To be clear: if you use copyrighted images or trademarks relating to The Matrix, you are lawsuit-bait. It does not matter that you're not selling it; websites have received cease-and-desist orders for simply putting copyrighted images onto their sites.

Some common misconceptions:
"If I don't charge for it, it's not a violation."
False. Whether you charge can affect the damages awarded in court, but that's main difference under the law. It's still a violation if you give it away -- and there can still be serious damages if you hurt the commercial value of the property. There is an exception for personal copying of music, which is not a violation, though courts seem to have said that doesn't include widescale anonymous personal copying as Napster. If the work has no commercial value, the violation is mostly technical and is unlikely to result in legal action. Fair use determinations do sometimes depend on the involvement of money.

"My posting was just fair use!"
The "fair use" exemption to (U.S.) copyright law was created to allow things such as commentary, parody, news reporting, research and education about copyrighted works without the permission of the author. That's important so that copyright law doesn't block your freedom to express your own works -- only the ability to express other people's. Intent, and damage to the commercial value of the work are important considerations. Are you reproducing an article from the New York Times because you needed to in order to criticise the quality of the New York Times, or because you couldn't find time to write your own story, or didn't want your readers to have to register at the New York Times web site? The first is probably fair use, the others probably aren't.

Fair use is usually a short excerpt and almost always attributed. (One should not use more of the work than is necessary to make the commentary.) It should not harm the commercial value of the work -- in the sense of people no longer needing to buy it (which is another reason why reproduction of the entire work is a problem.)

"If I make up my own stories, but base them on another work, my new work belongs to me."
False. U.S. Copyright law is quite explicit that the making of what are called "derivative works" -- works based or derived from another copyrighted work -- is the exclusive province of the owner of the original work. This is true even though the making of these new works is a highly creative process. If you write a story using settings or characters from somebody else's work, you need that author's permission.
Yes, that means almost all "fan fiction" is arguably a copyright violation. If you want to write a story about Jim Kirk and Mr. Spock, you need Paramount's permission, plain and simple. Now, as it turns out, many, but not all holders of popular copyrights turn a blind eye to "fan fiction" or even subtly encourage it because it helps them. Make no mistake, however, that it is entirely up to them whether to do that.

There is a major exception -- criticism and parody. The fair use provision says that if you want to make fun of something like Star Trek, you don't need their permission to include Mr. Spock. This is not a loophole; you can't just take a non-parody and claim it is one on a technicality. The way "fair use" works is you get sued for copyright infringement, and you admit you did copy, but that your copying was a fair use. A subjective judgment on, among other things, your goals, is then made.

Yoshi is correct, although you'd be treading on thin ice. You're better off using concepts (which cannot be copyrighted or trademarked) from The Matrix and using completely different names. Since you're not planning on selling it you're on safer ground; should you choose to profit from it, the license holders for the Matrix could litigate on the grounds that there are too many points of similarity to their product and still prove infringement.

[edited by - EricTrickster on November 20, 2003 1:43:42 PM]