Winning The Battle and the War Against the Postal Service . . . with Little Financial Reward

May 2, 2011 – Blog Post

Forget about collecting statutory damages from the U.S. Postal Service, was the message sent by the U.S. Court of Claims in the case of Frank Gaylord v. United States, here. The U.S. Court of Claims determined Mr. Gaylord is entitled to only $5000 as “Just Compensation” after the U.S. Postal Service infringed his copyright by printing and selling more than thirty million dollars worth of stamps showing Gaylord’s copyrighted work, “The Column,” without his permission.

Liability for copyright infringement having already been established by the Federal Circuit, the U.S. Court of Federal Claims determined that because the most the Postal Service had ever paid for the right to use an image in a stamp was $5000, that was the most Mr. Gaylord would have been paid, had the Postal Service properly requested his permission to use an image of “The Column.” The Court determined that had Mr. Gaylord not agreed to this amount (or less), the Postal Service would have selected a different image for its stamp. But the Postal Service did not ask first, so Mr. Gaylord did not have the opportunity to object!

Despite not seeking permission from Mr. Gaylord, the Postal Service did okay, if you don’t take into account the time and money expended to defend its position.

The Back Story

Frank Gaylord, a World War II veteran, won a contest and was selected as the sculptor to create the figures for the Korean War Veterans Memorial (“KWVM”) monument. From 1990 through 1995, Mr. Gaylord worked on “The Column,” which consisted of nineteen stainless steel statues representing a platoon of foot soldiers in formation. “The Column” was completed and installed as part of the KWVM, which was dedicated on July 27, 1995.

In 1996, John Alli, a Marine Corps veteran and amateur photographer, took a photograph at the KWVM of “The Column” during a snowstorm. The Postal Service paid Mr. Alli $1,500 for the right to use the image in a commemorative stamp. However, the Postal Service did not seek Mr. Gaylord’s permission to show “The Column” on its stamp, nor did Mr. Gaylord consent to this use.

In 2008, in its initial ruling on this case, the U.S. Court of Federal Claims found that Mr. Gaylord owned a valid copyright in “The Column,” and further found that the Postal Service had copied Mr. Gaylord’s work. However, the Court found that the Postal Service made fair use of “The Column” and therefore found it not liable for copyright infringement. This finding of fair use was reversed by the Federal Circuit and the case was remanded to the U.S. Court of Claims for a determination of damages.

With liability already established, the Court was required to determine the appropriate compensation due to Mr. Gaylord because of the infringement of his copyright by the Postal Service. Damages in cases involving copyright infringement by the government are computed under the “Just Compensation” Clause of the Fifth Amendment. As such, the copyright owner is entitled to recover “what the owner has lost, not what the taker has gained.” Leesona v. United States, 599 F.2d 958 (Ct. Cl. 1979)(en banc). The determination of “actual damages” (“what the [copyright] owner has lost”) is determined using the “zone of reasonableness” approach, as outlined in another Court of Claims decision. Steve Altman Photography v. United States, 18 Cl. Ct. 267 (1989).

Under the “zone of reasonableness” approach, the Court determined minimum damages of $1500, the amount paid by the Postal Service to Mr. Alli for the right to use the image in his photograph, and maximum damages of $5000, the greatest value the Postal service had ever paid for the right to incorporate an existing image into a stamp. The Court reasoned that because the Postal Service had never agreed to pay more than $5000 for the use of an image in a stamp, the most the Postal Service would have agreed to pay Mr. Gaylord was $5000. If Mr. Gaylord had refused to accept this royalty, the stamp showing “The Column” would not have been produced. Conversely, unless Mr. Gaylord had agreed to this royalty, he would have earned no royalty at all from the Postal Service. Thus, the Court awarded Mr. Gaylord the maximum damages he could have earned had the Postal Service properly requested his permission .