The Wall Street Journal recently published an article about the "the whole literary eco-system spawned by the series" and briefly touched on the fan fiction.
At least a dozen new or updated Harry Potter-related titles will likely
be published this year, according to Cambridge Information Group Inc.’s
R.R. Bowker. These aren’t the kind of faux Potter fantasy tales that
are posted on the Web, though there are plenty of those. (One site,
harrypotterfanfiction.com, says it holds more than 34,000 stories and
receives in excess of 40 million hits a month.)[…] There are limits. Copyright law will prevent other authors from
offering new titles using Ms. Rowling’s characters and settings unless
they’re obvious parodies. “Boundaries exist,” says David S. Korzenik, a
publishing attorney with the firm Miller Korzenik Sommers LLP.
“Characters can be copyrighted, and settings can be protected,” he
says. “But if you are doing a parody you can go forward with the
understanding that the parody won’t be book eight or nine of the series
but rather is trying to deliver something very different or
transformative.”Most authors don’t challenge amateur authors who write tales about
favorite characters as long as it’s not commercially distributed, he
says. While it’s technically a copyright infringement, “fan fiction” is
usually perceived as a way for fans to enjoy themselves while creating
further interest in the original work. “Nobody views it as a
substitute,” says Mr. Korzenik. Guidebooks and predictions of future
events are protected as well, as long as authors don’t borrow too
heavily from Ms. Rowling’s work.