Will These Retailers Suffer For Art?

The Associated Press seems to have an unusual interpretation of "hope." By all appearances, it involves suing everyone the AP can find over the artistic alteration and use of a photo of Barack Obama during the 2008 presidential campaign. One might think the AP would appreciate a work of art that firmly established its own relevance in an increasingly difficult landscape for old-school media, but hey. Apparently, lawsuits are much more satisfying.

The AP has sued Urban Outfitters (Nasdaq: URBN  ) , Nordstrom (NYSE: JWN  ) , and Zumiez (Nasdaq: ZUMZ  ) for selling T-shirts emblazoned with artist Shepard Fairey's "HOPE" piece, which utilized a 2006 AP photo of Obama.

The AP seeks an undisclosed amount of damages from the retailers. It previously sued artist Fairey directly, but the two parties settled in January.

The AP's continued litigation includes its contention that commercial sale of such photos without credit or compensation "devalues" the work of journalists, and somehow "undermines the AP's ability to cover the news." (Don't ask me how that's supposed to work.)

To me, the AP's charge toward the courtroom looks like the stumbling of a dying dinosaur. Having your image become iconic isn't exactly a terrible fate, and would the picture have become so widely seen without Fairey's alterations?

Legal action is always a bit ominous for companies' shareholders, since it could result in material (and profit-pinching) financial repercussions. These retailers' shareholders might want to look on the bright side, though. There are worse, more potentially devastating lawsuits to contemplate in the retail realm.

Case in point: American Apparel (NYSE: APP  ) , which has been struggling financially for quite some time now, also faces a new $250 million lawsuit alleging sexual harassment by founder and CEO Dov Charney. That's in addition to lawsuits and investigations regarding its use of immigrant labor, potential wage violations, and federal allegations of possible fraudulent accounting. If all these allegations and claims turn out to be true, we will have found a retailer that wholeheartedly deserves to lose its shirt in court -- and a stock in which investors have every right to give up hope.

In comparison, Urban Outfitters, Nordstrom, and Zumiez shareholders can take some comfort. Being sued over art may not be such a bad thing after all.