I don't know much about fan fiction. I understand that fans like to write their own stories involving the characters, and there's no reason a writer of fan fiction can't be a good writer. Just because an author is using characters already created by someone else doesn't mean they can't come up with a good story.
According to my research, The Mortal Instruments book series began as Harry Potter fan fiction. According to reviews on amazon.com, the author Cassandra Clare wrote a story about Draco Malfoy then just turned that story into The Mortal Instruments.
I don't know how true that is, and I don't care. What I know is that this movie sucks. It's derivative of every fantasy movie over the last several years, and it even rips off Star Wars.
It's about a girl named Clary (Lily Collins) who thinks she's a normal teenager, then finds out she has magical powers. She comes from a line of shadowhunters - people who fight demons. She meets a shadowhunter named Jace (Jamie Campbell Bower) who explains the whole backstory to her. The story starts out like any other fantasy story. There has to be something the bad guys want (The Mortal Cup) that only she can lead them to, so they are after her. The bad guys have to have a leader (Valentine) who used to be one of the good guys until he went to the dark side.
This movie rips off so many better movies (and sucky movies like Twilight) that it's hard to know where to begin. Besides the overall formula being so familiar, you've got vampires and werewolves, just like Twilight. At least these vampires are actually scary vampires and not just sulky teenagers who sparkle in the sunlight. Also like Twilight, there are two love interests for Clary. The Mortal Cup is a bit reminiscent of the Deathly Hallows from Harry Potter, and there is a point where Valentine is revealed to be Clary's father (spoiler alert - if you really care).
To give the movie a little credit, there are some good jokes, and once in a while a character says something that I was wishing they would say moments before. At times the movie almost seems like it's aware of how bad and hokey it is. But then it goes back to taking itself way too seriously. The most ridiculous part was when we learn that Johann Sebastian Bach was a shadowhunter, and his compositions are actually mathematical formulas to get demons to reveal themselves. The entire theater was howling with laughter during this sequence.
I could forgive this movie ripping off so many other movies if it were good, but it's not. It's very by the numbers and boring. The effects were good, and some of the creatures were kind of cool. I liked the dog that turned into a demon, and there was also a sequence with a little girl playing in the street who turned out to be a demon. That was nice and creepy. But mostly the movie is just really, really dumb.