Interesting Fan Fiction Promotion Event

I saw this interesting promotion on Book Binge this morning.  Linda Wisdom, author of 50 Ways to Hex Your Lover, and the October 1 release, Hex Appeal, and her publisher Sourcebooks, Inc. is offering a prize package for the best fan fiction entry surrounding Wisdom's books.  You can go to Book Binge for the details of the contest.  I am thrilled that there are authors that are embracing fan fiction but I worry about whether this is embracing it too closely.

Unless the fans are required to sign some kind of waiver when entering the contest, what is to prevent one of them from pursuing a copyright claim if Wisdom's subsequent books have any plot points that remotely relate to the fan ficcers' work?  I don't want to detour authors and publishers from encouraging fan fiction but neither do I want such a fun publicity attempt to end badly either. 

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