Copyright for Artists in Business: the USPS gets Schooled, Again - Creative Law Center

Copyright for Artists in Business: the USPS gets Schooled, Again

Which comes first, the art or the business? Many artists work to turn their creative abilities into a business. But sometimes it's the business that turns out to be creative. In either case, copyright protects the business by protecting the revenue generating creative assets, also known as the art. 

Robert Davidson may not have set out to be a small business poster child for copyright protection, but he is now. The United States Postal Services has been ordered to pay Davidson over $3.5 million for infringing the replica sculpture of the Statue of Liberty that he made for the front of a hotel in Las Vegas. 

It's a case of how a small business owner successfully recognizes the creative nature of his work and uses copyright to claim and enforce the rights. 

When the judge's opinion was reported across nearly every news channel, I could hear the whining in cyberspace, "Why should he get that kind of money for copying the Statue of Liberty?" 

Well, it's a solidly reasoned opinion and a good story. Let's break it down and learn how a small creative business can achieve an outstanding result by enforcing the rights in its work.

Lady Liberty stamp and statue

Left: Davidson's Lady Liberty on the stamp. Right: Statue of Liberty

How Davidson's Business Became Art

Davidson started his career in the plastering business as a water boy, hosing down stucco exteriors that had been plastered the day before. He worked his way up through a building construction company for 16 years, then opened his own business in 1988.

At first, he worked mostly on residential projects building his skills and his reputation. In one home, he finished 13 fireplaces, one with a lion's head design. Almost without him knowing it, his career as an artist, sculptor, and creative designer of plaster work began.

Before he won the contract to build Lady Liberty outside of the New York-New York Hotel in Las Vegas, Davidson developed his large form plaster technique on the Sphinx that sits in front of the Luxor Hotel. When it came time for him to build the Lady, he was given some photographs of the original statue, a 12-inch statuette, and an outline of where the finished work was going to fit. He spent a lot of time researching and designing before he could even begin the project.

He built the form of Lady Liberty using the skills and processes he developed on the Sphinx project. He used large blocks of foam that were cut to rough dimension. He then sculpted the stacked foam into the shape he envisioned. He finished the work with plaster mud and an acrylic coating which allowed him to further refine the features of the piece. The finest details were created with hand tools.

Davidson's Sphinx. Photo credit: Lindsay Scott

During the trial, Davidson testified about how the face of his Lady Liberty came to life. He wanted a more modern, contemporary face, something softer, more feminine than the original, something that was better suited to Las Vegas. He gave the eyes life and added subtle touches to the lips. Davidson's design had more defined eyes and eyelids and a more pronounced cupid's bow-shaped upper lip than did the 1886 Statue of Liberty. This description of his work is the crux of Davidson's originality and creativity.

Copyright Practice Tip

Artists must be able to articulate the nature of their creativity. To put your art into words, answer the question, "Why does my piece look this way?" or "What was I thinking when I created this?" The story of the art is what will carry the day when you need to describe and defend originality.

Copyright Registration: An Effective Timeline

Davidson created his Lady Liberty in 1996, but did not apply for a copyright registration on the work until 2013 after he learned that the Post Office had put it on a stamp. I expect he learned then that a copyright registration is needed to enforce your rights.

There are benefits to registering your copyrights in a timely manner. The best practice is to apply for registration on your work within three months of publication. That's the grace period. If you apply in that three month time frame and someone infringes your work before you apply, you can get the benefit of enhanced remedies – statutory damages (up to $150,000) and attorneys fees.

Also, if you apply for registration at any time before your work is infringed, you can get the benefit of those remedies.

If you apply for registration after the three month grace period and after someone infringes your work, you do not get the benefit of those remedies. Instead of statutory damages, you have to prove actual damages. Unless someone has used your creative work in a big way (like the USPS did with Davidson's work), proving actual damages like lost licensing revenue or the profit made by the infringer can be difficult and not worth the cost of federal litigation.

Then there's the five year rule. If you apply for copyright registration within five years of publication, your copyright is considered valid and you don't have to prove any of the facts listed in the certificate, like the fact that the work is original.

Davidson missed all those deadlines. He filed his application for registration on his work more than 15 years after he created it. I guess he never thought of himself as an artist creating original work. His background was in construction. He may have been in the construction business, but he was creating art a great deal of the time. He evolved into an artist and may not have been aware of that bundle of rights called copyright that most artists learn about early on in their career.

Originality and Copyright

Because Davidson did not apply for his copyright registration in the five year period after he sold his work, he found himself in the position of having to defend the validity of his copyright. The USPS used the late application as an opportunity to challenge the originality of his work. 

Originality is an absolute necessity for a valid copyright. In the law this is referred to as sine qua non, the essential condition.  Davidson met his burden of proof. The judge determined that the work was not just a copy of the original, that Davidson had made the statue his own creation. He found originality in the softer, more feminine appeal of Davidson's statue; the eyes are different, the jaw line is less massive, and the whole face is more rounded.

It turns out that  these differences were exactly what caused the USPS to chose the image for their stamp in the first place. The Statue of Liberty had been on stamps at least 20 times before and the USPS wanted a fresh perspective on the old lady. It's ironic to me that the Post Office would challenge the originality of Davidson's work when it was the newness of it that drove their decision making in the first place. But once lawyers get involved . . . .

Copyright for Art in the Photo

The USPS found the image for the stamp on Getty Images and paid $1,500 for a non-exclusive license to use it for three years. At the time, they did not realize it was a photograph of Davidson's Lady Liberty and not the original Statue of Liberty. Unfortunately, while they secured the rights to use the image, they didn't secure the rights to use the art that's in the image. 

The need to license sculpture depicted in a photograph is an expensive lesson the USPS learned when they created the Korean War Veterans Memorial Stamp.

