A funny thing happened to the street artist Shepard Fairey on his way to the Institute of Contemporary Art in Boston in early February. Fairey, who gained international renown for his Obama "Hope" poster and was heading to the opening of a major survey of his work at the ICA, was arrested and charged on two outstanding warrants for graffiti in two Boston locations. "People figured we must have planned it," recalls ICA chief curator Nicholas Baume. "It seemed like an amazing publicity opportunity. I told them they were giving us way too much credit."

The 39-year-old Fairey is involved in both the commercial- and fine-art worlds. He has a slick, visually striking graphic aesthetic that mimics historical propaganda forms and applies this to posters and stickers produced in large quantities and sold through his company, Obey Giant. He also owns a design agency, Studio Number One, with such corporate clients as Pepsi and Saks Fifth Avenue. And he creates unique artworks as well, in his Los Angeles studio.

Fairey pleaded not guilty to the February vandalism charges and was released. But beginning in early March, he made a series of court appearances in Boston, disputing further charges for affixing stickers on public and private property. The artist’s attorney, Jeffrey Wiesner, of the Boston firm Stern, Shapiro, Weissberg & Garin, argued that the mass-produced stickers are readily available and so could have been posted by anyone. By late April the court had rejected seven of the charges, citing lack of evidence.

Fairey’s dozen or so street-art-related arrests are not his only involvement with the law. In early February, he filed a preemptive lawsuit against the Associated Press in federal court in Manhattan after the AP demanded payment and a portion of proceeds from the Obama poster. The agency claims it owns the picture Fairey used, which was taken by its freelance photographer Mannie Garcia in 2006. Fairey’s suit asks that a judge declare him protected from copyright-infringement claims because his work qualifies under the doctrine of fair use.

The AP has countersued, alleging that Fairey is reaping profits from copies of its image. Fairey has responded by asserting that the AP itself violated copyright when it used a photograph of the Obama poster in an article announcing the National Portrait Gallery’s acquisition of it.

These imbroglios come at a time when Fairey’s work is gaining not only popularity — attendance for the first two months of his ICA show was double what the museum recorded for the same period a year ago — but a market foothold. His first major New York show at the Jonathan LeVine gallery in 2007 was all but sold out, and the dealer says that at last December’s Scope fair in Miami, collectors bought 38 pieces priced between $1,000 and $25,000. That September, 85 to 90 pieces at Fairey’s show at the White Walls gallery in San Francisco had been snapped up. Fairey could soon join Deitch Projects, several sources say, although Jeffrey Deitch tells Art+Auction that "it’s too early to say."

Fairey has also been building a track record at auction. His pieces primarily appear in day sales and have brought less than $5,000, but lately prices have jumped. His collage Obey Ak-47 brought an artist’s high of £15,600 ($25,500) at the Bonhams urban-art sale in London last October. At the Sotheby’s contemporary day sale in May, one of his mixed-media pieces from 2007 was estimated at $50,000 to $70,000 (results were not available at press time.)

Fairey declined to comment for this article, but on his blog he claims that Garcia’s photo is just "a reference" to which he meant "no disrespect," and adds that the photo "is now more famous and valuable than it ever would have been prior to the creation of my poster."

In fact, New York photography dealer James Danziger has sold more than 50 prints of the Garcia photo in an edition of 200 for $1,200 a pop. "I don’t think it’s fair use not to compensate the photographer in some way," says Danziger. "I respect Shepard as an artist, but as far as the Mannie Garcia situation goes, he is a little disingenuous."

Attorneys who deal in art-copyright issues are watching the AP-Fairey suits closely. "Depending on the outcome, this case could impact standard practices in the art world involving preexisting imagery or impact licensing expectations for photography," says Virginia Rutledge, chair of the Art Law Committee of the New York City Bar Association. "One of the ironies here is that a lot of the art that’s in museums and that has fetched high prices at auction would be illegal under an adverse ruling against Fairey."

Fairey, it seems, is assured a place in history. That place, however, may have less to do with the record crowds drawn to his ica show than with his role in defining the legal status of references and appropriations.

 "Street Hassle" originally appeared in the June 2009 issue of Art+Auction. For a complete list of articles from this issue available on ARTINFO, see Art+Auction's June 2009 Table of Contents.