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The Associated Press March 16, 2011, 5:29PM ET

AP and clothing company settle copyright dispute

The Associated Press and a clothing maker that distributed merchandise based on artist Shepard Fairey's work have settled copyright claims stemming from the use of an AP photograph to create his Barack Obama "HOPE" poster, ending litigation over an iconic image that became a fixture in Obama's 2008 presidential campaign.

The deal announced Wednesday between the AP and Obey Clothing, announced a week before a Manhattan federal trial was to begin, brought a quiet resolution to a dispute that the news agency had said threatened its ability to share in revenue produced through the use of its photographs.

Claims between the news agency and Fairey were settled in January. Fairey sued the AP in 2009, seeking a court declaration that he didn't violate AP's copyrights when he made the Obama image. The AP countersued, saying the uncredited, uncompensated use of its picture violated copyright laws and was a threat to journalism.

Just as the January settlement called for future collaboration with the artist, the AP and Obey Clothing agreed to collaborate on the future sale of apparel using Fairey's graphics based on AP photographs.

Neither side surrendered its view of the law, though the release said Obey Clothing has agreed it will not use another AP photo without obtaining a license from the news agency. Financial terms were not disclosed.

Tom Curley, AP's president and chief executive officer, said the deal will benefit an emergency fund that aids AP staff and families coping with catastrophes.

"This settlement marks the final resolution of the disputes over our rights in the AP's photograph of Barack Obama," Curley said in the joint statement. "While it was a long road with many twists and turns along the way, the AP is proud of the result and will continue to vigorously defend its copyrighted photographs against wholesale copying and commercialization where there is no legitimate basis for asserting fair use."

Don Juncal, president of Obey Clothing, said the company had collaborated with other photographers and artists in the past.

"The Associated Press has an impressive archive of work provided by talented photographers. We look forward to working with those photographers as part of our long-standing relationship with Shepard Fairey to produce and market apparel with the new images that will be created," he said.

The settlement also brought an amicable end to claims the AP brought last week against three retailers who sold T-shirts and other apparel produced by Obey Clothing, the joint release said.

The red, white and blue image in question shows a determined-looking Obama gazing upward, with the caption "HOPE." It was created from an AP picture taken when Obama, then a U.S. senator from Illinois, was at the National Press Club in Washington in 2006. Fairey's lawyers argued that he had altered the photograph enough that he was not required to license it.

In his earlier settlement, Fairey agreed to not use another AP photograph in his work without obtaining a license, and both sides agreed to share profits of posters and merchandise bearing the "HOPE" image. Terms of a financial settlement in that deal were not disclosed, either.

At one point in the litigation, Fairey learned he was under criminal investigation after he said he had submitted false images and deleted other images to conceal that he erred about which AP photo he used as a basis for "HOPE." No charges were ever filed.

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