In that case, the USPS was ordered to pay $540,000 to the sculptor. The USPS licensed the photo, but not the art in the photo.

History repeats itself all over again.

Original photo credit: Marine Corps Reserve Lt. Col. John W. Alli

Counting the Money

The USPS has never paid more than $5,000 to license artwork for a stamp. That's the amount they wanted to pay Davidson after using his work without permission. On the other hand, Davidson had an expert testify that he was entitled to $53 million. The court had its own approach to the calculation based on what it believed would have been fair market value for a non-exclusive license at the time.

When the Post Office created the Forever stamp using the image of Davidson's statue, it thought it was using a picture of the original Statue of Liberty. USPS was told about its mistake after more than 10 billion of the stamps had already been printed with 4.4 billion issued for sale or already sold.

Eventually 4.9 billion stamps were sold. A large percentage of those will never be used to send mail. When a stamp never used, the price the Post Office gets for it is pure profit. The USPS made nearly $75 million in pure profit off of the Lady Liberty stamp. The court applied a 5% royalty rate to arrive at the judgment amount of over $3.5 million. Davidson was also awarded the $5,000 flat fee the USPS would have paid.

Copyright Protects Your Creative Work

Key takeaways from this case:

  • Recognize when you've created something original. It may be art even if you do not think of yourself as an artist.
  • Protect your work by making the application for copyright registration part of your workflow.
  • Read the contract when you license the work of others, you may not be getting everything you think you are. Remember to get permission for the art in the art.
  • Engage in a solid fair use analysis when using the creative work of others. When there's a lot at stake, be sure the analysis is impartial. Hire a copyright attorney or licensing professional to write a clearance opinion for you. 

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About the Author

Kathryn Goldman helps small business people, writers, artists, and creative professionals make a living from their creative work by teaching them how to protect and enforce their rights. She is an attorney who writes these posts to help you be more thoughtful about intellectual property and the law as you build your business, write your stories, and create your art.

  • Kelly says:

    Excellent article!

    I’m happy the court understood that small expressive changes to a Public Domain work can still qualify as a new copyright–protected work. I could see other judges not familiar with copyright’s intricacies rule much differently.

    This infringement action was preventable. The USPS and particularly the person/s who selected/approved Davidson’s/Getty’s image were negligent. If the USPS was a corporation, people would be fired.

    I’m troubled that the USPS’s maximum fee for creative work licensed on stamps is limited $5K.

    Adding to what Kathryn wrote, this is an example of one of the very rare occasions when the disgorgement of profits (for a work not timely registered) out-strips the maximum statutory money damages of 150K (for willful infringement of a timely registered work). Robert Davidson got lucky and learned an important lesson about timely registering his work.

    Kathryn writes, “The best practice is to apply for registration on your work within three months of publication.”

    My preference is to register my creative works as unpublished, allowing me to bulk many works of the same medium in one Standard eCO Application; I include robust individual content titles for each registered work in the application. By registering before officially publishing my work, I tend to receive my Certificate of Registrations more quickly vs. registering within the three-calendar months.

    Kathryn writes. “He evolved into an artist and may not have been aware of that bundle of rights called copyright that most artists learn about early on in their career.”

    From my experience, most artists (and art instructors!) still don’t fully understand copyright basics, fair use, licensing, and the automatic bundle of exclusive rights that copyright grants authors. Art, photo, film, and journalism schools instructors are negligent by not providing their students with substantive legal and business training. Imagine if students were required to have an MBA and JD before being accepted into art schools.

    • Thanks for the comment, Kelly.

      Registering your work in a group before publication is an economical practice for many types of creative works. But if you’re a “make one, sell one” kind of artist, that may not be an option.

      I agree that much of what I write about should be part of an undergrad curriculum, but not all creatives went to college or when they did, they studied something else. Professional artists, photographers, film makers, and writers tend to get their MBAs and JDs OTJ.

      Could you imagine if law students or MBA candidates had to show a creative portfolio to get into grad school? That could be ugly.

  • Terre says:

    Thanks, Kathryn, for this article, which I think shows that using stock media might not always be the right solution for your particular project and that; with respect to copyright law, the “devil really is in the details” of your specific case!

  • Alan Hodge says:

    This is both interesting and frustrating. I was recently going to use a picture of NYC for a book cover. I chose another image, but the NYC pic had a large neon sign of a company in it. If I’d have used it, could I have been sued for copyright infringement? Trademark issues? How far do you have to go with a graphic bought from one of the big image sites to ensure you won’t get sued?

    • I doubt there would be copyright issues using a cityscape of NYC as a book cover assuming you have a license from the photographer. Although architecture is protected by copyright, photographs of architecture are not considered an infringement.

      As for the trademark issue, it is not likely to be a trademark infringement because unless you are suggesting an endorsement, the depiction of a company’s mark in a cityscape on the cover of your book is not a trademark use. The key is whether your use would result in consumer confusion — that the buyer of the book thinks the book originates with the company whose mark is in the image.

      The Lady Liberty case is about using photos of sculpture when you don’t have the rights from the artist. It’s actually a pretty narrow issue. I hope you are less frustrated, now.

  • This is very interesting. Who would have thought? Thank you for posting this.

  • Angela says:

    Interesting, so would that mean that every photo of an existing statue or artwork is not actually free to use even if it’s sold as royalty free on a stock site?
    For example, if someone took a detailed photo of the fairy wings I make, they don’t have the right to offer that as royalty free stock because it would be Infringement on my wing art, yes?

    • They can offer the image as royalty free stock. But, the person who licenses the image may not have all the rights they think they do. Specifically, they would not have your permission to use your wings depicted in the image. It’s like a model release. Royalty free stock images usually come with model releases from the people in the photo. There has to be a release or license for the artwork in the photo.

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