Postal Service Stamp Infringes Copyright – Not Fair Use

Several months ago, I wrote that the “fair use” defense to copyright infringement often is poorly understood. The U.S. Postal Service illustrates this point. A recent court decision held that a postage stamp infringed the copyrights in certain sculptures and was not fair use thereof.

Frank Gaylord created, and registered the copyrights for, soldier sculptures in formation constituting part of the Korean War Veterans Memorial.

John Alli took a photo of the Memorial. The Postal Service paid Alli $1,500 for the right to use that photo for a 37-cent stamp commemorating the 50th anniversary of the armistice of the Korean War. Alli told the Postal Service that it would need permission from the owner of the copyright in the sculptures; the Postal Service did not seek such permission.

The Postal Service received over $17 million from the sale of nearly 48 million stamps. In addition, it sold retail goods such as commemorative panels and framed art featuring images of the stamp. Gaylord sued the U.S. government, alleging copyright infringement.

The government claimed that the fair use defense applied. The U.S. Court of Appeals for the Federal Circuit disagreed.

In deciding whether the fair use defense is available, the court must consider four factors.

1. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.
2. The nature of the copyrighted work.
3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole.
4. The effect of the use upon the potential market for or value of the copyrighted work.

The court found, under the first factor, that the Postal Service’s use was commercial and that the stamp and the sculptures had the same purpose and character, i.e., to honor Korean War soldiers. (In legalese, the stamp was not “transformative”.) This weighed against fair use.

The second factor (nature of the work) also weighed against fair use, because the sculptures were expressive and creative.

The third factor (substantiality), too, weighed against fair use, because 14 of the 19 soldiers appear on the stamp.

The fourth factor was the only one in the defendant’s favor, because the stamp did not affect the market for Gaylord’s sculptures of any derivative works of those sculptures.

The court held, on balance, that the stamp was not fair use.

Lesson #1: The fair use defense is highly fact-specific. Furthermore, copyright protections can extend to media quite different form the medium in which a work was originally created. One should be especially careful if a substantial portion of a work is copied.

Lesson #2: The government alleged that the sculptures constituted a work made for hire. However, it provided no facts to support that allegation, Gaylord having been an independent contractor rather than an employee. If a client wants to own the copyright in a work made by an independent contractor, the client needs to include an assignment of copyrights in a written agreement with the contractor. See Independent Contractors: How to Assign Copyrights.

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October 1, 2013 update: According to USA Today, on remand the Federal Court of Claims awarded Gaylord $684,844, most of which was attributable to a 10% royalty on stamps sold to collectors.

Photo credits: Frank Gaylord v. United States

Dana H. Shultz, Attorney at Law  +1 510 547-0545  dana [at] danashultz [dot] com
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