Editor's note: The Associated Press and the artist who created the Obama "HOPE" image announced Jan. 13, 2011, that they had agreed to settle their copyright-infringement claims against each other and would work together again in projects that use the news agency's pictures.

NEW YORK — The Associated Press countersued an artist yesterday over his famous image of Barack Obama, saying the uncredited, uncompensated use of an AP photo violated copyright laws and signaled a threat to journalism.

The artist, Shepard Fairey, sued the not-for-profit news cooperative last month over his artwork, titled "Obama Hope" and "Obama Progress," arguing that he didn't violate copyright law because he dramatically changed the image.

The artwork, based on an April 2006 picture taken for the AP by Mannie Garcia, was a popular image during the presidential campaign and now hangs in the National Portrait Gallery in Washington.

According to the AP lawsuit filed in federal court in Manhattan, Fairey knowingly "misappropriated The AP's rights in that image." The suit, which also names Fairey's companies, asks the court to award AP the profits made from the image and damages.

"While (Fairey and the companies) have attempted to cloak their actions in the guise of politics and art, there is no doubt that they are profiting handsomely from their misappropriation," the lawsuit states.

Fairey said he looked forward to "upholding the free expression rights at stake here" and disproving the AP's accusations.

"They suggest my purpose in creating the poster was to merchandise it and make money. It wasn't. My entire purpose in creating the poster was to support Obama and help get him elected," the artist said in a statement. He initially made the image available as a poster, donating the proceeds to charity or using them to make more posters, he said.

The red, cream and light-blue image depicts a pensive but determined-looking Obama gazing upward, with the caption "HOPE" or "PROGRESS." It went on to become a familiar sight on buttons, shirts and other objects, garnering Fairey a thank-you letter from Obama and more than $400,000 in profits, according to published reports.

Fairey's lawyers acknowledge the image is derived from Garcia's photograph, made at the National Press Club in Washington while Obama was a senator.

But Fairey's lawsuit claims he didn't violate copyright law because he transformed the picture into a "stunning, abstracted and idealized visual image that creates powerful new meaning and conveys a radically different message."

The AP argues the Los Angeles-based artist's image amounted to "blatant copying" and commercializing of another's work. Fairey piggybacked on the AP picture's "distinctive characteristics," including its composition, light and shadows, the cooperative's lawsuit claims.

The AP contends news organizations need to protect their intellectual-property rights so they can continue providing information, an endeavor financed in part by licensing their material to others.

"This lawsuit is about protecting the content that The Associated Press and its journalists produce every day, with creativity, at great cost, and often at great risk," AP President and CEO Tom Curley said in a statement. "The journalism that AP and other organizations produce is vital to democracy."

The dispute turns partly on the legal concept of fair use, which allows exceptions to copyright law. Courts decide based on factors including how much of the original is used, what the new work is used for and how the new work affects the original.

Copyright and fair-use fights are gaining more attention as digital technology makes it easier to find and use images, songs and other creative content.

The cooperative said it tried to work out a license agreement with Fairey and agreed to donate proceeds from his prior use of the photo to a charitable fund that helps AP staffers who suffer personal losses in natural disasters and conflicts. Fairey cut off negotiations, the AP's lawsuit said.

A street artist known for a rebellious bent, Fairey, 38, pleaded not guilty yesterday to 12 counts of vandalism in Boston. A spokesman for prosecutors said the charges were related to the artist's Obama and "Obey Giant" stickers, posted around the city.

Fairey issued a statement saying he was not involved in posting the stickers in Boston. He noted that his art is widely available online.

Fairey has been arrested numerous times on charges of drawing on buildings and other private property without permission.