If you think the post office is slow, try the court system. Back in 2013, Michael made a post about the faux Lady Liberty’s first run in with this ordeal. Robert Davidson, the plaintiff in this case and the sculptor of the allegedly “sexier” Lady Liberty” statue that sits in front of the New York- New York Hotel & Casino Las Vegas, originally claimed that the U.S. Postal Service printed a photo of the statue, without his permission, on billions of Forever Stamps.

It was as simple as a photographer taking a photo of the statue and posting it to Getty Images without Davidson’s permission. Getty Images, as it does, licensed the photo to the U.S. Postal Service for a fee of $1,500. With this license, USPS went ahead and printed 4-billion copies of forever stamps with the image on it in 2010. Apparently, even after being made aware of the fact that the image on the stamp was Davidson’s work in 2011, the U.S. Postal Service continued to print merchandise and stamps with the image thereon. It noted that the stamp was a “different treatment of this icon that has been on 23 different stamps.” Davidson wasn’t happy about this, as proven by the fact that the case finally went to trial last year.

When we left off, the court was gearing up to decide the question of the amount of damages Davidson is entitled to for the infringement.

Davidson’s entire argument was based on the fact that his version of Lady Liberty is more “fresh-faced,” “sultry,” and even “sexier.” The U.S. Postal Service’s attorneys attempted to argue that Davidson’s work was too similar to the original statue in New York Harbor to notice any differences or claim copyright, but it couldn’t deny that it made over $2.1 billion in sales for the stamp alone.

Interestingly, the opinion reported that the USPS tends to operate at a loss, with costs exceeding revenue each year since 2006. Regardless, the opinion also notes that USPS’s annual revenues have exceeded $60 billion each year since 2008.
Fortunately for Davidson, his argument succeeded. On June 29, 2018, Judge Bruggink of the United States Court of Federal Claims determined that the Lady Liberty replica was an original work and that Davidson was entitled to over $3 million in damages, plus interest.

While the original Statue of Liberty was Davidson’s guide, he explained, it could not be perfectly replicated. Additionally, his intent was not to replicate the original statue. The decision reports that Davidson explained his process, stating that “I just thought that this needed a little more modern, a little more contemporary face, definitely more feminine, just something that I thought was more appropriate for Las Vegas.”

The court first considered whether Davidson’s statue was entitled to copyright protection in the first place. Citing the influential U.S. Supreme Court case of Feist Publications Inc. v. Rural Telephone Service Company, the court noted that only “some minimal degree of creativity” is required for a work to be original. The court looked to Davidson’s intent and compared the two faces to determine that they are unmistakably different and that the work is original.

Secondly, the court considered whether the USPS’s use could fall under the fair use doctrine. Unfortunately for the Postal Service, however, the obvious commercial use of Davidson’s work by the USPS was enough to rule out fair use. Specifically, after evaluation of all four fair use factors, the court stated that “[t]he Postal Service’s use of the image on its ‘ship of the line’ or workhorse stamp, printing billions of copies and selling them to the public as part of a business enterprise—whether for use to send mail or to be retained in collections—so overwhelmingly favors a finding of infringement that no fair use can be found.”

Finally, the court got to the question of damages.

When considering damages for copyright infringement, Federal law states that it should award “reasonable and entire compensation as damages for such infringement.” So, you may be wondering… What did the court do to get to a number over $3 million?

First, the court looked to the USPS’s licensing practices, specifically how it acquires the right to use images on stamps and when they sell the right to use images of stamps. Specifically, it analyzed what the USPS pays for art and what it demands to license the art it creates.

Secondly, the court analyzed expert testimony from business valuation experts concerning what the value of a hypothetical license would have been, had the USPS obtained one. Interestingly, all of the experts had different evaluations. One expert stated that the license should have generated a royalty rate of 1.5% for the stamps used to send mail and a 5% rate for the stamps redeemed and not sent as postage. Another expert stated that the hypothetical license should be worth no more than $10,000, but this was based on the fact that Davidson had never made commercial use of his artwork before this. Finally, the third expert conducted a survey about the retention rates and resell value for postage and stamps.

After taking in all of this information (in a much more verbose manner than this blog post, believe it or not), the court determined that the most appropriate measure of damages was a mixed license, which consisted of a flat fee for the stamps used to send mail ($5,000) and a 5% running royalty for the retained stamps and products. The court did some pretty impressive math here and ended up determining that there were 4,948,761,166 Lady Liberty stamps sold and the total amount collected from those sales was $2,190,414,155. A 5% royalty fee was taken after a breakage and retention rate was applied against that number, resulting in a sum of $3,548, 470.95 (which would be added to a 5% royalty to the products sold as well as the $5,000 flat rate license).

As with every case, this one teaches a lesson: even if you’re the U.S. Postal Service, you can’t get away with stealing someone’s art. At least, not without ending up with a hefty bill.