Postal Service Snafu Leads to Multi-Million Pay Day for Artist

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By on July 16, 2018 in Court Cases with 0 Comments

Close up of the face of the Statue of Liberty in New York

In Davidson v The United States (U.S. Court of Federal Claims, No. 13-942C, 6/29/18), the court sided with an artist whose work was used by the USPS on a popular “lady liberty” stamp and awarded him more than $3.5 million in damages.

Robert Davidson sculpted the replica Statue of Liberty that graces the front of the iconic Las Vegas New York-New York Hotel Casino. Davidson completed his work in 1996. His “lady liberty” was “a little more contemporary face, definitely more feminine, just something that I thought was more appropriate for Las Vegas” as compared to the real statue of liberty. (Opinion p.8)

The Postal Service came across a picture of Davidson’s statue and decided it would be the perfect image for its new workhorse forever stamp. In December 2010, the new lady liberty stamp was issued using the face of Davidson’s lady liberty. USPS had purchased the rights to use the picture from Getty Images for $1500; however, it did not work anything out with the original artist, Mr. Davidson. It did not take long for a third party to recognize the work USPS had used belonged to Mr. Davidson who informed the Postmaster General of that fact. In later testimony, USPS officials indicated that they would have selected the image of Davidson’s lady liberty because it was so “different from anything we’ve done before. That was its appeal…There are only so many ways to reinterpret an iconic image.” (p. 12)

By the time USPS realized the situation, some three billion stamps had been printed and it would be far too expensive to scrap it. Moreover, the stamp was hugely popular which meant USPS would realize fairly big money from sales to collectors. Soon they had printed more than 10 billion of the stamps. By the time they retired the stamp in 2014, USPS estimates it had profited by about $71 million from the stamp sales. 

Mr. Davidson eventually sued USPS for infringing his copyright. 

Following a lengthy trial, the court has ruled in Mr. Davidson’s favor, rejecting the USPS’s various arguments as to why its use of the photo—for which it had paid Getty Images—did not add up to infringement. The court found that Mr. Davidson’s work, while a depiction of an icon, was nevertheless original given its softer, more feminine appearance. (Davidson testified that he used his mother-in-law as inspiration for the statue’s face, trying to tone down the “harsher and more masculine” look of the original statue.) (p. 18) As the court stated, “A comparison of the two faces unmistakably shows that they are different.” (p. 19)

The court went on to rule that the Postal Service’s use of Davidson’s image was infringing. As the court noted, “Despite the fact that it regularly operates at a loss, the Postal Service is in business and seeks to operate at a profit, or at least seeks to fully fund its operations through its own revenues received from sales. It offers the service of delivering mail, which is, in a broad sense, in competition with private vendors offering similar services. The testimony of the Postal Service’s own employees made clear that the attractiveness of the image played a key role in selecting it in hopes of attracting both overall higher sales and higher retention rates. The first factor strongly favors a finding of infringement. “(p. 22)

Next up was the question of appropriate damages to be awarded to Davidson: “Defendant collected over $4 billion in revenue (both stamps, Lady Liberty and flag) from the use of Mr. Davidson’s statue, and, even though a very low portion of the revenue represents profit, that number is over $70 million for the Lady Liberty stamp alone. Some portion of that is owed to plaintiff as damages. Further, the portion used was entirely of what we consider to have been the original work contributed by Mr. Davidson. The government’s only real defense is that its use did not particularly harm plaintiff’s business as an industrial sculptor. That may be true, but we also note that it certainly did not benefit him. The Postal Service offered neither public attribution nor apology.” (p. 24)

Interestingly, in computing appropriate damages, the court paid particular attention to how much USPS charges third parties for their use of USPS images, such as the ever-popular Love stamps. When a third party company wants to use a USPS image for large quantities of goods, USPS typically negotiates a “running royalty,” often in the range of 8 percent of total third party sales. The court used USPS estimates and calculations for determining appropriate royalty rate. 

Bottom line: the court ordered USPS to pay Mr. Davidson $3,554,946.95 in total damages for its infringement. (p. 37)

Ouch!

Davidson v. USPS (13-942C)

© 2019 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

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About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.

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