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Officially, the Korean War Isn't Over, but the Korean War Stamp Litigation is Done

Stamp-300x205.jpgM.A.S.H., the popular television sitcom of the 1970's, was on the air for 12 ½ years, 9 ½ years longer than the actual Korean War (June 1950 to July 1953) which served as the setting for the series. Oddly enough, a battle over the copyrights in a U.S. Postal Service stamp commemorating the Korean War has them both beat for duration as it approaches the two decade mark.

The ongoing copyright fracas arose from a stamp design that was based on a photograph of a sculpture that forms part of the Korean War Memorial located in Washington, D.C. Frank Gaylord is the artist who created the sculpture The Column under contract with the U.S. Government. It depicts a patrol of nineteen weary American soldiers decked out in winter uniforms and trudging through the Korean winter. Gaylord was paid $750,000 to create the sculpture, but, apparently, there was some ambiguity about whether or not he had retained any copyrights in the statutes after they were put on display.

In 1995, the Korean War Memorial was formally dedicated and the following January, a retired Marine named John Alli visited the Memorial and took a series of photographs, one of which depicted the sculpture evocatively cloaked in real snow. The U.S. Postal Service liked the image so much they paid Alli $1,500 for the right to use the photograph as the basis for a 37-cent stamp. Unfortunately, no one at the Postal Service thought to contact Mr. Gaylord about securing any rights he might have in the sculpture as depicted in Alli's photograph and Gaylord eventually filed suit in the Court of Federal Claims for copyright infringement.

In 2008, the Court of Federal Claims ruled in the Postal Service's favor, finding that its use of Alli's photo fell under the doctrine of "fair use" and exempted it from copyright protection. But then in 2010, Gaylord won a reversal in the Court of Appeals for the Federal Circuit when Circuit Judge Kimberly Moore concluded that the commemorative stamp was not a "transformative work," a requirement for a determination of "fair use." The case was returned to the Federal Claims Court and Gaylord was awarded $5,000 in royalties, the highest amount the Postal Service ever had had to pay for an image on a stamp. Unfortunately for the Postal Service, a new record was soon to be set.

On a second appeal, Gaylord again prevailed and the case returned to the lower court in May 2012 and the Court of Federal Claims held that Gaylord's damages should be calculated based on a per-unit royalty of 10% rather than a one-time lump-sum payment. The court reasoned that this was a logical way to tie the amount paid to the actual marketplace success (or failure) of the infringing work. Based on the Postal Service's calculation that it had generated approximately $5,400,000 in sales from use of the image, the trial court awarded Gaylord $540,000 in monetary damages. The appellate court agreed with the trial court and the copyright battle may finally be at an end (even without the offbeat assistance of Hawkeye or Trapper John).

Why It Matters. Damages in many copyright cases are calculated based upon what are known as "statutory damages." Under the provisions of the Copyright Act, an infringed copyright owner can avoid having to prove actual damages if he or she can simply prove infringement and prove registration of the copyright within three months of its first publication. Statutory damages can be as much as $150,000 for willful infringement and there is no need to prove actual damages. But, in the Gaylord case, it was relatively easy to use government records to show how much was derived from sales of stamps and related goods and then apply the court's multiplier to reach an award for damages.

Inexplicably, the Postal Service did not use arguments that the government had acquired all the copyrights to The Column when it first contracted with Gaylord to create the commemorative sculpture. It may be that the lawyers who handled the original deal failed to address the issue of copyrights and future licensing and royalties and there was little for the government's lawyers to use in this case. Or, it may be that the government's lawyers simply missed an argument that could have brought the case to an end before it even started. (Seems like a mistake Major Burns might have made.)

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