Question: GAYLORD V. UNITED STATES FEDERAL CIRCUIT COURT OF APPEALS

FACTS: Congress enacted legislation to create a memorial for the Korean War. Cooper-Lecky Architects, P.C., was the contractor selected for the creation and construction of the memorial. Cooper-Lecky held a competition to select the sculptor for the memorial, and in 1990, Frank Gaylord, a nationally known sculptor, won the competition and began working on the Korean War Memorial. Specifi cally, he created a design in which 19 statues represented a platoon of soldiers in formation for war. Gaylord registered copyrights for these soldier sculptures. In 1995, John Alli took photographs of the memorial as a gift for his father, who was a Korean War veteran. When Alli later decided to sell prints of the photo, he approached Cooper-Lecky for permission, and the parties agreed Alli would pay CooperLecky a 10 percent royalty on his sales of the photo. In 2002, the U.S. Postal Service decided to use Alli's photo as a stamp commemorating the end of the Korean War. Alli told the Postal Service that it would need to get permission from Lecky, who he understood held the copyright on the statues. The Postal Service did not get permission from Lecky or from Gaylord. The Postal Service sold approximately $17 million worth of the stamps, and an estimated $5 million of that $17 million was from collectors who would not use the stamps. Gaylord sued the government in 2006 for copyright infringement in the Court of Federal Claims, where the court determined that the stamp made fair use of the sculptures. Gaylord appealed.

ISSUE: Was the Postal Service's use of Gaylord's sculpture on a postage stamp fair use?

REASONING: The Federal Circuit considered the four factors under Section 107 of the Copyright Act. First, the court considered the purpose and character of the infringing use. Specifi cally, the court evaluates whether the new work adds something new, such as a new expression, meaning, or message, and is transformative. The Federal Circuit determined that the stamp did not communicate any further purpose than the memorial. It was not intended to provide commentary or criticism. Furthermore, the stamp had a commercial purpose. Consequently, the court determined this factor weighed against fair use. Second, the Federal Circuit considered the nature of the copyrighted work, the memorial. Under this factor, courts consider

(1) whether the work is more creative or more factual, and

(2) whether the work is published or unpublished.

Works that are more factual and works that are unpublished are more likely to be found as fair use. The memorial was both a creative and published work, so this factor weighed against fair use. Third, the Federal Circuit considered the amount and substantiality of the portion used. The stamp included 14 of the 19 soldier sculptures. Furthermore, the stamp had the same focus as the memorial, so this factor weighed against fair use. Finally, the Federal Circuit considered the effect of the use on the potential market. Here, the court considered the market for the copyrighted work as well as the market for the potentially infringing works. The Court of Federal Claims determined that the stamp did not harm either market and noted that Gaylord agreed that the stamp increased the memorial's value. The Federal Circuit did not disagree with the Court of Federal Claims' fi ndings. DECISION: The Federal Circuit determined that the factors led to the conclusion that the stamp's use was not a fair use.

SIGNIFICANCE OF THE CASE: The case clearly sets forth how the elements of the fair-use doctrine are applied.

Critical Thinking: Create a series of facts that, had they been true, would have caused the court to have decided that the stamp's use was a fair use.

Ethical Decision Making: What value confl ict is responsible for the arguments surrounding the issue of fair use of intellectual property?