Do you remember that case about the famous Obama "Hope" poster? Where the AP said Shepard Fairey had appropriated one of their photos without permission? And Fairey was taking it to court and it was expected to be an important decision about fair use? (I wrote up the details here if you don't remember.)
Well Fairey's case just collapsed, with the revelation that he lied about the photo he used as source material. Apparently he had claimed the illustration was based on a photo of Obama sitting next to George Clooney, which was cropped down to just show Obama's head. In fact the illustration was based on another photo, a portrait-style head shot of Obama that required very little cropping.
Here's the original photo side-by-side with the illustration:


And here's the image Fairey claimed was the source material:

Why does this matter? Well, one of the legal factors in determining whether an unauthorized appropriation is fair use, is "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." If Fairey had used the Clooney photo as his source material, then he could make the argument that the portion used was fairly small, in relation to the copyrighted work as a whole. I'm not sure that would be a slam dunk: the Copyright Office says that even a tiny amount of copied material can be too much if it makes up the essential part of either the original work, or the derivative work. (I will look for an exact quote on that later but I just got up.) But it would be a good argument to make.
Unfortunately, whether Fairey has a case on the merits looks pretty irrelevant now. Because he just admitted that he lied about which photo he used in his source material, and falsified evidence to support his lie. He said that it was an honest mistake. Which sounds ludicrous, but you know, when I was working on the collages for the Tarot deck, I was surprised by how easy it was to lose track of source material. I kept detailed records which I still have because it was obvious I wasn't going to remember where this or that image came from. Now, I don't think I would make a mistake in a court filing about the source material which made me one of the most famous artists alive. Then again, I've never been in a situation remotely like that -- either being made famous by my art or going to court over it -- so who knows.
Whether truly an honest error or a convenient "mistake," the real problem came when Fairey deleted production files from his computer and created new, fake production files that appeared to support the false claim. His lawyers say he lied to them too, and they are withdrawing from the case.
Fairey says he's going to continue to court, where I expect he will get his ass handed to him. I thought before that there were strong arguments on both sides, and I was really interested in seeing how the case turned out. But I can't see Fairey winning after pulling a stunt like that. As Kevin said in a comment to my last post on the subject, judges tend to look disfavorably on parties who falsify evidence.
So, Shepard Fairey, who portrayed himself as some kind of copyright freedom fighter, and said he was "fighting the AP to protect the rights of all artists," was actually a liar who destroyed an important fair use case. Nice going, jerk.