May 14 (Reuters) - A sculptor may recover royalty payments
from the U.S. Postal Service, which used an image of the
artist's Korean War Memorial sculpture on stamps and related
merchandise, a federal appeals court ruled on Monday.
The U.S. Court of Appeals for the Federal Circuit, based in
Washington, D.C., overturned a lower court award of $5,000 to
sculptor Frank Gaylord, finding he was entitled to a larger
share of the $30.2 million in revenues the postal service
allegedly collected on the image.
Gaylord, an 87-year-old sculptor who fought in World War II,
won a government-sponsored contest to build a memorial to Korean
War veterans in 1990. His copyrighted work, consisting of a
platoon of 19 steel soldiers, became the centerpiece of the
Korean War Veterans' Memorial in Washington, D.C. In 1995,
photographer John Alli began photographing the memorial under
various conditions, eventually capturing a ghostly image of the
steel soldiers after a snowstorm.
In 2002, the U.S. Postal Service paid Alli $1,500 to use the
photo in a commemorative line of 37-cent postage stamps, but
failed to request Gaylord's permission. The agency sold 86.8
million stamps and licensed the stamp image to retailers,
reaping alleged revenues over $30 million.
Gaylord sued in 2006 for a piece of the pie, alleging
copyright infringement. Government lawyers argued that Alli's
photograph and its transformation into a stamp constituted fair
use. But the Federal Circuit disagreed, finding the postal
service liable for copyright infringement. It sent the case back
to the lower court to assess damages.
The lower court rejected Gaylord's request for a 10 percent
royalty, plus interest and instead granted Gaylord $5,000 -- the
most the postal service had ever paid to license an image.
Gaylord appealed, and the Federal Circuit overturned that
award on Monday. Instead of only considering what the postal
service would have paid, the court should have determined what
deal Gaylord and the postal service would likely have reached.
Gaylord consistently licensed images of the work for a 10
percent royalty, the court found.
"The trial court must consider all evidence relevant to a
hypothetical negotiation rather than limiting its analysis to
the Postal Service's past licenses for different works," Judge
Kimberly Moore wrote for a unanimous three-judge panel.
The U.S. Postal Service did not immediately respond to a
request for comment; the Justice Department declined to comment.
Heidi Harvey, a lawyer with Fish & Richardson who
represented Gaylord pro bono, said the decision marks the first
time the Federal Circuit both recognized royalty damages as a
remedy available for copyright infringement, and acknowledged a
citizen's rights to claim those damages from the government.
Gaylord is not the only artist who has sued over subsequent
renditions of an original work. French photographer Patrick
Cariou sued Richard Prince in 2009, accusing the collage artist
of lifting images from Cariou's Rastafarian photography. A New
York federal judge ordered all infringing copies of Cariou's
photographs destroyed, a decision currently on appeal before the
In a separate case, the Associated Press sued artist Shepard
Fairey over his use of an AP photo to create the Barack Obama
"Hope" image. That case settled in 2011.
Harvey said Gaylord's case was different from those
examples, not involving a collage or a reimagining of the
"This case is where the postal service took the picture of a
sculpture and put it on a stamp," she said.
The case is Gaylord v. United States, U.S. Court of Appeals
for the Federal Circuit, No. 2011-5097.
For Gaylord: Heidi Harvey and Frank Porcelli of Fish &
For the U.S. Postal Service: Scott Bolden of the Justice
(Reporting By Terry Baynes)
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