First "50 Shades of Grey" and now "Gabriel's Inferno". Another author gets a seven-figure advance for a book they've converted from Twilight fan fiction. This maybe doesn't feel like it should be legal.
It is, and here's three reasons why.
1. If you get a license, everything is permitted. People don't usually think of this. But when you see an author set a work in another author's universe, for all we know they may have gotten permission. I have no idea whether Renard did or didn't get permission from Stephenie Meyer to sell a book that started out as fan fiction based on Twilight, but if so then this conversation becomes moot. If you get permission, anything is permitted. (It's even the same word!)
2. Just because a book is inspired by another book, even if it's similar to the other book, that doesn't mean it's infringing. Copyright doesn't protect ideas. Copyright protects the written expression of ideas, meaning the actual words. It doesn't protect the ideas behind the words. In fact, there are some ideas that are so stereotypical of the genre that anyone can use them: superheroes having superpowers, beautiful romance heroines with a secret past, the hooker with a heart of gold, etc. These are called scenes à faire, and if you can prove that something you wrote is one of them then it's almost impossible to accuse you of ripping someone else off.
So the idea of vampires loving humans with werewolves as other creatures that love the same humans there's nothing illegal about writing those books. Even if Stephenie Meyer got there first.
3. If you set a new work inside the same IP universe, that might be acceptable too. The idea of an IP universe isn't the written expression of the idea. If you can find a way to set something inside a pre-existing IP universe that doesn't create a derivative work of the things that created that IP universe, you might be able to thread the needle.
In Warner Entertainment v. RDR Books, a US court was required to consider whether it's automatically infringement to create a work that refers to an IP universe without a license. In this case, the author had created a fan fiction encyclopedia of Harry Potter based on his website called the Harry Potter Lexicon. Warner and JK Rowling sued the publisher and the author because they hadn't given a license to make the Lexicon.
In RDR the court held that it's not at all illegal to create a new work that references someone else's IP universe. Quite the opposite. The court held that because the purpose of the Lexicon was to be a Harry Potter encyclopedia, it would be necessary to make repeated reference to the actual Harry Potter books and movies, even using some of the original names and phrasings. This particular Lexicon was infringing because it quoted too much, but after some editing and a prominent notice that it was unauthorized, it went up for sale.
I'm not suggesting finding this middle ground would be easy. In the RDR Books judgment the court held that it will always be a very fact-specific analysis. I'd say it's probably close to impossible outside of the original case: making an encyclopedia of a fictional universe. But this case shows that it's not totally impossible. If you think you can do it, good luck. And hire a good lawyer.
All of that to say, it might seem like it should be illegal to make a million dollars from fan fiction. It's quite possibly not. But is it good for the publishing industry? Tragically, with that question you've reached the edge of what a lawyer can tell you...
Oh No They Didn't! article on Reynard:
Wikipedia definition of scenes à faire:
Warner Entertainment v. RDR Books: