Digest of Gaylord v. United States, No. 2014-5020 (Fed. Cir. Feb. 4, 2105) (precedential). On appeal from C.F.C. Before Moore, Reyna and Taranto.

Procedural Posture: United States appealed award of damages for copyright infringement by Postal Service’s commemorative stamp depicting Gaylord’s Korean War Veteran’s Memorial sculpture The Column. CAFC affirmed.

  • Damages: The Court of Federal Claims (CFC) did not err in determining that a per-unit royalty, not a one-time lump-sum payment, would have been the outcome of a hypothetical negotiation between parties prior to infringement. There is no overriding evidence of any difficulty in monitoring number of sales or amount of revenue that would persuade negotiators that a per-unit royalty was inefficient. The CFC also did not err in discounting the significance of the Postal Service having historically found alternatives rather than agree to a per-unit royalty, given the uniqueness of the work at issue.
  • Damages: The CFC did not err in determining that a per-unit royalty of 10% of profits would also have been the outcome of the hypothetical negotiation. From Gaylord’s perspective, this royalty is in line with per-unit royalties in other licenses for derivative works incorporating The Column, where he has obtained a royalty of 10% of revenue, which if anything is higher than a royalty of 10% of profits.