US Stamps

Court rules USPS must pay 37¢ Korean War artist $540,000

Feb 5, 2015, 10 AM

A federal appeals court has upheld a lower court ruling that that the United States Postal Service must pay a New England sculptor $540,000 for the use of his sculptures on a 2003 37¢ commemorative stamp marking the 50th anniversary of the end of the Korean War.

The Feb. 4 ruling by the U.S. Court of Appeals for the Federal Circuit still could be appealed to the Supreme Court.

But the ruling was a major victory for retired sculptor and World War II veteran Frank Gaylord.

For eight years Gaylord, 89, has battled the Postal Service over its use of a snow-covered scene showing his sculptures of a column of Korean War soldiers at the Korean War Veterans Memorial on the National Mall in Washington.

Unlike most federal art, Gaylord did not give the federal government total control over the images he created — a fact that postal officials did not realize when they selected a photograph by John W. Alli of Catonsville, Md., for the 37¢ commemorative.

The Postal Service paid Alli $1,500 for use of his photo, but never bothered to ask Gaylord for his approval.

That oversight now seems likely to make the Korean War stamp one of the most costly stamps the USPS has issued in recent years, all because of the price tag on the artwork.

In its ruling, first reported by the National Law Journal, a three-judge panel of the appeals court held that the U.S. Court of Federal Claims had established an “adequate basis” for awarding Gaylord a sum based on the value of the commemoratives that were saved by collectors.

It called the estimated value of those unused stamps — $5.9 million — “almost pure profit” to the Postal Service and agreed with the lower court that a payment of 10 percent of the amount to Gaylord was a proper royalty payment for the use of his images.

“There is only one nationally recognized Korean War Memorial and the evidence readily available allows the finding that, by 2003, that memorial — and particularly The Column within it — was a distinctively valuable subject for a commemoration of the veterans who sacrificed through service in that war,” said Judge Richard Taranto.

“Under these circumstances, the trial court did not err in concluding that, faced with limited alternatives, the Postal Service would have agreed to a per-unit license.”

The ruling was a disappointment to the Postal Service’s Stamp Services program which, at the time, was typically paying $1,500 for use of photographs for stamps.

Since its inception, the stamp program has depended on artists and photographers who were willing to accept relatively modest payments for stamp images. The honor of having an image placed on a U.S. stamp was part of the deal, stamp officials said.

But Gaylord was different. He retained the rights to his images and in 2006 filed a lawsuit against the Postal Service in the U.S. Court of Federal Claims in Washington.

He initially won rulings that upheld his rights to the artwork and then rulings in 2010 that affirmed the USPS should pay him damages.

“We are very happy with the decision and feel that justice has been done,” said Heidi Harvey, a Boston lawyer who handled his claim.

The case was an important one for the Stamp Services program because it had installed a number of added pre-press checks on stamp artwork after the discovery of the wrong image of rodeo star Bill Pickett on the Legends of the West pane in 1994.

But in this case, Postal Service officials assumed that the Korean War sculpture was, as is most art commissioned by the federal government, considered to be in the public domain and thus available for reproduction without any royalty payment.

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