They were still making money off this, including pouring money from Axanar into other projects.
But really arguing a fair use defense was never gonna' work for them. It's a fan film, it can't be divested from the copyrighted material you drew from unless you completely change the story, characters, designs, and technology.
Fair use defends stuff like using clips for film criticism or educational purposes. They were always going to have a tough time (and they should) saying that something they were profiting off of was fair use.
What were they using to make a profit exactly? I hear this so much (often from Axanar haters, not saying you're one though) but when it comes to citation I hear nothing.
As far as I am aware they created a production company for the Axanar movie (and future fan movies) which was non profit, and they created the website company to deal with merchandise and backer rewards, again non profit as it all donations to the movie and to backers.
They haven't really took much from directly from Trek imo, Soval from Enterprise is the biggest thing, after that comes Garth of Izar, a character that appeared once in TOS. Then general concepts like the Federation, Klingons, Vulcans etc.
The story of the Battle of Axanar is pretty much all original since every source on it throughout the years have depicted wildly different events, from a single 1v1 battle vs a Klingon to all out war with a species called Axanari, Axanar copies none of them afaik. Ship designs are original, other characters are original, emblems and such original.
Aside from changing the names of a few things, mainly characters and species, they could not change anything else and it would have no link to Trek. If they lose I'm hoping this is what they'll do.
