Heard the one about the sculptor awarded over half a million dollars because a stamp was made including a war memorial he'd designed? At first that may sound surprising, but reading the court's judgement (and the rejections of the various defenses put forward by the US Postal Service), is an informative lesson about copyright and fair use.

The case itself has been rumbling through the court system since 2006, when Frank Gaylord, sculptor of the National Korean War Veterans Memorial in Washington D.C. accused the US Postal Service of copyright infringement. The US Postal Service had created a postage stamp based on a photograph of the monument by photographer John Alli.

Initially the Postal Service defended itself on the basis of co-ownership of copyright (having contributed to the design), exemption under the Architectural Works Copyright Protection Act, and fair use. A 2008 court case dismissed the first two defenses but accepted a claim of fair use.

However, this 'fair use' defense (which aims to ensure copyright isn't used to unduly hold back science and the arts), was rejected by an appeal court in 2010. Both the original acceptance of the fair use defense and its rejection hinge on a case-by-case analysis of the factors set out in US copyright law:

  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; and
  4. The effect of the use upon the potential market for or value of the copyrighted work.

The 2010 ruling looks at each of these in turn, with much of the rejection of the fair use defense hinging on the first two elements.

The argument that Alli's photography is a transformative work (it changes the purpose or character of the original), isn't helped by the Postal Service entitling the stamp 'Korean War Veterans Memorial' - suggesting it's a depiction of Gaylord's work, rather than a original work based on it.

And, while an earlier court had ordered the US Postal Service to pay Gaylord just $5,000 (based on that being the largest amount it had ever spent on licensing a photograph), the latest finding is that the Postal Service instead owes $684,845. Rather than being a punitive amount, it's based on Gaylord's normal rates - 10% of the fee the creator of a derivative work is making (a rate Alli agreed to for any subsequent use of his photograph).

Furthermore, that 10% rate has only been levied on the the proportion of stamps that the Postal Service believes have been bought by collectors (and thus are considered pure profit). The remainder of the award is a 10% royalty on related merchandise the Postal Service sold and an interest payment to make up for the delay in payment while the court cases have rumbled on.

What do you think?

The 2010 ruling, which is well worth reading, makes clear why the court believes Gaylord's copyright has been infringed.

At which point does the amount awarded (based on the Postal Service's roughly $17.3m income from stamps and merchandise based on his work) seem unreasonable, or is it an equitable response to someone's work being used for profit?