Legal Scenario: Slytherin!Rowling vs. the Fanfic Author

[Caius Marcius <coriolan@worldnet.att.net>]

Here's a hypothetical scenario I was pondering the other day 
involving the legal status of fanfic vs. the original author's 
creations. I'll use JKR and the Harry Potter series merely to better 
illustrate the situation I have in mind. (I don't mean at all to 
suggest that the real JKR would stoop to the type of behavior I 
outline below)

Let's suppose that in some alternate, "bearded-Spock" universe that 
an author I'll designate as Slytherin!Rowling has a huge success with 
the first four volumes of her Harry Potter series. However, (unlike 
the real-life JKR), Slytherin!Rowling finds writing to be an 
increasing laborious chore, and decides that she would rather devote 
her hours to the lavish life style that her royalties have made 
possible rather than continue  to invest the months and years of 
effort that would be required to complete the series. 

Slytherin!Rowling then becomes acquainted with the phenomenon of 
fanfic, and hatches a snaky scheme worthy of Gilderoy Lockhart 
himself. She plagiarizes the best parts from two or three high-
quality full length novelizations of Year Five, with only minor 
changes in wording and releases it on May 21, 2003 (hey, this is an 
alternate universe) under the title Harry Potter and the Order of the 
Phoenix. The alternate-OoP has no acknowledgement that was largely 
derived from fanfic written by other writers. The book is once again 
a huge success with fans, 99.99% of whom are unfamiliar with the 
original fanfic works.

Neville L., an avid and skilled fanfic writer, is shocked to discover 
that whole chapters of his work were incorporated into Order of the 
Phoenix, with only minor rewording. Neville gets several e-mails from 
his friends & readers who also note the resemblance – they are all 
sure that Neville must have collaborated with JKR, and are anxious to 
know how Neville met her. Unsure how to respond, Neville contacts a 
lawyer well versed in copyright law. 

If he had written an original work of fiction, Neville would 
obviously have grounds to bring charges of plagiarism against 
Sytherin!Rowling.  But since the characters were all her creations, 
Neville is concerned that he might be facing plagiarism charges 
himself if he tries to collect damages in court. 

How would the lawyer respond? Does fanfic have any kind of copyright 
protection vis-à-vis the original author? Could the original author 
legally "borrow" from fanfic inspired by her writings, without 
permission or acknowledgement? 

    - CMC