By Justin Fox

(FORTUNE Magazine) – AROUND 1970, A RESIDENT OF LAGUNA Beach, Calif., named Ed Miracle--a Navy veteran and self-taught artist with an eighth-grade education--did a wry pen-and-ink drawing of sailing ships falling off the edge of the earth. He captioned it "I Told You So" and made a few copies to sell. It was a hit, so Miracle redid it as an oil painting and contracted with a printer to make a limited edition. As Miracle tells it, the printer made enough unauthorized extras to fill a panel truck and began peddling them up and down the West Coast. It would not be the last time "I Told You So" was pilfered.

The most recent unauthorized reproduction of Miracle's artwork is more than just a pilfering, though. It is a bizarre parable--involving a famous journalist, a bestselling book, and a respected publisher--that shows how hard it can be for a little guy to keep control of his artistic creation. "It's always been stolen," marvels Miracle's agent, Rose Von Perbandt. "It's just now it's being stolen by reputable people."

Miracle, who is 66 and lives in Longboat Key, Fla., got a call in early April from a friend whose son had seen his painting on the cover of a book at an airport store. The book was New York Times columnist Thomas Friedman's The World Is Flat, which, among many other things, decries intellectual property piracy. But no one had asked Miracle's permission to put his artwork on the book--or paid him for it. To add insult, inside the book jacket was the web address of a firm selling "I Told You So" posters without Miracle's okay.

Agent Von Perbandt immediately got busy, with some success: Friedman's publisher, Farrar Straus & Giroux, yanked the cover and replaced it. But 335,000 copies had already been printed with the Miracle cover, which also adorned the audiobook and remains on the British edition. And Miracle still hasn't gotten a dime.

How did this happen? "This seems like a case of innocent confusion over a period of years leading to the innocent licensing to us of what may turn out to have been unlicensed work," e-mails FSG publisher Jonathan Galassi. "This is all quite sad because both the author and we at FSG love Mr. Miracle's painting and wish we could be using it now."

The longer version, as gleaned from Galassi, Miracle, and legal documents provided by Miracle, is this: In 1991, while living in the United Arab Emirates (a few sultans had become patrons), Miracle granted a California businessman a five-year license to reproduce "I Told You So." In 1993 the man sold the posters he'd made to a California firm called Paradise Cay Publications. Paradise Cay's owners and their lawyer did not return phone calls, but it appears they thought they had acquired the rights to reproduce the artwork. Miracle, who returned to the U.S. in 1997, knew nothing of this. Author Friedman--who declined to comment other than to confirm this account--came across a Paradise Cay "I Told You So" poster at a map store a decade ago, bought it, and hung it in his office. Last year he sent it to FSG to see if they could acquire it for the cover of The World Is Flat. FSG contacted Paradise Cay, which gave permission for $750.

The matter is now in the hands of lawyers and going nowhere. Both FSG and Paradise Cay offered to pay Miracle for his work, and Friedman has said yes to Miracle's request for a joint art show and book signing. But apart from a $2,000 offer from FSG, the deals are contingent on continued use of Miracle's painting. He says he's too frustrated with what's happened to even contemplate that. -- Justin Fox