Gaylord v. United States (Gaylord III)

Frank Gaylord (plaintiff) created The Column, a group of 19 stainless-steel sculptures representing a platoon of soldiers. The Column appears prominently at the Korean War Veterans’ Memorial (KWVM) in Washington, D.C. In 2002, the United States (defendant), through the United States Postal Service (USPS), issued a 37-cent stamp (the KWVM stamp) commemorating the fiftieth anniversary of the armistice ending the Korean War. The KWVM stamp featured a photograph of The Column, but the USPS never asked for Gaylord’s permission to depict The Column. The USPS sold not only KWVM stamps featuring the unauthorized depiction but also retail goods featuring images of the KWVM stamp. The USPS earned $5.4 million from the sale of sold but unused KWVM stamps, i.e., stamps purchased by collectors; $17,831.93 in licensing revenue collected from third parties that had licensed rights to the stamp image at an 8 percent royalty on their sales of retail goods; and $330,919.49 from the USPS’s direct sales of retail goods. In 2006, Gaylord sued the United States for copyright infringement in the United States Court of Federal Claims. In the first appeal from that proceeding (Gaylord I), the United States Court of Appeals for the Federal Circuit held the United States liable for infringement, identifying three classes of infringing items: (1) stamps customers had purchased to send mail, (2) unused stamps purchased by collectors, and (3) retail goods. The Federal Circuit in Gaylord I remanded the case back to the Court of Federal Claims for a determination of damages. On remand, the Court of Federal Claims limited Gaylord’s damages to a one-time $5,000 royalty. Gaylord appealed again, and in its second decision in this case (Gaylord II), the Federal Circuit reversed the Court of Federal Claims for not considering all evidence relevant to a hypothetical arms-length negotiation between the parties for a copyright license, including evidence presented by Gaylord. In the remanded proceeding, Gaylord elected to not pursue damages from sales of stamps used by customers to send mail due to difficulty of proof, leaving the Court of Federal Claims and the parties to focus only on categories (2) and (3). Regarding category (2), the Court of Federal Claims observed that the USPS had decided to print 86 million KWVM stamps, exceeding its average of 50–60 million per run of commemorative stamps. Regarding both of those categories, the Court of Federal Claims received evidence that Gaylord had consistently licensed images of The Column at an approximately 10 percent running-royalty rate.