Fairey and his lawyers have been arguing fair use — and that seems to be how the media and copyright watchdogs have been treating the dispute, but there's something more interesting, subtle, and insidious going on that no one has touched on. The Fairey poster is not just the photograph with some Photoshop effects applied to it — which would have certainly brought up all manner of fair use issues. It's been demonstrated that the poster image was traced from the photo (no doubt by hand), but that would actually make it an original creation, even when using something else as a jumping off point. Here's the catch: the photo was not a work of art carefully composed in a studio, it was taken at a public event where anyone standing in roughly the same spot could have taken the exact same shot.
Apparently, what the AP is arguing is that no one has the right to make a artistic representation of anything depicted in a photograph to which they hold the rights. This is not a threat to fair use. It's a threat to free speech, and the willful creation of a memory hole."