This case is about the poster “Hope” made by Shepard Fairey using the photo of Obama made by the Associated Press. (AP). The AP claimed that the photo was copyrighted, while Shepard said he used it for Fair Use. In the end, Fairey has agreed not to use any AP photos in his work without first obtaining a license. Both sides will also share rights to make merchandise bearing the “Hope” image.
Fair Use, according to Stanford University, is any copying of copyrighted material done for a limited and “transformative” purpose, such as to comment upon, criticize, or parody a copyrighted work. This means, that Shepard might use the photo and create the poster as a parody or criticism.
I think, still, Shepard should have obtained the license first, before using the photo for his poster.
I may imagine, how this would be a criticism or a parody, but I don’t think it is true.
The designer just used the photo without asking, basically. Is it ethically correct? No.
However, on another hand, this piece of work has become a trend and is being studied in design/art schools nowadays.