I love fan creation and believe it should be enshrined properly in fair use doctrine, but god damn, I cannot imagine being stupid enough to make fan work of an IP and then sue the IP holder because I think they took my idea. Holy fuck.
Stupid prizes are a predictable but negative response.
Like mouthing off to the police and then getting a beating - a predictable and stupid prize. But that doesn't mean we should endorse and accept that as an appropriate response from our institutions.
One could argue you couldn't even really get rid of them entirely if you wanted. No matter how understanding and accommodating you make a given system, it would doubtlessly remain possible to act so entirely devoid of reason that you could inflict upon yourself consequences that most people would say are not fit to your offenses, but nevertheless happen because of the aforementioned acts.
For example, if you were to under-pay your taxes by $20 and simply refused any and all compliance with the resulting process, the IRS will eventually go about spending several thousand dollars of various employee's and legal resources to collect that $20 plus any and all interest, fees, etc. that resulted. Most people would be correct I feel to say that expending all those resources and all that time and such to collect a measly $20 is stupid, especially if the balance ended up being many hundreds if not thousands of dollars by the time the fines and interest were tabulated. But this is a classic play-stupid-games situation: you refused to pay the $20 for whatever odd reason, and the system in turn acts how it would for anyone else refusing to pay taxes because building a special system for weirdos who only underpay by $20 would also be a really huge waste of time and resources.
Ultimately though, at least insofar as the current system exists and operates, fan creations are not protected and in fact seem to be legally unprotected. In the odd event this person was correct, that one of the writers for Rings of Power adapted their work without compensation... well... it isn't entirely theirs, by definition, even if you have fan creations enshrined as fair use. There would probably have to be some legislation covering intellectual property that's derived from other intellectual property, and how that ownership then is calculated.
Certainly, expecting the Tolkien estate and a company the size of Amazon to have to pay royalties to a fan writer is just, and I'm sorry, but it's fucking absurd.
It would be nice
This is totally wrong. We have standards of behaviour and ethics throughout the legal system, and you could lose in court because:
1. You act in a manner that is arbitrary and capricious
2. You show contempt of the court
3. You act in bad faith
4. The contract Shocks the conscience
5. You have mens rea, or guilty mind