Oh, I was not speaking of published works. I can draw Gandalf, I can write Lord of the Rings fan-fic, I can run a D&D game using Tolkien's characters and setting. Any ownership of the characters and ideas does not restrict anyone from that.Legally, there is ownership. D&D was unable to make "Hobbit" a D&D species, for example. But it seems D&D was able to use "Halfling" as a species, and it being deemed sufficiently "transformative", or at least sufficiently part of the public domain.
Likewise, parodies are a kind of transformation and viewed as legal.