How Failing to Plan Cost the Postal Service More Than $3.5 Million

Postage stamps are quickly becoming little more than a curious relic of the past for many people in today’s digital world. In fact, there are probably thousands—or maybe even millions—of American adults who have not bought a stamp in several months, if not much longer. Despite this trend, the United States Postal Service (USPS) reported that it handled approximately 129.2 billion pieces of mail in fiscal year 2020, many of which bore traditional first-class postage stamps.

As large as the USPS is, it is not immune to the problems that can arise when a company fails to plan properly. One such example from a few years ago ended up costing the Postal Service more than $3.5 million in damages paid to a sculptor who created a replica of one of our nation’s most enduring images.

The Backstory

In 2010, the U.S. Postal Service released a series of “forever” stamps that bore the image of the face of the Statue of Liberty. Some 3 billion stamps were printed, and they remained in circulation for at least three months before the USPS realized that there might be a problem.

The stamp’s designers had used a stock photo of what they thought was the original Statue of Liberty—the one that stands proudly in New York Harbor. It turns out that the stock photo was of a replica created by sculptor Robert Davidson for the New York-New York Hotel and Casino in Las Vegas. The replica was fabricated in 1996, but the sculptor did not obtain copyright protection until 2013.

A spokesperson for the USPS confirmed the mix-up to CNN in 2011, but the stamps continued to be sold until they were retired in 2014. The Statute of Liberty Forever stamps generated $70 million in profit for the Postal Service, but that is not the end of the story.

A Costly Lawsuit

While the Postal Service acknowledged the mistake, it did not see any real damage being done. The sculptor disagreed. He sued USPS and the federal government for copyright infringement, claiming that he was entitled to damages related to the use of his creation, despite not have a copyright at the time the stamp was created. The USPS claimed that the two versions of Lady Liberty were too alike for people to notice the differences. Davidson and his attorneys argued that his version did not “merely copy the Statue of Liberty.” Instead, “he was hired to clearly invoke the iconic New York image” with a “ ‘fresh’ look.”

A federal claims court judge ruled on the case in June of 2018. He determined that Davidson had, in fact, created an original work and that the faces of the two statues are “unmistakably” different. As a result, he ordered the Postal Service to pay Davidson more than $3.5 million in actual damages plus interest.

We Can Help You Plan Ahead

The importance of proper planning for your business cannot be overstated. While we have the benefit of hindsight regarding the Postal Service’s stamp issue, it certainly seems that the problem could have been avoided if the project’s managers had done more planning—particularly in the areas of licensing and intellectual property rights.

The knowledgeable Naperville business law attorneys at the Gierach Law Firm have vast experience in helping business owners with planning for the future, including both short-term projects and long-term growth goals. Call 630-756-1160 to discuss your company’s future with a member of our team today.

Sources:

Statista

USA Today

Davison v. The United States