They're going after Shepard Fairey for his use of an AP picture as a basis for Fairey's "Hope" poster. There's no question where I stand on this--as an artist, I'm firmly on Fairey's side, even though the work I do doesn't generally involve sampling or deriving from someone else's original work. I've already got bad feelings toward the AP ever since they tried to force bloggers to pay for minor excerpts of their articles, but I'd be on Fairey's side regardless, because I think that intellectual property law is so skewed toward corporations that there's a real danger of killing off artistic invention and experimentation.
Most artists are derivative in some form or another, even the avant-garde. The problem with intellectual property law as it stands right now is that it wants to limit derivation--or at the very least, make sure the IP owners get paid for any use, up front, and in many cases, have control over how the IP is used. Sorry, but that's a sure-fire way to see the IP you own become irrelevant--assuming that you're able to defend said IP completely. If you want your IP to spread, getting artists to "steal" it is one of the best tools you can use. You just have to acknowledge that there's the very real chance that someone might use it in a way that makes you cringe. That's the tradeoff.
That's not really the problem with the AP in this case, though. I'm pissed with the AP because they're flat out insulting to artists.
Fairey essentially has engaged in a form of computerized paint by the numbers with The AP's copyrighted image – taking the work in its entirety. The amount and substantiality of plaintiffs' use is unmistakable – it is a wholesale copying of The AP photo.Paint by numbers? He took a photo that ran as part of a minor news story and transformed it into an instantly recognizable icon. He did something that no one at the AP even had an inkling was possible, and that, one could argue, was impossible by the very nature of the AP's mission to report news "objectively." Without Fairey's intervention, no one even remembers that photo--it's just one of millions taken during a Presidential campaign. The AP didn't lose anything when Fairey transformed that photo because without Fairey, there's nothing to lose in the first place.
So jam a sock in it, AP, and stick to news gathering. Leave the art to others.