Gaylord v. United States, 678 F.3d 1339 (Federal Circuit May
14, 2012). Sculptor won judgment against
U.S. Postal Service for copyright infringement for issuing postage stamp depicting
soldier sculptures installed in Korean War Veterans Memorial. The Court of Federal Claims awarded sculptor
$5,000 in damages and denied prejudgment interest. Sculptor appealed to Federal
Circuit. The Federal Circuit vacated and
remanded holding that damages award based only on what Post Office had paid in
the past as a license fee was not proper measure of fair market value and that
prejudgment interest was available as a matter of law. The lower court had used a “zone of
reasonableness” test for determining the appropriate license fee and accepted
the Post Office’s testimony that it had paid from $1,500 to $5,000 in the past
as lump sums. The Federal Circuit found
this testimony to be self-serving. The
Federal Circuit looked to reasonable royalties and hypothetical licenses as a
more appropriate measure, noting that the Post Office itself re-licensed the
infringed images at a royalty of 8% and noted the sculptor’s past history of
licensing images at that rate. The
Federal Circuit noted that the lower court erred in only analyzing one side of
the negotiating table in determining fair license fees.
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