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RE: The End of Intellectual Property: On Imagination, Artificial Intelligence, and Procedural Generation
The actual reason for quash fan projects is thus:
If you allow one fan to do something, it is legal precedence for another fan to do the same something.
And thus, you cannot allow the first domino. Else, you lose your entire IP.
That is the copyright / patent law.
I think that's a bit of an oversimplification. You don't "lose" your entire IP. What you do lose is some ability to bar fan projects more effectively because you've established precedent by not pursuing your legally-granted right to have exclusive access to your IP.