Doe anybody know how copyrights apply to neologisms and words based on Tolkein's languages, that he never specifically wrote?
For example, will I run into trouble if I try to publish a book where I call an elven valley "Redvale" and the Elvish name "Caranand?" (A combination of Sindarin words)
Hey Bekah
This is a slightly contentious topic. As a disclaimer: I am not an expert in legal matters, none of what I say carries any kind of legal authority. I speak only from my experience with the Tolkienian linguistic community.
The contentious part here comes from the following dichotomy: on the one hand, language is generally speaking not something that can be copyrighted (as opposed to specific phrases, terms, or names); on the other hand, the Tolkien Estate's official stance is that Tolkien's Elvish languages are under copyright. I cannot tell you what would happen if a case goes to court, but at least do consider that the Estate likely has a lot more financial power than you.
Neologisms may be a grey(er) area. Who's to say that your Caranand is even Elvish, and not just something that you heard some 4 year old in the park mumble under their breath? Tolkien never specifically wrote this form. Of course it could also be a question of quantity. If your book just has one Elvish-looking name, that's probably far less problematic than if you have a hundred of them, etc.
A more case specific suggestion would be to write this with a k; it's pronounced the same, but (unlike Quenya) Sindarin was never at any point normatively spelled with k.
Now putting all of that aside, I will put my Elvish-nerd hat back on and comment on the name:
Caranand reads as "red-long". For "red-vale", you would need to double the first n: Carannand (note that this also shifts the stress from the 1st syllable to the 2nd).
The final -nd sequence here is an archaism: it can persist in an older name, but in 3rd Age Sindarin we would normally expect Carannan here.
Thanks for your insights on both the legal issues and my incorrect translation! I'll just make sure not to use anything that's a direct copy, and not too many that look too close.