The Wall Street Journal reports: The National Security Agency and the Department of Homeland Security acknowledged in a settlement made public Tuesday that they were wrong to ban a leading custom-merchandise retailer from selling t-shirts, mugs, and posters that poked fun at the agencies.

The agreement puts to rest a First Amendment lawsuit against the federal government brought last year by a t-shirt designer, Dan McCall, who hawked merchandise on Zazzle.com that parodied the official seal of the NSA with jokes referencing the spy program disclosures. Another design imprinted on mugs featured a look-alike Homeland Security logo for a “Department of Homeland Stupidity.”

Mr. McCall’s lawsuit, which Law Blog wrote about earlier, came in response to cease-and-desist letters that the NSA and Homeland Security sent to Zazzle in 2011, ordering the retailer to remove the parody products from its site or face legal action.