The city on Tuesday said it will no longer demand a $100 fee from a photographer who took pictures of the iconic "Portland Oregon" neon sign in Old Town after the photographer filed a lawsuit.

A city spokeswoman chalked it up to a "misunderstanding" that the city sent a letter to Jeff Kunkle of Portland demanding a minimum $100 fee because he'd put up photos of the sign for sale on Etsy.com.

The city has owned the sign, at the west end of the Burnside Bridge, since 2010. That's when the city changed the sign's wording from "Made In Oregon" to "Portland Oregon" and soon after trademarked the sign with the state.

The city then enacted a fee ordinance that allowed officials to charge businesses $100 to $20,000 annually for using images of the sign in their movies, TV shows, advertisements or photographs.

Kunkle, owner of Vintage Roadside, had been selling photos of the sign when it read "Made In Oregon" and as it currently reads "Portland Oregon," but months ago removed the "Portland Oregon" sign photos from his Etsy.com page. He'd heard that city officials were ordering photographers who were selling the photos on Etsy.com and at Saturday Market to pay up.

Kunkle continued to sell "Made In Oregon" sign photos -- for $25 to $40 each -- because he believes that the city can't trademark a sign that it didn't own. He also believes that the city wrongfully received a trademark for the "Portland Oregon" sign because the city isn't using the sign to denote goods or services.

He filed a lawsuit asking a Multnomah County Circuit judge to strike down the city's fee ordinance. The Oregonian/OregonLive published a story about Kunkle's quest Monday.

On Tuesday, city spokeswoman Jen Clodius sent an email, reading:

"The City is taking no enforcement action against Vintage Roadside. The lawsuit appears to reflect a misunderstanding of the City's position since the City is not challenging Vintage Roadside's right to use the ("Made In Oregon") sign image in its art and previously offered it a free license to do so. The City's assumption is that once this misunderstanding is cleared up, the lawsuit will be dismissed."

Kunkle, reached by phone Tuesday, said he has not determined how to proceed. He said he will need to talk to his attorney first.

Read Tuesday's story here.

-- Aimee Green

503-294-5119