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IP/Entertainment Case Law Updates

Davidson v. The United States

Court of Federal Claims holds that plaintiff’s replica sculpture of Lady Liberty is sufficiently original to merit copyright protection and U.S. Postal Service’s unauthorized use constituted copyright infringement, entitling him to more than $3.5 million in damages, plus interest.

Plaintiff Robert Davidson, the sculptor of the Lady Liberty replica statue in front of the New York-New York Hotel & Casino in Las Vegas, Nevada, brought suit alleging that the U.S. Postal Service’s unauthorized use of a photograph of the statue on a stamp commemorating the Statue of Liberty that depicted the face of the replica statue constituted copyright infringement.

The court first analyzed whether Davidson’s copyright in the statue was valid (the Copyright Office had granted the registration, but it didn’t have a presumption of validity since five years had not passed), and if so, whether the Postal Service infringed on that copyright. While Davidson was tasked with creating a replica of the Statue of Liberty in New York Harbor, his work was original because a “work of art need not be wholly original to be copyrightable; it need only be a new and original expression of some previous work or idea.” When creating the statue, Davidson gave Lady Liberty’s face a fresher and more feminine look. He used his mother-in-law as inspiration, viewing her picture every night during the construction of the face of the statue. The court concluded that “Mr. Davidson’s statue, although invoking an existing world-famous statue, is an original, creative work, and as such is the subject of a valid copyright registration.” Given that the stamp depicted the face of the statue — copying all of the original elements of the plaintiff’s work without any alteration — the court concluded that the use was infringing.

The court rejected the Postal Service’s defense of fair use, based on the four fair use factors: (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.

Noting that the purpose and use factor is often the dispositive factor, the court concluded that this first factor favored Davidson because the use was for a purely commercial nature, namely to make a profit from selling stamps with a new iconic picture that collectors would demand and retain (rather than use for postal services). The second factor favored neither party, reasoning that “[a]lthough we did find that the original elements of plaintiff’s statue were creative and expressive, its intended use as a replica mitigates in favor of defendant.” The third factor favored Davidson because the expressive and original portion of the statue was the face, which was almost entirely captured and presented on the stamp. And the fourth factor favored the Postal Service because Davidson could cite no harm to his business as an industrial sculptor and had expressed no interest in exploiting his work.

On balance, the court concluded that the Postal Service’s use did not constitute fair use: “The 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.” The Postal Service collected over $2 billion for the Lady Liberty stamp alone, of which $70 million was profits. “Some portion of that is owed to plaintiff as damages.”

Next, the court considered the extent of damages due and attempted to craft a remedy that reflected what the fair market value of a nonexclusive license for what plaintiff’s work would have been in 2010. Both Davidson and the Postal Service presented experts in the field of intellectual property appraisals. The court concluded that the value reached must assume a willing buyer and willing seller and found that a 5 percent running royalty on unredeemed stamps and philatelic products was the correct figure, resulting in $3,548,470.95 plus interest to Davidson.

Summary prepared by Jonathan Zavin and Lisa Rubin.

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