Sometimes a 37¢ stamp does buy quite a bit. One lucky sculptor, Frank Gaylord, may find that such a stamp could give him some extra spending money in the neighborhood of six or seven figures.
The Court of Appeals for the Federal Circuit recently reversed the lower court and ruled that the U.S. Postal Service violated Mr. Gaylord’s copyright when it issued a stamp based upon a photograph of a sculpture called “The Column”. The Column is composed of 19 statutes representing a platoon of soldiers such as the one on the left and is part of the Korean War Memorial.
Years after the memorial was opened, the Postal Service decided to use a photograph of the Column that John Allishot early in the morning after a snowstorm. It paid Mr. Alli $1,500 to use the photograph.
To show how difficult it can sometimes be to determine who owns a copyright, Mr. Alli believed he had authority to commercially exploit his photograph because he entered into a license agreement with an entity that said that it held the copyright in The Column. Only later did Mr. Alli learn that Mr. Gaylord actually held the copyright.
While it may have been difficult for Mr. Alli to determine who owned the copyright in The Column, the government was certainly aware of Mr. Gaylord as it worked with him on certain aspects of The Column (the degree of which was disputed). Surprisingly, it never required Mr. Gaylord to either share his copyrights or provide it with a license to use The Column.
Mr. Gaylord sued the Postal Service claiming that he was owed a 10% royalty on the sales of $17 million worth of postage stamps plus other merchandise that featured images of the stamp.
The parties agreed that Mr. Alli was entitled to his own copyright protection in his photograph as a derivative work. Although the parties stipulated that the photograph was a derivative work, as I noted elsewhere, this is still an open question.
There were multiple issues before the Federal Circuit, but the main one was whether or not the stamp’s depiction of The Column was fair use under 17 U.S.C. § 107. It was not only the crux of the parties’ argument, but also one of the first times that the Federal Circuit weighed in on fair use.
Typically, fair use is ”for purposes such as criticism, comment, news reporting, teaching . . . scholarship, or research”, but it also applies more generally to uses that fall within the four statutory factors. The Federal Circuit agreed that the stamp did not effect the potential market or value of The Column, but it found that the other three factors weighed against the government.
The parties’ argument about the first factor, i.e. the purpose and character of the infringing use, centered on whether or not the stamp was “transformative” of the original sculpture. Mr. Gaylord argued that the stamp could not be transformative because the stamp and The Column both have the same purpose of honoring the veterans of the Korean War. The court agreed and rejected the government’s argument that the addition of snow and muted colors enhanced the sculpture’s surreal character because they do not change the ”character, meaning or message” expressed in the sculpture. As the court said: “Nature’s decision to snow cannot deprive Mr. Gaylord of an otherwise valid right to exclude.”
The Court of Appeals also seemed troubled that the stamp did not comment upon the original work nor was it part of a biography. It will be interesting to see whether this case will be interpreted as narrowing the test for what constitutes a transformative use.
Because the stamp was not a transformative use and was for a commercial purpose, the court held the first factor weighed against fair use. The second (the nature of the copyrighted work) and third (the amount and substantiality of the portion used) factors also weighed against fair use according to the Federal Circuit. At least one commentator believes that the Federal Circuit’s decision was right.
Regardless of whether it is right or not, this case illustrates the importance of licensing. The government decided it did not need a formal agreement that allowed it to use the sculpture. I applaud public entities for making sure that they treat artists fairly, but they also need to make sure that they think through the repercussions of not obtaining some protection in the form of joint ownership in the copyrights or a perpetual license to use the copyrighted works upon terms that are fair for everyone.