

Indeed, merely being labeled “satire” isn’t enough, either. Fair use does not actually cover satire, but rather parody. The difference was crucial in the case of Dr. Seuss Enterprises v. Penguin Books, wherein a commentary upon the O.J. Simpson case that borrowed various copyrighted elements from The Cat in the Hat was held to be outside the realm of fair use privileges. Key to this ruling was that the satirical work was not a commentary upon the work from which it was borrowing, but rather a commentary upon unrelated events.

@SavporFaire Nope. Fan Fiction is not usually satire or parody. The characters are owned by the creator of the original book. You will never see any Harry Potter book in print that wasn’t written by JKR. She has the rights to those characters, and anyone else publishing using those characters would be sued, and wouldn’t profit from those books. Check JKR’s lawsuit against the Harry Potter Lexicon, who planned to produce an encyclopedia of JKR’s world.

@filmfann You seem to have misunderstood the point to which I was responding. You said that using characters owned by someone else is sufficient for surrendering the profits from a work (this is the logical force of saying that fan fiction surrenders profits because it uses someone else’s intellectual property). I pointed out that this was not the case (copyright law allows the use of someone else’s intellectual property in various circumstances). You said that was because there is an exception for some works. I responded that this was exactly my point: using characters owned by someone else is not sufficient for surrendering the profits from a work—there are other factors.

And there are many, many Harry Potter books in print that weren’t written by J.K. Rowling. Not every country has copyright laws.