Gaylord v. United States
678 F.3d 1339
| Fed. Cir. | 2012Background
- Gaylord created The Column, a group of nineteen stainless steel sculptures for the Korean War Veterans' Memorial.
- USPS issued a 37-cent stamp in 2002 depicting The Column’s image, licensed from photographer Alli, without Gaylord’s permission.
- USPS sold ~86.8 million stamps and licensed the image on retail goods; no license from Gaylord for stamp or merchandise.
- Gaylord sued USPS under 28 U.S.C. § 1498(b) for copyright infringement in 2006; the court of Federal Claims held USPS liable.
- The Federal Circuit held Gaylord owned the copyright and USPS infringed; remanded for damages, focusing on a zone of reasonableness based on past license payments.
- The trial court awarded a one-time $5,000 royalty, rejected a 10% royalty, and denied prejudgment interest; on appeal, the damages framework and prejudgment interest were reviewed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Damages measure under §1498(b) | Gaylord argues for royalty-based damages; seeks fair market value. | USPS argues against royalties; relies on past payments and policy limits. | Remanded to determine fair market value via hypothetical negotiation. |
| Prejudgment interest entitlement | Waite v. United States entitles prejudgment interest. | Sovereign immunity bars prejudgment interest. | Remanded; prejudgment interest may be recoverable. |
| Correct damage framework on remand | Zone of reasonableness should reflect full license value, including ongoing royalties. | Past payments and policy evidence suffice for damages. | Court to use full hypothetical negotiation evidence and consider ongoing royalties. |
| Scope of evidence on remand | Evidence of typical 8–10% royalties supports higher value. | Past license payments set a cap. | Evidence to be reevaluated for fair market value across categories. |
Key Cases Cited
- On Davis v. The Gap, Inc., 246 F.3d 152 (2d Cir.2001) (hypothetical negotiation and fair market value in damages)
- Thoroughbred Software Int'l, Inc. v. Dice Corp., 488 F.3d 352 (6th Cir.2007) (actual damages via fair market value license)
- Jarvis v. K2 Inc., 486 F.3d 526 (9th Cir.2007) (willing buyer/willing seller concept for license value)
- McRoberts Software, Inc. v. Media 100, Inc., 329 F.3d 557 (7th Cir.2003) (limit of damages methods for lost opportunities)
- Leesona Corp. v. United States, 599 F.2d 958 (Ct.Cl.1979) (reasonable and entire compensation concept in §1498(a) context)
- Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed.Cir.1995) (what infringer would prefer to pay is not the test for damages)