A derivative work is a work based upon one or more pre-existing works. Translations, screenplays based on books, musical arrangements, dramatizations, and fictionalizations, are examples of derivative works. Briefly, any other form in which an original work may be recast, transformed, or adapted can be considered a derivative work. A work consisting of editorial revisions, annotations, elaborations, or other modifications that, when taken as a whole, represent an original work of authorship, is also a "derivative work" (Source: Title 17 U.S.C. Section 101).
Scholars and researchers frequently find themselves in the realm of derivative works. The nature of academia presumes that new intellectual and creative work will be solidly based on the seminal research that is the foundation for the advancement of knowledge and understanding. However, the right to create derivative works is one of the exclusive rights of copyright owners. Any assertion that the creation of a derivative work qualifies as fair use would rely heavily on the transformative qualities of the original work into something new, as well as the purpose of the new work (e.g., if it is to be used in a new way). Note that authoring a new work that merely cites (i.e., makes attribution to) various other works as authority for statements in the new work does not by itself constitute a derivative work.
A thorough four-factor analysis is essential to an assertion of fair use regarding derivative works. The courts have determined what is a derivative work as opposed to a new work (or a transformative use such as parody) only on a case-by-case basis. Authors of a potentially derivative works should seek permission, assert fair use or other exceptions, and/or seek the aid of legal counsel when such questions arise.
The need for accurate and appropriate attribution must also be addressed when working with, or creating, derivative works to avoid the perception of plagiarism.