Here’s Brian’s summary of the decision:
The Harry Potter Lexicon was found infringing on Rowling’s copyright and fair use was denied as a defense.
The Court engaged in a full four factor balancing test from section 107 of the copyright act. The court relies heavily on the harm to a potential market for Rowling own compendium and the Lexicon taking too much from Rowling works. This case criticizes paraphrasing and quoting in a commercial work that does not criticize the original and may set troubling precedence for futuretransformative works.
The fact that Rowling claims to want to publish her own competing companion book to the lexicon and donate the proceeds to charity receives mention from the court.
The court claims that “publication of the Lexicon would also result in harm to the charitable organization … More concretely, publication of the Lexicon would cause irreparable harm to the sales of Rowling’s companion books, all the elements of which are replicated in the Lexicon for a similar purpose. Readers would have no reason to purchase the companion books since the lexicon supersedes their value” (page 64)
Generally the case claims reference guides and companion books about literary works are a critically important part of literature, and that the right to publish them are generally unchallenged. As a general matter authors do not have the right to stop publication of reference guides and companion books about literary works.
This 68 page opinion is well worth reading. Fair use in the case of commercial works is a hotly disputed area of contention, this case is the latest in an ongoing battle to forge legal business models and add competition through transformative works.