This is a crazy story about the Statute of Liberty, a Las Vegas hotel, and the U.S. Postal Service. Oh, and it's also about copyright infringement. 

It starts with a lesson about why you should always check small things. It ends with the government-funded post office on the hook for just over $3.5 million--all the result of a simple mistake that took, at most, only a few hours to make.

Here's what happened, along with the bizarre mistake that sent things off the rails, and how a federal court had to figure out what to do with the mixup.

(Bonus: a stunning detail buried in the court case that shows why the U.S. Post Office is potentially an absolute gold mine.)

New York, New York

If you've ever bought a book of USA Forever stamps from the post office--especially stamps that had Lady Liberty on them between 2011 and 2014--you're actually part of this story.

In 2010, the post office decided to update its Forever stamps, and move from a drawing of the Liberty Bell to one of the Statue of Liberty. A group of employees, including a manager of stamp development named Terry McCaffrey, looked for something "different and unique."

In a single afternoon, McCaffrey said he decided on a Getty-licensed photograph that would be the basis for the stamp. Only one problem: the photo wasn't actually of the Statue of Liberty.

Instead, it was a photo of an artistically different replica of the Statue of Liberty that is actually part of the New York-New York hotel in Las Vegas. And the post office printed literally billions of stamps with the wrong statue.

More modern, more feminine

The sculptor who actually created the Las Vegas replica in 1996 sued in 2013, but he only got his day in court last year. Then, just over a week ago, the U.S. Court of Federal Claims in Washington issued a decision.

Short version: He's entitled to damages for copyright infringement, in the amusingly specific amount of $3,554,946.95, plus interest. 

Fourteen witnesses testified. The case turned on whether Davidson could actually claim a copyright in a replica of a famous government-owned icon. But Davidson testified that he didn't try to copy the original statute exactly. 

Instead, he decided to create a statue that would be "a little more modern, a little more contemporary face, definitely more feminine." In fact, he wound up modeling it in part on a picture of his late mother-in-law, and in fact dedicated the finished work to her memory.

In the end, the court said he had a copyright in his work--a literal work of art.

10.5 billion stamps

In fairness, it's not clear that the post office employees even knew that there was a Las Vegas replica--at least when they made their decision. But, USPS learned about the mistake after it had printed about 1 billion stamps, in early 2011.

It kept going--having decided that stopping would be cost prohibitive--and produced at least 10.5 billion stamps, selling 4.9 billion of them by January 2014.

Apparently the post office thought it would be on solid legal ground, but while it paid Getty to license the photograph of Davidson's work, Getty didn't in turn have the right to license the real-life image itself.

So, the court came up with damages of $3,554,946.95, which is supposed to represent what Davidson might have been able to negotiate with the post office, if it had negotiated with him to use his image rather than infringing on it. 

Check small things

I feel bad for McCaffrey in this case. I think he's retired now, and he has a pretty common name, but the mistake is probably going to come up high in search results for him, for quite some time. At least, that's what I thought, until I decided to Google him and see.

One of the first results is a from a PBS special about the Postal Service, posted in 2009, in which he describes another mistake--one that didn't seem to result in litigation--in which the postal service tried to honor a rodeo star named Bill Pickett in 1994, but accidentally used a painting of Pickett's brother, Ben on the stamp.

Bottom line: Check small things. And then check them again. And then, if you really want to hedge against risk--check them one more time.