U2 v. Negativland

"The facts" re U2 v. Negativland:

August 20, 1991: SST Records releases a CD single by Negativland called "U2", a tape-collage parody of U2's "I Still Haven't Found What I'm Looking For" featuring sampled and scrambled portions of the U2 song itself and a found tape of radio personality Casey Kasem losing his cool. As part of the joke, the CD packaging features the title--the letter "U" and the numeral "2"--largely and prominently with the attribution "Negativland" in much smaller letters below it.

October 5, 1991: two weeks later, a federal judge issues a temporary restraining order at the behest of Island Records and Warner-Chappell Music. "Preferring retreat to total annihilation," Negativland and SST immediately capitulate to every demand. These demands are:

• Everyone who received a copy of the record--reviewers, record stores, radio stations, etc.--must be notified to return it. If they fail to comply, they may be subject to penalties "which may include imprisonment and fines". Once returned, the records will be forwarded to Island for destruction.
• All of SST's on-hand stock of the record--in vinyl, cassette, and CD--is to be delivered to Island, where it will be destroyed.
• All mechanical parts used to prepare and manufacture the record are to be delivered to Island, presumably also for destruction. This includes "all tapes, stampers, molds, lacquers and other parts used in the manufacturing" and "all artwork, labels, packaging, promotional, marketing, and advertising or similar material."
• Negativland's copyrights in the recordings themselves are assigned to Island and Warner-Chappell. Negativland no longer own what they have created.
• Negativland and SST must pay $25,000 and half the wholesale proceeds from the copies of the record that were sold and not returned. Estimated cost to Negativland is $70,000--more than they have made in their 14 years of existence.

From Wikipedia, more of interest on the entire incident:

In June, 1992, R. U. Sirius, publisher of the magazine Mondo 2000 came up with an interesting idea. Publicists from U2 had contacted him regarding the possibility of interviewing Dave Evans (aka "The Edge") hoping to promote U2's impending multi-million dollar Zoo TV Tour, which featured found sounds and live sampling from mass media outlets (things for which Negativland had been known for some time). Sirius, unbeknownst to Edge, decided to have his friends Joyce and Hosler of Negativland conduct the interview. Joyce and Hosler, fresh from Island's lawsuit, peppered the Edge with questions regarding his ideas about the use of sampling in their new tour, and the legality of using copyrighted material without permission. Midway through the interview, Joyce and Hosler revealed their identities as members of Negativland. An embarrassed Edge reported that U2 were bothered by the sledgehammer legal approach Island Records took in their lawsuit, and furthermore that much of the legal wrangling took place without U2's knowledge: "by the time we [U2] realized what was going on it was kinda too late, and we actually did approach the record company on your [Negativland's] behalf and said, 'Look, c'mon, this is just, this is very heavy...'" Island Records reported to Negativland that U2 never authorized samples of their material; Evans response was, "that's complete bollocks, there's like, there's at least six records out there that are direct samples from our stuff."

The "U2" single (along with other related material) was re-released in 2001 on a "bootleg" album entitled These Guys Are from England and Who Gives a Shit, released on "Seelard Records" (a parody of Negativland's record label Seeland Records). It is thought likely that Negativland themselves were responsible for the re-release, and that U2 gave their blessing; although the Negativland website refers to this release as a bootleg, it is available from major retailers like Best Buy, Amazon, and Tower Records, as well as Negativland's own mail-order business.

Negativland are interested in intellectual property rights, and argue that their use of U2's and others' material falls under the fair use clause. In 1995, they released a book, with accompanying CD, called Fair Use: The Story of the Letter U and the Numeral 2, about the whole U2 incident (from Island Records first suing Negativland for the release to Negativland gaining back control of their work four years later). The book ends with a large appendix of essays about fair use and copyright by Negativland and others, telling the story with newspaper clippings, court papers, faxes, press releases and other documents arranged in chronological order. An unfortunate side effect of the Negativland-Island lawsuit was another one brought on between Negativland and SST, which served to sever all remaining ties the two had. To get back at Negativland (while wryly circumventing their name), Ginn later released the Negativ(e)land: Live on Tour album on SST.

Here is Negativland's interview with The Edge.