Where is the line between derivative and transformative works

Could it be that the line between a derivative piece of appropriation art and a transformative one (i.e., the line between infringement and fair use) is defined by whether the allegedly infringing work is (1) creative and (2) does not exploit a market created by the original work?

In other words, a commercial work can appropriate the heart (or even the entirety) of a copyrighted work without infringing the copyright if it (1) is a genuinely creative work and (2) does not exploit a market created by the copyrighted work.

The Seinfeld trivia book challenged in Castle Rock Entertainment, Inc. v. Carol Publishing Group, 150 F.3d 132 (2nd Cir. 1998), failed on both counts: (1) it was a collection of "facts" derived from Seinfeld and simply rearranged (much like the telephone directory in Feist) and (2) it was directed at fans of the Seinfeld show, a market the show had created and had therefore had the exclusive right to exploit.